Like many of you, I attended WorldatWork’s Total Rewards Conference in Cincinnati earlier this month. And let me tell you: Pay transparency is still a hot topic, which lawmakers are recognizing as well. I was so encouraged to hear how many organizations are making pay transparency a priority, regardless of whether there is a legal requirement in their area to post salary ranges.
Here are some updates from the past month, which finally include some news coming out of Europe.
Minnesota
On May 17, 2024, Governor Tim Walz signed SF 3852 into law.
Beginning January 1, 2025, employers with 30 or more employees in Minnesota will be required to include a minimum to maximum salary/hourly range (that is a good faith estimate at the time of posting) plus a general description of benefits in job postings.
It is unclear whether this law will require employers posting remote roles to comply. It’s likely that employers with 30 or more employees in Minnesota who post remote roles will be required to comply.
Vermont
Will Vermont be the next state to pass a pay transparency law? Maybe.
On May 10, 2024, the Vermont General Assembly passed H.704, requiring employers to include salary ranges in job postings.
If signed by the Governor, beginning July 1, 2025, employers publishing internal/external job postings for roles physically located in Vermont or remote positions that will be predominantly performed in Vermont must include the minimum and maximum salary/hourly range that the employer expects, in good faith at the time of posting, to pay for the role. If the role is partly paid by tips or commissions, employers must disclose that in addition to sharing the base wage.
We now need to wait and see if Governor Phil Scott will sign the bill into law. While there’s some hope that he will sign this bill, it may have the same fate as Virginia’s bill that was vetoed by their governor earlier this year.
EU Pay Transparency Directive
Many thought that EU Member States would wait until the eleventh hour to transpose the EU Pay Transparency Directive into law, but that does not seem to be the case.
German officials have stated that Germany will transpose the EU Pay Transparency Directive into law by the end of their legislative period. Stay tuned for a more precise schedule.
On May 29, 2024, the Swedish Government issued a 388-page report giving us insight into how they might transpose the EU Pay Transparency Directive into law. While this is a preliminary/non-binding report, it does seem to indicate that Sweden may copy-paste the EU Pay Transparency Directive. Here are some highlights from their preliminary report in terms of what they plan to include:
Salary history ban:
Employers cannot ask candidates about salaries from previous employers.
Pay transparency:
Current employees:
– Employees can request information about their salary and the average salary of other employees performing equal or equivalent work, broken down by gender.
– Employers must also let employees know of their right to request salary information yearly. This mandate will help employees assert their right to equal pay.
– Employers with more than 100 employees must provide the four most recent pay equity analyses conducted if their pay gap is greater than 5% and is not explainable.
Candidates:
– Swedish employers will have the option either to verbally provide a salary range to applicants or include the salary range in job postings.
Pay equity analysis:
– Employers with 10 or more employees must conduct an annual pay equity analysis (no change from current Swedish requirements).
– Employers with 100–150 employees (full time and part time) must conduct pay reporting (gender-based) every three years.
– Employers with over 250 employees must report annually.
– Employers must justify any pay gaps greater than 5%, or else the Equality Body has the right to request more information.
Sanctions:
– Fines and damages for failure to comply. The maximum fine is 50,000 Euros.
– As more information becomes available, we will be sure to share it with you.
A little something extra…
Here at Payscale, our customers are asking us a lot about the new FLSA overtime regulations. In case you haven’t heard, the Department of Labor recently announced that beginning July 1, 2024, the annualized salary threshold to qualify for the white-collar exemptions will increase to $43,888, and then to $58,656 on January 1, 2025.
The DOL is also increasing the threshold for the “highly compensated executive” exemption to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025.
This means that employees who are making less than these thresholds may be entitled to overtime pay.
How should you prepare?
- Audit your salaries and job roles.
- Ask yourself:
- Are going to raise salaries to maintain exempt status?
- Are you going to reclassify these folks as non-exempt and entitled to overtime instead of raising their salaries?
- Will there be budget implications if these folks are now entitled to overtime?
- Review and update your overtime policies.
As a reminder, FLSA audits are a legal analysis that should be conducted in conjunction with your employment counsel or General Counsel.
Legal challenges to this rule are anticipated, which may delay the effective date. However, it’s likely best practice to prepare as though the rule is taking effect on July 1.
We are still keeping an eye on proposed pay transparency laws in the following states in 2024:
- Maine
- Massachusetts
- Missouri
- New Jersey
- Pennsylvania
- Vermont
Payscale will be closely following the progress of these bills.
