Maryland, Minnesota and Vermont join the growing list of states enacting and expanding pay transparency requirements.
In May, Minnesota Governor Tim Walz signed a bill that requires employers with 30 or more employees in the state to include a starting salary range or fixed pay rate in job postings, along with “a general description of all the benefits and other compensation to be offered” , including health insurance, retirement plans, bonuses and any other financial perks associated with the position.
The new law takes effect on January 1, 2025, and applies to any solicitation for applicants, whether directly by the employer or through a third party.
Vermont jumped on the pay transparency law bandwagon in June with “An Act Relating to Disclosure of Compensation in Job Advertisements,” set to take effect on July 1, 2025. That law requires employers with five or more employees to ensure that any advertisement of a position includes a disclosure of the minimum and maximum annual salary or hourly wage. While employers must disclose the range or wage that it expects in good faith to pay at the time the ad was created, factors such as an applicant’s qualifications and labor market factors allow employers to pay outside the range listed in the ad.
The law also creates special requirements for jobs paid on a commission or tip basis. As to the former, employers must state that the position is compensated on a commission basis. With regard to the latter, employer must disclose that the job is paid on a tipped basis and the hourly wage or wage range to be paid exclusive of tips.
The law applies only to written advertisements and does not cover verbal ads, such as those made in person, on the radio or on television.
For its part, Maryland expanded its Equal Pay for Equal Work Act, which now applies to all employers “engaged in a business, industry, profession, trade, or other enterprise” in the state, regardless of size.
The law, Equal Pay for Equal Work - Wage Range Transparency, mandates the disclosure of the “wage range” for an open position and a general description of any other benefits or offered compensation. This information must be based on a good faith estimate using (a) any applicable pay scale, (b) any previously determined minimum and maximum hourly rate or salary for the position, (c) the minimum and maximum hourly rate or salary of an individual holding a comparable position at the time of posting or (d) the budget amount for the position.
Under the broad definition of job posting, the new law applies to any “solicitation intended to recruit applicants for a specific available position,” covering both direct solicitations by employers as well as acts by third parties.
The law does not include a private right of action, instead having the state’s Division of Labor and Industry to issue orders and impose penalties for violations, beginning with a letter compelling compliance and ranging up to a civil penalty of up to $600 for each employee/applicant.
Once the changes take effect on Oct. 1, 2024, employers will also be required to complete a form with the state to demonstrate compliance.
To read the Minnesota law, click here.
To read the Vermont law, click here.
To read the Maryland law, click here.
Why it matters
Minnesota and Vermont join a growing number of jurisdictions with pay transparency laws, including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York City, Rhode Island and Washington, D.C. Employers should ensure compliance with their relevant state laws.