Colorado recently passed Senate Bill 23-105, which amends Colorado’s Equal Pay for Equal Work Act. The law, signed by Governor Jared Polis, modifies pay transparency requirements for job listings and internal promotion opportunities. The Colorado Equal Pay Act amendments will come into force on January 1st, 2024.
In this article, we explore the background to the act and highlight some of the key changes to job opportunity posts and employee promotion requirements.
Colorado’s Equal Pay For Equal Work Act (EPEWA) came into force on January 1st, 2021, creating significant compliance requirements for all Colorado employers, even those with only one Colorado-based remote employee.
Key provisions included steps to close the gender pay gap, and prohibit pay discrimination based on sex or other protected status, including disability, race, creed, color, sex, religion, and age. With regard to job opportunity postings, employers were required to:
As employers navigated these complex rules, the Colorado Department of Labor and Employment (CDLE) provided further pay transparency guidance that clarified and offered further interpretation of its requirements. At the time, the legislation was the first of its kind. Pay transparency regulations have since expanded in states including California, New York, and Washington.
The goal of the Colorado Equal Pay Act was to prevent wage discrimination and close the gender pay gap, but its success is difficult to quantify.
The latest figures from the U.S. Bureau of Labor Statistics show that in 2021, women working full-time were paid 85.4 percent of the equivalent male weekly earnings. This compares to 78.1 percent in 2020, and 86.4 percent in 2019. Colorado ranks 15th out of 50 states and Washington DC, in narrowing its pay gap. The pay gap in Colorado has been measured since 1997 when the pay gap was over 23 percent.
The new legislation is intended to further increase pay equity in Colorado.
Key points for employers to note include the following:
Job opportunity postings
Under the amended law, employers must “make reasonable efforts to announce, post, or otherwise make known each job opportunity to all employees on the same calendar day,” and before the employer selects a candidate for the position. Job opportunity is defined as “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.”
“Job opportunity” postings must include:
Currently, employers are required to notify Colorado-based employees of promotional opportunities, regardless of the location of these roles, or whether Colorado employees are either qualified for or interested in these vacancies. Under the amended Equal Pay Act, the definition of promotion does not include “career development or career progression”, therefore, employers will no longer be required to provide notice of lockstep opportunities for promotion.
The amended Equal Pay Act offers some reprieve for employers,
Employee promotion requirements
In a significant step towards expanding job opportunities and workplace equality for all employees, the amendment requires employers to notify Colorado workers of all new hires and promoted employees who are selected through a competitive process. With effect from January 1st, 2024, employers must make “reasonable efforts” to “announce, post, or otherwise make known” the identity of the candidate selected for each job opportunity within 30 calendar days of their start date. At minimum, the following information must be provided to the employees with whom the candidate will work:
The amended Equal Pay Act also states that employers must not identify a selected candidate in a way that would violate their privacy rights or place their health or safety at risk.
Disclosure for career progression criteria
For each position with career progression, employers must disclose and make available to all “eligible employees” the requirements for career progression, together with the terms, compensation, benefits, full-time or part-time status, duties, and access to further advancement. Clarification is awaited on the definition of “eligible employees.”
“Career progression” is defined as a current employee’s “regular or automatic movement from one position to another based on time in a specific role or other objective metrics.”
Amendments to pay discrimination legislation
The amended Equal Pay Act also makes two key changes related to wage discrimination, emphasizing the stringent nature of the new legislation:
Pay equity in Colorado: Ensuring compliance
Colorado’s pay transparency regulations remain some of the most comprehensive equal pay laws in the US. The Amended Equal Pay Act is part of a series of bills signed by Colorado Governor Jared in May 2023, which also include:
The amended Equal Pay Act also reflects a broader trend toward achieving pay equity, including national pay transparency legislation.
To ensure compliance with Colorado’s Equal Pay Act and prepare for SB23-105, Colorado employers, and employers with Colorado-based remote workers, can adopt the following strategies:
Partner with a pay equity software provider who can help your organization to prepare for SB23-105 and implement pay equity across your compensation structures.
Speak to one of our pay equity experts today.
Italy’s gender pay gap of 8.7% has widened in recent years. The more stringent requirements…
The U.S. government is updating race categories for the first time in 27 years. Learn…
Finland has modest requirements for pay data reporting. Employers will have to adapt quickly to…
Germany has minimal requirements for pay data reporting. Employers will have to adapt quickly to…
As your workforce and your organization evolve, your pay equity situation evolves with it. Learn…
New York City’s enforcement agency is increasing its activity in regard to its pay transparency…