Farmington Failed Minnesota's Pay Equity Standards
TLDR
Farmington didn't pass Minnesota's pay equity report in its most recent submission (January 2026).
The city faces fines of $100/day or 5% of state aid withheld if it doesn't fix the problem.
Council approved a $56,100–$83,600 compensation study with MRA to overhaul the pay structure.
The last time Farmington did a study like this was 2013 — 13 years ago.
Farmington has a pay problem. And it's not a small one.
At the April 6 city council meeting, HR Manager Samantha presented the results of the city's most recent pay equity submission to the state. The bottom line? Farmington didn't pass.
What Is Pay Equity, and Why Does It Matter?
Minnesota is the only state in the country that requires public employers to prove men and women are paid fairly for work of comparable value. Cities, counties, and school districts have to submit pay data every three years. The state reviews it and says whether you pass or fail.
Farmington submitted in January 2026 using 2025 data. They failed.
The consequences aren't theoretical. Under Minnesota law, failing means the state can fine the city $100 per day or withhold 5% of state aid — whichever is greater. The city has 90 days from receiving notice to either fix the problem or submit a plan.
Why Farmington Failed
The issue isn't one bad hire or a single misaligned salary. It's structural. The city's current pay and classification system doesn't line up with what the state requires. There are discrepancies across full-time, part-time, union, and non-union positions.
As City Administrator David pointed out, the last comprehensive compensation study was done in 2013. Thirteen years without recalibrating means job descriptions have changed, working conditions have shifted, but pay classifications stayed the same.
The HR manager also noted this isn't a new problem. There's been a history of non-compliance scattered across the last six years. It just reached the point where the state is now threatening penalties.
The Fix: A Full Compensation Overhaul
Council approved hiring MRA — the largest employer association in the country — to conduct a comprehensive compensation and classification study. The cost ranges from $56,100 to $83,600 depending on hours required.
Here's what that looks like over six months:
MRA meets with staff, reviews every job description, and sends out questionnaires to all employees.
Supervisors and employees confirm accuracy of each position's description.
MRA surveys comparable cities to see how Farmington's pay stacks up against the market.
A new pay structure gets built from the ground up.
MRA runs a pay equity analysis to make sure the new structure passes before anything is adopted.
Training for supervisors so the system stays consistent going forward.
The city is also becoming an MRA member, which gives them ongoing access to HR resources, discounted rates, and tools to stay compliant long-term.
What It Costs — and Why It's Worth It
The study wasn't in the 2026 budget. Staff recommended using the city's general fund balance to cover it. Farmington ended 2024 with a fund balance of about 57% of general fund expenditures — well above the city's policy target of 40–50%.
Council Member Holly Bernatz summed it up: the city spends an enormous amount on staff pay already. Spending a fraction of that to make sure it's structured correctly is a net win — even without the threat of state fines.
Mayor Lien added that private companies do pay band studies constantly. The fact that Farmington went 13 years without one is the real issue.
The Bottom Line
This is one of those behind-the-scenes things that most residents never think about — until something goes wrong. The pay equity failure is a wake-up call, but the city is responding quickly. The study kicks off soon and should be complete within six months.
If you want to dig into the details, the full MRA proposal and pay equity documentation are in the April 6 council agenda packet.
FAQ
Does this mean city employees were being paid unfairly?
Not exactly. It means the system used to score and classify positions hasn't been updated in 13 years. Some jobs have changed, but how they're placed on the pay grid hasn't kept up.
Will this raise my taxes?
The study itself comes from the city's existing fund balance — not a tax increase. Any future pay adjustments would depend on what MRA finds.
Is Farmington the only city with this problem?
No. Pay equity compliance issues pop up across Minnesota municipalities. It's just that Farmington let it go too long without a full study.
What happens if the study shows big pay gaps?
The council will have to make decisions about how to implement changes. Staff said they'll bring recommendations to council at several points during the process.
When will this be done?
About six months from when MRA kicks off the project.
