2025 Pay Transparency Laws: What Small Businesses Need to Know

If your business has fewer than 100 employees, upcoming pay transparency laws could still have a significant impact. Starting in 2025, states like Illinois and Minnesota will require businesses to include salary ranges and benefit details in job postings. While these rules aim to promote fairness and equity, many small businesses may find compliance challenging without preparation.

What’s Changing for Small Businesses?

• Illinois Requirements: Employers with 15 or more employees must include pay scales in job postings and notify current employees about open positions.

• Minnesota Guidelines: Businesses with 30 or more employees must disclose starting salary ranges and provide a general description of benefits. Open-ended salary ranges will not be allowed.

• Broader Impacts: By the end of 2025, 14 states will have similar laws in place, potentially influencing smaller businesses that compete for talent.

Challenges for Small Businesses

• Limited Resources: Unlike larger companies, small businesses may lack HR staff or systems to track and communicate pay ranges effectively.

• Employee Concerns: Pay transparency can lead to tough conversations among team members about fairness and equity.

• Attracting Talent: Transparency may be a competitive advantage, but small businesses need to balance this with budget constraints.

How Small Businesses Can Prepare

1. Start Early with Pay Equity Audits

   • Ensure pay practices are consistent across roles and individuals to avoid potential issues when salary ranges are disclosed.

2. Develop a Communication Strategy

   • Be proactive in sharing pay information with employees to build trust. Surveys show that employees often view unclear pay practices negatively, even when pay is fair.

3. Streamline Job Postings

   • Standardize how pay and benefits are described in postings to save time and reduce compliance risks.

Why It Matters

Increased transparency isn’t just about compliance—it’s about building trust with your workforce. Businesses that openly share pay information are more likely to attract and retain top talent, even with limited resources.

Compliance on a Budget

For small businesses, every dollar counts. Many industry groups and law firms can help businesses navigate these changes cost-effectively. This site may help Illinois employers: Equal Pay Act Pay Transparency FAQ.

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 Disclaimer: Tzinberg & Associates provides this communication for general guidance only. It does not constitute tax advice, accounting services, investment advice, or professional consulting. Consult a professional adviser before making decisions or acting, as the information is provided "as is" without any warranties regarding its completeness, accuracy, or timeliness.