Colorado Pay Transparency Law Requirements

The days of keeping salaries a secret are coming to an end. Today’s workforce, especially younger generations, is increasingly vocal about wanting transparency, equity, and fairness in the workplace. They’re not just asking for it, they’re expecting it. 

To address this, states across the U.S. have been rolling out pay transparency laws. Among the leaders is the state of Colorado. With its legislation, Colorado has set a precedent for pay transparency and wage equity, changing how employers approach everything from job postings to compensation reviews. 

So, if you're in Human Resources (HR) and managing employees in Colorado, or even just hiring remote talent there, it’s critical to understand the details and nuances of Colorado pay transparency laws. It’s important not only to stay compliant, but to build trust, attract and retain top talent, and create a more equitable workplace culture. 

Here are three key takeaways you’ll learn in this article: 

1. Objectives and key provisions of CO’s Pay Transparency Law, including pay disclosure and internal job opportunity notifications 
2. Which employers are covered and key provisions of the law 
3. Common issues to be aware of and HR best practices 

Overview of the Colorado Pay Transparency Law 

So, what is the state’s law? Colorado’s pay transparency law is officially known as the Equal Pay for Equal Work Act (EPEWA), which originally took effect on January 1, 2021. Since then, it has undergone several clarifications and updates, with the most recent updates introduced via Senate Bill 23-105, which took effect on January 1, 2024. 

The intent behind the law is straightforward but powerful: to eliminate gender-based pay disparities and bring clarity to the hiring and promotion processes. The key goals of the law include: 

• Promoting pay equity 
• Improving transparency in job opportunities and compensation 
• Protecting employees from wage discrimination and “secrecy”

Who Must Comply 

This law applies to any employer with at least one employee working in Colorado, including remote positions that can be performed within the state, even if the company is based elsewhere. In other words, if you post a job online and a Coloradan can apply, then you’re likely subject to this law. 

Notably, updates in 2024 have made a few allowances for small out-of-state employers such as those with fewer than 15 remote Colorado workers may be exempt from some of the internal job posting requirements but must still disclose compensation. 

Key Requirements for Employers 

Under this law, there are some main requirements that employers need to follow, including: 

Pay Disclosure Requirements 

Under Colorado’s law, employers are required to be upfront about pay at several key stages of the employment process. 

Job Postings Must Include: 

• Salary or hourly pay range: This must be a good-faith range that the employer genuinely believes it might pay for the position. For example, “$55,000 to $70,000 annually” is acceptable. But vague language like “competitive salary” or “commensurate with experience” doesn’t cut it anymore. 

• General description of bonuses, commissions, or other incentives: You don’t need exact numbers, but you do need to mention the existence and type of variable compensation. 

• Description of benefits: This includes healthcare options, retirement plans, paid time off, and any tax-reportable perks. Smaller perks like snacks or on-site yoga classes are not required. 

These disclosures apply to all job postings, including internal promotions or transfers. 

Also, even if a job is listed as fully remote, if it can be performed from Colorado, the same pay disclosure rules apply. 

Prohibition on Pay History Inquiries 

One of the strongest components of the Colorado law is its position on salary history. 

Employers cannot: 

• Ask about a candidate’s past or current salary during interviews or on job applications. 

• Rely on salary history to determine pay. 

• Retaliate against an applicant who refuses to disclose their wage history. 

This provision helps prevent historical pay discrimination from following candidates from one job to the next. 

Employee Rights 

Employees in Colorado have the right to: 

• Discuss their pay without fear of retaliation. 

• Access job opportunity notifications, including details about pay and benefits. 

• File complaints with the Colorado Department of Labor and Employment (CDLE) if they believe the law has been violated. 

These rights are part of a shift toward wage transparency, aiming to give workers more leverage and insight into their earnings. 

Recordkeeping & Compliance Obligations 

The law also includes documentation requirements. Employers must: 

• Maintain job descriptions and wage histories for each employee for the duration of their employment plus two years. 

• Provide written notice of promotional opportunities to all eligible employees, even if the opportunity is located outside of Colorado (more information on this below). 

A new provision under SB 23-105 requires employers to notify employees who were not selected for a promotion within 30 days, adding another layer of transparency to internal hiring decisions. Failure to maintain proper records can lead to legal issues. In fact, if you don’t have the records, courts may assume the missing documents would have favored the employee’s claim. 

Job Opportunity and Post-Selection Notices 

Another change under SB 23-105 is how employers must handle internal job opportunity notifications. Employers must make reasonable efforts to announce, post, or otherwise make known each “job opportunity” to all Colorado employees on the same calendar day and before a selection decision  

Colorado has issued detailed guidance on this. Here is a quick overview: 

First off, what is a job opportunity? 

CO’s guidance (INFO #9A - the interpretive notice and opinion for the "Transparency in Pay and Job Opportunities" portion of the state’s Equal Pay for Equal Work act. It gives guidance for employers to handle transparency requirements as well as how to comply with the state's laws) explains that a “job opportunity”: 

• Exists when an employer is at least “considering” filling any “current or anticipated vacancy.”  

• Does not need to use a formal application process. If the employer is considering multiple candidates or just one person for a role (such as a promotion), then notice obligations are required. But “Career progression” and “career development” opportunities (discussed below) are not considered “job opportunities.” 

What is a Vacancy? 

According to CO’s guidance (INFO #9A,) any of the following are a “vacancy”: 

• A vacated position that an employer intends to fill a position that is open or is held by a departing employee; or 

• A newly created position, including when a new position is created or when an existing position is changed enough to make it a different position. 

Who Must Receive Notice? 

The guidance reiterates that employers must provide notices to all Colorado employees and cannot limit the notice to certain employees. INFO #9A provides an example: If a job opportunity for a sales agent becomes available, all employees must receive notice even if most of the employees are in higher-paid positions and are not likely to be interested in the open role. 

Job Opportunities: What’s Required? 

Employers must make reasonable efforts to notify all Colorado employees of a job opportunity on the same day, and before a selection is made. 

According to the guidance, a “job opportunity” exists anytime you’re considering filling a vacant or newly created role, whether you’re promoting someone or opening a new position. 

Career Progression vs. Job Opportunities 

Not all promotions trigger this notice requirement. 

Career progression opportunities, like automatic annual promotions (e.g., from Analyst I to Analyst II), are exempt if: 

• They follow a fixed, objective metric 

• There’s no managerial discretion 

But, if there's any subjectivity involved, like performance reviews or management approval, then the promotion must be treated as a standard job opportunity and noticed accordingly. 

Even when exempt, career progression still requires its own form of written notice to eligible employees, delivered shortly after the employee enters the new position. 

Other Exceptions to Notice Requirements 

Acting, Interim or Temporary Positions and Confidential replacements are also exempt from “job opportunity” notice requirements. 

Employers with no physical presence in Colorado and fewer than 15 remote employees in Colorado are exempt from the job opportunity notice requirements, but they still must disclose compensation and benefits, as well as when and how to apply, in covered job postings. 

Career Development Opportunities 

These are also exempt from job opportunity notices. They're promotions based on the work an employee has already done, rather than a competitive process. For example, a cashier who gradually takes on the duties of a head cashier may be reclassified without formal notice, unless a vacancy prompts the change, in which case full notice is required. 

Timing of Notice 

Generally, all employees must be notified of job opportunities on the same day. However, INFO #9A states that there is no prohibition against notifying certain employees in advance of the general notice (e.g., if an employer is assessing a specific individual’s interest in a promotion before notifying other employees of the job opportunity). 

Post-Selection Notice 

Once a job has been filled, employers must notify Colorado employees who work regularly with the promoted or hired individual. 

There’s no official format, but here’s a simple example: 

Ali C. has been promoted to Analyst IV from Analyst III. Any employee interested in similar opportunities in the future should email Human Resources at HR@company.com. 

Employees can request to remove their names and former titles from these notices in certain cases, providing a small privacy safeguard. 

Recordkeeping & Compliance Obligations 

Employers must maintain: 

• Job descriptions and wage history for each employee 

• Records for the duration of employment plus two years 

• Written documentation of promotion decisions 

Failure to keep proper records can result in courts assuming missing info would have favored the employee in a dispute. 

Penalties for Non-Compliance 

So, what happens if an employer doesn’t comply? 

The penalties can be steep and are meant to make sure that the law is taken seriously: 

• Fines ranging from $500 to $10,000 per violation. 

• Up to six years of back pay if an employee can prove wage discrimination. 

• Legal fees and court costs, if an employee prevails in a lawsuit. 

• Damage to employer reputation, which can negatively impact both customers and employees. 

Given how visible pay postings have become, especially on public platforms like LinkedIn and Indeed, non-compliance is becoming hard to hide and easy to report. 

Impact on Employers & HR Best Practices 

From an HR standpoint, this law doesn’t just require a few extra lines in a job posting, it demands a cultural shift. Let’s walk through how HR teams can navigate the Colorado pay transparency law smoothly and effectively. 

1. Update Job Postings Company-Wide 
   • Ensure that all postings include salary ranges, bonuses, and benefits. 
   • Standardize templates for consistency and compliance. 
   • Train hiring teams to review postings before they go live. 
2. Audit Compensation Structures 
   • Conduct internal pay audits to identify and resolve unjustified pay gaps. 
   • Document rationales for differences in pay such as experience, education, performance, or seniority. 
   • Adjust salaries as needed to align with the law and retain top talent. 
3. Train Managers and Recruiters 
   • Educate hiring teams, prohibited questions,  disclosure rules, and how “job opportunities” and “career progressions” are defined under this law 
   • Provide guidance on responding to pay-related questions from candidates and employees. 
   • Emphasize fairness and consistency in hiring and promotions. 
4. Review Internal Promotion Policies 
   • Create a clear process for internal promotions. 
   • Ensure all employees are notified of new opportunities, even those working remotely. 
   • Document reasons for promotion decisions and maintain that record. 
5. Plan for Multi-State Compliance 
   • If your company operates in multiple states, be aware that several other states (like California, Washington, and New York) have enacted similar laws, but with varying requirements. 
   • Instead of maintaining separate processes for each state, many employers are choosing to apply the most rigorous standard across the board, which is considered a “highest common denominator” approach. 
   • This not only simplifies compliance but also demonstrates a proactive commitment to transparency. 

Additional Resources & Next Steps 

Compliance can be complex, but you don’t have to navigate it alone. 

Here are some next steps and resources to guide your team: 

• Read the full law and FAQs on the Colorado Department of Labor’s website. 
• Download OutSolve’s Ultimate Guide to State Pay Transparency Laws for a broader view across states. 
• Consult with a compliance expert, like OutSolve, to conduct a compensation audit or review your current practices. 
• Subscribe to HR legal alerts to stay up to date on any changes to the law.