As currently proposed, H.F. 2373 would expand the scope of Minnesota’s pay equity law. State law currently only requires public entities (counties, cities, etc.) to eliminate sex-based wage inequities in compensation and provide compliance reports to the state. The bill would dramatically expand the number of employers who have to undertake the elimination of sex-based wage inequities and seek certification from the State of Minnesota.  

The bill would extend the obligation to secure pay equity certification to any business bidding on government contracts in excess of $500,000, provided the business has at least 40 full-time employees in Minnesota. Any business seeking to secure a government contract of that magnitude must first prepare a plan to establish equitable compensation relationships within the state and secure a certificate of pay equity compliance.

Sometimes referred to as “comparable worth” laws, these statutes are designed to go beyond laws that prohibit intentional sex discrimination. They are intended to increase the compensation of female-dominated jobs to the extent those jobs have responsibility and knowledge requirements similar to male-dominated jobs.

The process of certification entails an evaluation of all of the employer’s jobs.  Those jobs are individually rated on a point system based upon the level of knowledge and responsibility involved in performance of the job. Salary adjustments are made thereafter if the study indicates that women are consistently paid less than men for jobs with similar point valuations.

The bill would include a temporary provision which would allow, until July 1, 2015, a business that is not in compliance with these standards to pursue government contracts provided that the Commissioner of Human Rights has approved a statement of the business’s intention to prepare a pay equity report with an estimated completion date of no later than July 1, 2016. The employer would have to submit information on its current status, including a statement on the existence of a job evaluation system, the number of male and female employees of the business in Minnesota and a statement as to the business’s interest in receiving training on how to establish equitable compensations relationships.

The companion bill in the Senate is S.F. 1806.