U.S. - Minnesota pay data reporting law guide

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Introduction

In Minnesota, a Workforce Certificate is required for government contractors with 40 or more employees and a contract that is generally more than $100,000 with certain Minnesota public entities. An Equal Pay Certificate is required for government contractors with 40 or more employees and a contract of a larger dollar amount, which is generally more than $500,000 with certain Minnesota public entities.

In addition, Minnesota's pay equity law requires all public jurisdictions such as cities, counties, and school districts to eliminate any gender-based wage inequities and submit reports to the Minnesota Management and Budget Office.

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Minnesota Reporting Requirements

Who Needs to Report?

Workforce Certificate: All federal or state/government contractors and public subdivisions with 40 or more employees must obtain a Workforce Certificate.

Equal Pay Certificate: All federal or state/government contractors and public subdivisions with 40 or more employees are required to obtain an Equal Pay Certificate.

Local Government Pay Equity Act: All public jurisdictions in the state of Minnesota must comply with the pay equity reporting law.

What to Report?

Workforce Certificate: Employers must gather employee-level data to comply with the Equal Pay Certificate and Affirmative Action Plan (AAP) requirement in addition to keeping records of employee ID, employee name, daily hours worked, and rate of pay - as well as company plans and policy information.

Contractors must submit an AAP to receive a Workforce Certificate, and the AAP must include a Workforce Analysis that includes detailed employee-level demographic data, compared against an availability pool per sector. The goal of this analysis is to determine whether the contractor is under-utilizing women or minorities in its workforce, based on the available labor pool.

The AAP must be available for inspection to an employee or applicant for employment upon request. The location and hours during which the plan may be obtained must be posted at each facility.

The employer is required to publicize the AAP in the company newspaper, magazine, annual report, and other media.

Equal Pay Certificate: Employers must gather data on employee categories and pay bands across gender, race/ethnicity, and indigenous status. Employers are advised to gather information in relation to pay policies between men and women to inform whether the company is consistently underpaying women vs. men. A pay equity analysis and any necessary corrective measures for unexplained pay gaps are needed to obtain an Equal Pay Certificate.

There is no internal or external disclosure requirement around the Equal Pay Certificate.

Local Government Pay Equity Act: All public jurisdictions in the state must gather data about jobs such as job title, job points, number of employees (male, female, nonbinary), minimum and maximum salary, years of service or years to max. The jurisdictions must perform a job evaluation and pay equity analysis that they then submit in a report to the Minnesota Management & Budget Department.

Each jurisdiction must submit a statement verifying that employees have been notified that the report is public data under the Minnesota Government Data Practices Act. External posting is not specifically required, but the information is accessible by the public.

Where and When to Report?

Workforce and Equal Pay Certificates: Applicable employers that are entering into a contract with a designated Minnesota public entity are required to obtain an Equal Pay Certificate and Workforce Certificate. The certificates are valid for four years, after which a contractor must apply for renewal.

Local Government Pay Equity Act: Jurisdictions must submit reports electronically to the Minnesota Management and Budget Office portal. Reports must be submitted annually by Jan. 31 for the previous reporting year.

Minnesota Pay Transparency Requirements

On May 17, 2024, Minnesota passed a pay transparency law (SF3852), which will take effect Jan. 1, 2025. The law requires employers with 30 or more employees to provide a salary range on job postings as well as a general description of all benefits and other compensation.

Employment Equity Standards

Minnesota uses the U.S. standard of equal pay for equal work or substantially similar work.

The federal Equal Pay Act of 1963 requires that men and women in the same workplace be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal. If there is an inequality in wages between people of different sexes who perform substantially equal jobs, employers must raise wages to equalize pay but may not reduce the wages of other individuals.

Minnesota's Equal Pay for Equal Work Law closely replicates and reinforces the Equal Pay Act of 1963 at the state level.

The Risks of Non-Compliance

Since the Minnesota pay equity law applies only to public/government employers, there is no specification for fines or penalties if an entity fails to comply with the requirement.

For the Equal Pay Certificate and Workforce Certificates, the Minnesota Department of Human Rights (MDHR) is authorized by the Minnesota Human Rights Act to periodically audit contractors to ensure they are making good faith efforts toward hiring, training, promoting, and retaining people of color, indigenous people, people with disabilities, and/or women.

If a contractor is non-compliant, MDHR can issue fines up to $5,000 per calendar year for each contract. In addition, MDHR can suspend or revoke a non-compliant contractor's certificate, which could cancel current contracts and limit the contractor's ability to contract on future projects.

How Can Trusaic Assist with Minnesota Equal Pay & Workforce Certification, Pay Equity Reporting and Pay Transparency Requirements?

1. Comply - Use Trusaic's GPDR solution to complete required reporting by compliance deadlines:

Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.

Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.

Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape. Receive world-class customer support, including assistance throughout the compliance process.

Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with the world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP. Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.

Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.

Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.

Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.

2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:

Risk Assessments: Stay aware of any potential exposure to any government audit or litigation. Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.

Understand your Pay Gaps: Leverage Trusaic's pay equity software solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.

Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.

Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using opportunity equity software solution.

3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:

Workplace Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite. Show data-backed progress in your pay gaps over time.

Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.

Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.

Sign up for PayParity by July 31, 2024
and receive OpportunityParityTM at no additional cost

Sign up for PayParity by July 31, 2024 and receive OpportunityParityTM at no additional cost