Act includes provisions for pay equity, pay history, pay transparency and job posting
On January 1, 2021, Colorado’s Equal Pay for Equal Work Act (SB 19-085) goes into effect. Identified as one of the toughest state pay equity laws to date, it includes provisions on pay equity, pay history and pay transparency, along with the following two job posting requirements.
- Employers must make reasonable efforts to announce, post, or make known all opportunities for promotion to all current employees on the same calendar day.
- Employers must disclose in each posting for each job opening the hourly or salary comparison, or the range of the hourly or salary compensation, and a general description of all benefits and other compensation offered.
The Act covers discrimination due to sex (including gender identity) or sex in combination with another protected status. The law states that employers may not pay an employee of one sex less than an employee of another sex for substantially similar work. However, employers may use as a defense one of the following reasons for the pay difference:
- A seniority system,
- A merit system,
- A system that measures earning by quantity or quality of production,
- The geographic location where the work is being performed,
- Education, experience or training if they are reasonably related to the work, or
- Travel, if it is necessary to perform the work.
Employers in Colorado cannot (1) seek the wage history of a prospective employee, (2) rely on the wage history of a job applicant to determine a wage rate, or (3) discriminate or retaliate against a job applicant for failing to disclose a wage history.
Employers cannot stop their employees from discussing compensation information with others, or require an employee to sign a waiver that prohibits his or her ability to do the same.
The law creates a private right of action for employees and allows for the recovery of up to three years of back pay and liquidated damages in the amount of the back pay, unless the employer can show the “act or omission giving rise” to the pay violations was made in good faith.
On December 18, 2020, the Colorado Department of Labor and Employment (CDLE) issued Interpretive & Formal Opinion (INFO) #9 titled “Transparency in Pay and Opportunities for Promotion and Advancement.” The new guidance clarifies that a “promotion opportunity” exists “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties, or access to further advancement.” This may occur when an employer adds a position or gives an existing employee a new position which includes a title change. It may also include a lateral job change or a promotion.
The INFO confirms that multi-state employers do not need to include compensation or benefits in notices to Colorado employees for positions outside of the state; however, they must notify Colorado employees of promotional opportunities.