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Quick Hits
- Illinois, Minnesota, Vermont, Massachusetts, and New Jersey have pay transparency requirements becoming effective in 2025.
- Several of the states impose requirements related to internal employees and promotional opportunities.
- Many of the requirements are currently unclear and await further guidance.
Illinois
Beginning January 1, 2025, employers with fifteen or more employees are required to include a pay scale and benefits in job postings. In addition, within fourteen days after making an external job posting for a position, employers must announce, post, publish, or otherwise make known all opportunities for promotion to all current employees.
These job posting requirements apply to positions physically performed at least in part in Illinois and to positions reporting to a supervisor, office, or worksite in Illinois. Therefore, employers may need to include pay and benefits information for remote jobs.
“Pay scale and benefits” means “the wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position.” Employers can satisfy these requirements through a hyperlink to a publicly viewable webpage that includes the pay scale and the posting of a relevant and up-to-date general description of benefits in an easily accessible, central, public location on the employer’s website—and referring to that hyperlink in the job posting.
Regarding the use of third parties to announce, post, publish, or make known a job posting, an employer is required to provide the third party with the pay scale and benefits information (or hyperlink as described above). If the third party then fails to include the information on a job posting, the employer is not liable.
Illinois has begun rolling out guidance on these requirements. (See Equal Pay Act Pay Transparency FAQ.) In particular, Illinois has taken the position that all employees, whether located in Illinois or in another state, count toward the fifteen-employee threshold for compliance. The Illinois Department of Labor (IDOL) has also published a required “Equal Pay Act Pay Transparency Notice” for “All Illinois Employers with 15 or More Employees.”
Illinois has committed to providing additional guidance that will hopefully address, among other items, the extent to which an employer must describe any additional compensation and benefits in the job posting narrative.
Minnesota
Effective January 1, 2025, employers with thirty or more employees at one or more sites in Minnesota must include pay information and a general description of all benefits and other compensation in job postings. Specifically, an employer must disclose the starting salary range (which may not be open-ended), or, if the employer does not plan to offer a salary range for a position, a fixed pay rate. The range is comprised of the minimum and maximum annual salary or hourly range of compensation, based on the employer’s good-faith estimate, for a job opportunity at the time of the posting.
New Jersey
Beginning June 1, 2025, employers with ten or more employees over twenty calendar weeks and that do business, have employees, or take applications for employment in New Jersey, must make certain internal and external pay disclosures.
Specifically, covered employers must disclose, in each posting for new jobs and transfer opportunities that are advertised externally or internally, the hourly wage or salary, or a range of the hourly wage or salary and a general description of benefits and other compensation programs for which the employee would be eligible.
Covered employers must also make “reasonable efforts” to announce, post, or otherwise make known opportunities for promotion (defined as a change in job title and an increase in compensation) that are advertised internally or externally to all current employees in the affected department(s) before making a promotion decision. But promotions awarded on the basis of years of experience or performance are exempt from this requirement.
We anticipate further guidance from New Jersey in the upcoming months to help clarify these requirements.
Vermont
Beginning July 1, 2025, employers that do business in or operate in Vermont and have five or more employees must include compensation or a range of compensation in any advertisement of a specific Vermont job opening.
The “range of compensation” means the minimum and maximum annual salary or hourly wage that the employer expects, in good faith, to pay for the advertised job at the time the employer creates the advertisement.
Covered “Vermont job openings” include positions open to internal and/or external candidates and positions into which current employees may transfer or promote into that are (a) physically located in Vermont, or (b) performing work for an office or work location that is physically located in Vermont.
Notably, the Vermont law does not require a general description of benefits and other compensation.
Massachusetts
The Massachusetts Pay Transparency Act (the Act) requires employers with more than one hundred employees to submit wage data reports annually, with the first report being due by February 1, 2025. However, the Massachusetts Executive Office of Workforce Development has recently stated that covered employers will need only submit their most recent EEO-1 filings by February 1, and not provide any wage data.
In addition to the filing requirement, beginning October 29, 2025, employers with twenty-five or more employees in Massachusetts must: (1) disclose the pay range for a “particular and specific employment position” in the job posting for that position; (2) provide the pay range for a “particular and specific employment position” to an employee who is offered a promotion or transfer to a new position; and (3) upon request, provide the pay range for a “particular and specific employment position” to an employee holding that position and an applicant for that position. A “pay range” means the annual salary range or hourly wage range that the employer reasonably and in good faith expects to pay for the position at that time.
The Massachusetts law also imposes a host of pay reporting requirements that seem to depend on the U.S. Equal Employment Opportunity Commission (EEOC) implementing pay data reporting obligations. Given the upcoming change in presidential administrations, it is unclear at this point whether the EEOC will actually move forward with any such pay data reporting.
Key Takeaways
Employers may want to consider taking the following steps:
- Training managers and HR professionals on these new compliance obligations, including promotion and opportunity requirements, and on how to respond to pay inquiries from job applicants and current employees
- Reminding managers and supervisors that employees are allowed to discuss their pay with others
- Undertaking a privileged pay equity audit
- Developing/refining pay philosophies as needed to ensure consistency throughout the organization
- Updating handbook policies to include anti-retaliation language to protect employees who raise concerns about pay transparency compliance
- Watching for enforcement actions to understand state priorities and clarifications on requirements. For example, Colorado publishes state enforcement information. It is likely that Illinois, Minnesota, Vermont, Massachusetts, and New Jersey will similarly publish details about enforcement and penalties.
- Reviewing state guidance to provide clarity on statutory language. Colorado, Maryland, New York, and Washington are some states with helpful guidance. For example, Maryland’s guidance illustrates the “general description of benefits” requirement by listing “Employer provided insurance such as health or life or other employer-provided insurance, Paid or unpaid time off work such as paid sick or vacation days, or leaves of absence, Retirement or savings funds such as 401(k) plans or employer-funded pension plans, or Other forms of compensation such as the value of employer-provided meals or lodging.” It further illuminates the “other compensation offered” by providing, as examples, “overtime, compensatory time, differentials, premium pay, tips, commissions, bonuses, stock or stock options, and any portion of service charges.”
- Auditing job postings for compliance, including job postings hosted on third parties’ sites
Ogletree Deakins’ Pay Equity Practice Group will continue to monitor developments and will provide updates on the Pay Equity and State Developments blogs as additional information becomes available.
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