Despite challenges from the business community Colorado’s Pay Transparency Law remains in effect

On January 1, 2021, the Colorado’s Equal Pay for Equal Work Act went into effect. The Act is aimed at closing the pay gap among employees and requires employers, with operations or employees working in the state, to issue compensation ranges for all job positions, including internal promotions. Employers failing to follow the requirements are subject to civil fines up to $10,000.

In December 2020, the Rocky Mountain Association of Recruiters filed a lawsuit claiming that the law’s pay transparency requirements were unconstitutional and unduly burdened employers. The Association also argued the pay transparency regulations conflicted with the laws of other states and therefore burdened interstate commerce. The judge disagreed and determined that the plaintiff failed to show any undue burden on employers and determined that the law if “reasonably related to the state’s public interest in reducing the gender-based wage gap.”

OutSolve’s Take

Colorado’s Equal Pay for Equal Work Act includes a wide variety of actions employers must take. As noted above, employers must state compensation rates or ranges for all job positions. In addition, prior pay cannot be used to establish pay rates, nor can employees be punished for discussing pay rates. All employees, including those who are out-of-state, must be notified of promotion opportunities.

Pay equity will be a focus for the Biden Administration in the coming year and beyond. The Colorado Act went into effect January 1, 2021, and has now resisted subsequent challenge. These laws are here to stay.

For clients who wish to take preventive measures to evaluate their pay practices, OutSolve’s Pay Equity Analysis Services are available. Additional information on OutSolve’s Pay Equity Analysis or other compliance services may be obtained at info@outsolve.com or by calling 888-414-2410.