Colorado Legislature Updates Equal Pay for Equal Work Act: Here’s What You Need to Know

Colorado’s Equal Pay for Equal Work Act was passed in 2019 and became effective in 2021. Equal Pay for Equal Work legislation aims to eliminate gender-based wage discrimination by ensuring that all employees receive fair compensation for their work. These laws prohibit employers from paying employees differently based on their gender for performing substantially similar work. By establishing clear guidelines for employers and providing employees with legal recourse, these acts try to foster a more equitable work environment.

How do state Equal Pay for Equal Work Acts differ from the Equal Pay Act of 1963?

The Equal Pay Act of 1963 (EPA) is a federal law whereas Equal Pay for Equal Work Acts are state laws that provide additional obligations and rules. The EPA, which amended the Fair Labor Standards Act, is a federal law that prohibits employers from engaging in wage discrimination based on sex. It covers all forms of compensation such as salary, overtime pay, bonuses, life insurance, vacation pay, travel expenses reimbursements, and benefits. various elements must be met in order for someone to be successful in making an EPA claim; the comparable jobs must require substantially equal skill, effort, and responsibility and must be performed under similar working conditions within the same establishment.¹ Additional federal laws protect workers against compensation discrimination, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA) of 1967, and Section 501 of the Rehabilitation Act of 1973.²

Various state legislatures, including Colorado, have enacted their own laws on the matter to ensure no wage discrimination is taking place. These state laws act as another layer of protection for workers and create more obligations or restrictions for employers.   

For example, Colorado’s law takes the obligations a step further and requires several procedural guidelines such as requiring employers to consider more than one candidate when offering opportunities or promotions.

So, why did the legislature amend the Act?  

Sometimes when new laws are made, it is difficult to predict what issues and ambiguities in implementation and compliance might come up. With Colorado’s Act, it was only after passage and enactment that the legislature realized there was a need for clarification.  

Because the original Act required employers to disclose salaries on job postings, some employers around the nation looking for remote workers were excluding Colorado from its applicant pool; the amended Act now has an exception to address this unintended effect.³

The terminology used in the 2019 Act left too much room for ambiguity, which in turn made it difficult to ensure employers were in compliance.

Lastly, the original Act authorized the Director of labor standards and statistics in the Department of Labor and Employment to create and administer a process to accept and mediate complaints, provide legal resources concerning alleged wage inequity, and promulgate rules as necessary. The amended Act requires these activities by the Department.

What Do Business Owners Need to Know?

As long as the governor signs the law, which he is expected to do, it will become effective on January 1, 2024.

The amendment defines a few new terms:

• Career development means “a change to an employee’s terms of compensation, benefits, full-time or part-time status, duties, or access to further advancement in order to update the employee’s job title or compensate the employee to reflect work performed or contributions already made by the employee.”⁴
• Career progression is defined as “a regular or automatic movement from one position to another based on time in a specific role or other objective metrics.”⁵
• Job opportunity means “a current or anticipated vacancy for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts,” but does not include “career development” or “career progression.”⁶
• Vacancy is defined as “an open position, whether as a result of a newly created position or a vacated position.”⁷

The amendment places some new requirements on employers regarding hiring, posting job opportunities, making announcements of promotions, new hires, and transparency in benefits, duties, and promotional advancement. 

Employers will now need to make a reasonable effort to “announce, post, or otherwise make known” job opportunities to current employees on the same day those job opportunities are posted to the public and before selecting a candidate for the position.⁸ The exception to this is if an employer is located outside of Colorado and has fewer than fifteen employees (all working remotely in Colorado), the employer is then only required to give notice of remote job opportunities; this exception will end on July 1, 2029.

When announcing a job opportunity, employers must disclose (1) the hourly or salary compensation either in number or a range; (2) a description of the benefits and other compensation; and (3) the application window. Once an employer has selected a candidate for a job, the employer must make a reasonable effort to “announce, post, or otherwise make known, within thirty calendar days” the new person beginning the position, including the person’s: (1) name, (2) former job title if selected while already employed by the employer; (3) new job title.⁹ The employer will have to also “make available" the requirements for career progression and each position’s terms of compensation, benefits, full or part-time status, duties, and access to further advancement to eligible employees.

There are procedural updates to the process of investigations and accepting complaints regarding alleged violations. Also, when a violation has been found, the aggrieved person may now receive up to six years of back pay (previously only three years’ worth).

Conclusion

The update to Colorado’s Equal Pay for Equal Work Act demonstrates Colorado’s commitment to the cause and its desire to increase compliance. It may affect how employers recruit, hire, and handle promotions. Business owners, managers, HR and hiring departments should be aware of the changes in the Act to ensure they are complying with Colorado law.

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¹ https://www.dol.gov/agencies/oasam/centers-offices/civil-rights-center/internal/policies/equal-pay-for-equal-work

² Id.

³ Many Companies Want Remote Workers—Except from Colorado - WSJ

⁴ Ensure Equal Pay for Equal Work | Colorado General Assembly

⁵ Id.

⁶ Id.

⁷ Id.

⁸ Id.

⁹ Id.

Featured Image by Rebecca Sidebotham.