Five states have joined the growing number of states with pay transparency laws requiring employers to include compensation information in job postings. An Illinois law and a Minnesota law took effect on January 1, 2025, and New Jersey, Vermont, and Massachusetts laws will take effect later this year. While the new laws differ in their specific requirements, they generally mirror pay transparency statutes passed in recent years in other states, including California, Colorado, and New York, that require employers to disclose pay ranges, and sometimes benefits information and other compensation, in job postings.
The new laws are summarized below:
- The Pay Transparency Amendment to the Illinois Equal Pay Act of 2003 (effective January 1, 2025) requires employers with 15 or more employees to include in job postings a wage or salary range and a general description of the benefits and other compensation (including bonuses, stock options, etc.) for the position. The law applies to positions that will be physically performed, at least in part, in Illinois, or will be performed outside Illinois but the employee reports to a supervisor, office, or other work site in Illinois. Also, when an employer posts a job externally, the employer also must, within 14 days, announce, post, or otherwise make known to all current employees such posting to the extent it would represent an opportunity for promotion for existing employees. Employers must preserve records of job postings for at least five years.
- The Minnesota Omnibus Labor and Industry Policy Bill (effective January 1, 2025) requires employers with 30 or more employees in Minnesota to disclose in job postings the starting pay range and a general description of all benefits (including health and retirement benefits) and other compensation offered for the position. The law is silent as to whether it applies to jobs performed outside Minnesota.
- New Jersey Senate Bill No. 2310 (effective June 1, 2025) will apply to employers with ten or more employees over 20 calendar weeks in a given year that do business, employ workers, or take applications for employment in New Jersey; the law does not specify whether all ten employees must be located in New Jersey. These employers will be required to include in job postings the hourly wage or salary range and a general description of benefits and other compensation programs for which the employee would be eligible. The law also will require employers to make “reasonable efforts” to announce, post, or otherwise make known to current employees opportunities for promotion that are advertised internally or externally prior to making a promotion decision. The law is silent on whether it will apply to jobs performed outside New Jersey.
- Vermont H.704 (effective July 2025) will apply to employers with five or more employees, but does not specify whether all five employees must be located in Vermont. Covered employers must include in job advertisements the compensation or range of compensation for the job opening. For roles that will be paid on a commission basis, employers must only note in the job advertisement that the role will be paid on commission and need not disclose the compensation or range of compensation. The law will apply to job advertisements for positions that will be physically located in Vermont and to remote positions that will predominantly perform work for an office or work location physically located in Vermont.
- The Massachusetts Frances Perkins Workplace Equity Act (effective October 29, 2025) will require employers with 25 or more employees in Massachusetts to disclose pay ranges in job postings. Employers also must disclose pay ranges to employees offered promotions, transfers, or new positions with different responsibilities. The law is silent as to whether it applies to jobs performed outside Massachusetts. The law separately will require employers that have 100 or more employees and are subject to federal EEO-1 reporting obligations to file the EEO-1 wage data report with the state.
With regard to how pay or compensation range is defined in these new laws, the Illinois, Massachusetts, Minnesota, and Vermont laws generally provide that the pay range means the minimum and maximum compensation the employer reasonably expects to pay for the position, based on the employer’s good-faith estimate, and the New Jersey law does not define pay range. The Minnesota law expressly prohibits employers from posting open-ended pay ranges, and guidance from the Illinois Department of Labor states that employers should avoid open-ended phrases like “$40,000 and up” or “up to $60,000.” Under each of the new pay transparency laws, employers that fail to comply may be subject to fines or civil penalties.
In light of the growing number of states enacting pay transparency laws, employers should review their job postings and advertisements and revise to include pay ranges and other information as required by applicable laws. Employers should also ensure that all job postings provided to third parties to advertise on the employer’s behalf contain the necessary information to comply with applicable pay transparency laws.
If you have any questions concerning state pay transparency law requirements, please contact members of Covington’s Employment practice.