Maryland and Minnesota will join the growing number of states and localities that require active pay transparency and benefits disclosure in job postings. States like California, Colorado, Hawaii, Illinois, New York, and even the District of Columbia and some localities have some wage disclosure requirements.
Job applicants benefit from having access to more information while employers struggle to keep up with all of the new laws and information they need to know to keep their job postings compliant. We will help you ride this wave of information by providing you with the key details of these newest changes and what you can do to stay compliant.
Maryland’s pay transparency law
Maryland is starting off the spookiest month of the year by unmasking pay in job postings. Maryland passed Senate Bill 525, which takes effect October 1, 2024, and requires employers to provide specific information in their internal and external job postings.
In their job postings, employers must provide a pay range for the position, a general description of benefits, and any other compensation elements. The state has provided a Sample Compensation Disclosure Form, but employers can choose to provide the required information in any format they choose.
Maryland’s law applies to any posting for a position where at least part of the work will be physically performed in the state. If an employer is not located in Maryland, but the posting is seeking employees in Maryland, then the disclosure requirements apply. The law doesn’t apply if a position will only occasionally perform work in the state, such as attending meetings or conferences.
Most mediums of job postings are covered by the law such as newspapers, flyers, social media posts, and emails to multiple applicants. Pay transparency requirements also apply if employers use a third party to create or distribute job postings. Employers must keep a record of their compliance for at least 3 years after the position was filled, or 3 years after the position was posted if it wasn’t filled.
The state created a Wage Range Transparency Frequently Asked Questions page with additional information about the requirements.
Minnesota’s pay transparency law
Minnesota will ring in the new year with more transparency in job postings. Minnesota passed Senate File 3852 which created wage transparency requirements that take effect January 1, 2025.
Employers with 30 or more employees in Minnesota will be required to include the starting salary range, a general description of benefits, and any other compensation in every job posting. If an employer decides to not offer a salary range they can include a fixed pay rate instead.
This requirement extends to any electronic or printed communications used to recruit job applicants for a specific position and includes desired qualifications. Employers must comply if they create and publish job postings themselves or if they use a third party.
How pay transparency trends will impact businesses
Maryland and Minnesota’s new laws will make a total of 12 states plus D.C. and 7 localities that have adopted some type of active pay transparency laws. That includes California, Colorado, Connecticut, D.C., Hawaii, Illinois, Maryland, Nevada, New York, New Jersey, Rhode Island, and Washington with currently effective—and Illinois, Minnesota, and New Jersey with laws that will go into effect in 2025. Localities with laws include Jersey City, New York City, Albany County, Ithaca County, Westchester County, Cincinnati, and Toledo.
Why does this matter? SixFifty data estimates around two-thirds (66%) of employers do business in at least one state bound by pay transparency laws—and the list of states with job posting requirements continues to grow and shows no indication of slowing down.
Even if you don’t currently hire in a state with pay transparency laws, understanding where trends are headed can help you prepare for the future. Most state-level pay transparency laws agree on the basics:
- People applying for jobs have a right to know the expected salary range or rate of pay for the position
- Employers are responsible for their actions and the actions of any third parties they use for hiring
- And of course, there will be penalties for those who don’t comply
When you dig into the substance of each law though, they each have their own nuances. We’re noticing some interesting trends in specific state conditions/exceptions to wage transparency requirements, such as:
1. Company size thresholds
Most states (66%) have at least part of their wage transparency law apply to employers of all sizes, but California and Washington have greater requirements for employers with 15 or more employes.
A significant minority of states and most localities have minimum employee applicability threshold for their laws. Illinois, Cincinnati, and Toledo wage transparency laws apply to employers with 15 or more employees.
We’re seeing 15 employees as the most common threshold, but there are smaller and larger thresholds as well. New York and its localities run a bit smaller with a 4 employee threshold where as Minnesota and Hawaii only apply to bigger employers, 30 and 50 or more employee respectively.
2. When do applicants’ rights to pay transparency begin?
Again was see most states (66%) and most localities have taken a similar approach to apply wage transparency requirements to job postings. California, Connecticut, Rhode Island, and Washington all have a requirement to provide wage information upon request.
Nevada has taken a unique approach and requires employers to provide applicants with wage information only after an interview.
3. Requirements for additional benefits information
A slight majority (58%) of states require employers to provide additional information about expected wages. Colorado, D.C. Hawaii, Illinois, Maryland, Minnesota, and Washington all have requirements to disclose expected benefits like healthcare or retirement plans and other types of compensation like commissions and bonuses.
If employers fail to comply with the various laws that may apply to them, their problems can stack up quickly. While most punishments are dealt out based on the number of noncompliant job postings made, some states like Washington punish employers based on the number of applicants.
Next steps for employers
You can prepare for these changes by reviewing your current job postings for any new information you may need to add. If you don’t update your existing job posting by the effective date of the laws, you could be subject to penalties.
You should update your job posting procedures to ensure that wage disclosures are included in job postings created after the effective dates. Finally, communicate with any third-party services you use to create or distribute your job postings to ensure that they will comply with these changes.
This area of law is constantly changing and growing and can be difficult to keep up with. SixFifty customers can use our Job Posting tool to help create a compliant job posting in any state.
