What to Know About Minnesota’s Pay-Gap Law

Minnesota now prohibits employers from asking about current or prior pay, in hopes of making wages equal
Rich and poor people with different salary, income or career growth unfair opportunity. Concept of financial inequality or gap in earning. Flat vector cartoon illustration isolated

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Media outlets dubbed last year the “Year of the Girl.” Onscreen and onstage were Barbie, Beyonce, and Taylor Swift. On trend were bows, sequins, and pink. It was like ’90s girl power but for today’s culturally savvy. There was knowing scorn, after all, in actor America Ferrera’s viral “Barbie” monologue, about the state of women. Holding court in a rainbow-streaked set piece, Ferrera’s character marvels at the contradictions: Be a boss, but don’t be mean; be pretty but never tempting or threatening; “…always stand out and always be grateful, but never forget that the system is rigged,” she fumes. “So, find a way to acknowledge that, but also always be grateful.”

At the end of last year, Minnesota got in on this sentiment with the passage of a pay-gap law. The Preventing Pay Discrimination Act makes it illegal for employers to ask prospective employees about past or current pay. Instead, the law pushes employers to set pay based on applicants’ “skills, education, certifications, licenses, and other qualifications, as well as the job market.” When the law went into effect Jan. 1, Minnesota joined 22 other states in banning the pay-history query. It’s intended to make the “system” a little less rigged.

As a don’t-ask policy, it works by plugging up a leak in anti-discrimination legislation. White women in Minnesota are paid, on average, 81 cents for every dollar earned by white men, according to the 2022 Status of Women & Girls in MN report, from the Women’s Foundation of Minnesota and the Center on Women, Gender, and Public Policy at the University of Minnesota. For Asian American women, that figure is 71 cents. For Black and Native women, it’s 61 cents. And for Latina women, it’s 55 cents. Men of color are also paid substantially less, earning 8 to 16 cents more than women of the same race or ethnic group.

“The wage gap between men and women persists, and actually there has been remarkably little change, if you look at, say, the last 10 or 20 years,” says University of Minnesota law professor Jill Hasday, who testified on behalf of the new law. This disparity conflicts with 1963’s Equal Pay Act, which outlawed pay discrimination based on sex.

Now, where does that pay-history question come into play? “In a number of cases, women sued under either the Equal Pay Act or Title Seven, or both,” Hasday says, adding that some women could show evidence they were paid less than men who worked the same job or a subordinate one. “At least some courts accepted the argument that it was not pay discrimination, violating these federal statutes, if the employer could point to the woman’s history of being underpaid elsewhere as the reason for the discrimination.”

Here, a domino effect may occur: Discrimination at one job sets up a pattern of lower pay, since employers keep setting wages according to past salaries. Another question tends to arise: Do you sit tight, though paid unfairly? Or do you speak up, potentially risking employment?

Lt. Gov. Peggy Flanagan, the highest-ranking Native woman in state politics, shared a story publicly, during the passage of the law, about her own run-in with this question. Working for a nonprofit before she became lieutenant governor, she realized her role’s predecessor, a white man, had made $40,000 more. “During the interview process, I was actually asked what it was that I made at my current employer,” she says. “Even factoring in experience and years of service, that gap was significant enough that it was pretty clear to me that sharing my salary really put me in a tough spot.”

In the same hot seat are “so many women—and so many women of color, Indigenous women—who just start that much farther behind,” she says.

If the law sounds simple, that’s meant as part of its appeal. “There’s no paperwork,” Hasday says. “Just don’t ask the question.” Job applicants may bring up past or current pay if they choose, for negotiating.

So, does it work? Hasday points to a study released by Boston University School of Law in 2020 comparing counties in the same labor market. “But some of the counties were subjected to a pay-history ban.” Those counties showed a salary bump for job seekers of 5-6%. Women, specifically, saw a roughly 8% increase, and African American women’s wages rose about 13%.

Hasday says the law’s intersectionality also hugely boosts its appeal, covering both race and sex. “It will help women and anyone else with a history of being underpaid”—meaning men of color, too.

She adds that, for companies, the greatest “compliance cost”—which, in the example of tax law, might mean tedious paperwork—should merely involve deleting that question from online applications.

Enforcing the new law is the Minnesota Department of Human Rights. Those who spot violations can fill out a form on the department website. Both parties may then engage in mediation, says department commissioner Rebecca Lucero. “There’s a neutral investigation to determine if there is a violation of the law.” The Minnesota Human Rights Act offers “multiple remedies,” including civil penalties and compensatory or punitive damages.

“We have many cases—around 600 cases—open at any given time, sometimes more,” Lucero says. “So, I’m always asking people to recognize that it could take a little bit of time for their case to go before an investigator or for the investigation process to move forward.”

But the aim, Hasday says, is not to whip up lawsuits. It is “to make people aware, so the situation improves without litigation.” 

Next, Hasday wants more legislation on pay secrecy, whereby companies discourage openness about wages. Flanagan says to expect that cultural issue to crop up soon. Already, it’s illegal for Minnesota employers to prohibit employees from disclosing wages.

Returning to her own $40,000 wage gap—and the “Barbie” comparison—Flanagan recalls she went “back and forth” about what to do. “I also, honestly, loved my job,” she says, “and I was good at it.” She describes a “dance” she and many women know: Stand up for equal pay but don’t cause a stir. “There is also, I think, this expectation that women will do the job because they care about the community,” she says—without requiring compensation equal to what white men would receive.

“There were some people who said, ‘Well, employers are going to end up paying workers more,” Hasday says, recounting some pushback, “to which I would say, ‘Exactly.