On September 29, Colorado’s Department of Labor and Employment released its proposed Equal Pay Transparency (EPT) rules. The update is aimed at providing clarity on the state’s Ensure Equal Pay for Equal Work Act. SB23-105, which comes into effect on January 1, 2024, amends Colorado’s pay transparency statute.

A public hearing on the proposed rules is scheduled for October 30, 2023. If adopted, the Equal Pay Transparency rules will also take effect from January 1, 2024.

Summary of changes to Colorado’s Ensure Equal Pay for Equal Work Act

From January 1, 2024, job posting and promotional notice obligations for employers in Colorado change significantly, for instance:

  • Each job opportunity must be made known to employees on the same calendar day, and prior to candidate selection. 
  • Employees must be notified of the successful candidate’s identity within 30 calendar days of their start date. That applies to internal promotions and new hires. 
  • Employees must be informed how they may demonstrate interest in similar job opportunities in the future. 

Offering some reprieve, Equal Pay Transparency rules no longer require employers to provide notice of lockstep opportunities for promotion. Further, organizations based outside of Colorado with fewer than 15 Colorado-based workers must provide notice of remote job opportunities only. That’s through July 1, 2029. 

Colorado Department of Labor & Employment (CDLE) must also create and administer a process to investigate and mediate pay discrimination complaints. This directive must be implemented on or before July 1st, 2024.

Proposed EPT Rules

Colorado Department of Labor and Employment Equal Pay Transparency (EPT) Rules are intended to clarify ambiguities contained in SB23-105, namely:

Career Development: Career development is defined as 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.” 

Proposed EPT RULES state that such existing work or contributions must be part of the employee’s existing job, i.e., not within a position with a current or anticipated “vacancy.” 

The requirement to “announce, post, or otherwise make known” job opportunities does not apply to “career developments.”

Career Progression: Similarly, job opportunities do not include “career progressions.” Career progression is an employee’s “regular or automatic movement from one position to another based on time in a specific role or other objective metrics.” For such positions, employers must “disclose and make available to all eligible employees …the requirements for career progression.” That’s alongside providing compensation, benefits, full-time or part-time status, duties, and access to further advancement.

Eligible employees are defined as:

“those in the position that, when the requirements in the notice are satisfied, would move from their position to the other position listed in the notice as a ‘career progression.’”

Application Deadlines: SB23-105 requires employers to include the expected closing date for applications to job postings. Amendments to Colorado pay transparency statute include two exceptions to this. 

“(A) if there is no deadline because the employer accepts applications on an ongoing basis, the application must say so, and a deadline need not be included; and

(B) a deadline may be extended as long as (1) the original deadline was a good-faith expectation or estimate of what the deadline would be, and (2) the posting is promptly updated when the deadline is extended.”

Acting, Interim, or Temporary (“AINT”) Hires: Proposed EPT rules state that no immediate job opportunity posting is required to fill a position on an AINT basis where:

  1. The position requires immediate hire in an AINT role; 
  2. The AINT hiring is not expected to be permanent. If the position becomes permanent, the job opportunity posting must allow employees time to apply, and;
  3. The position was not held any time in the preceding 12 months by another AINT hire for which there was no job opportunity posting. 

The duration of an AINT role is also increased to nine months from six.  

Post-Selection Notice to Employees: As highlighted above, employers must notify their employees of the names of selected candidates. The Act provides clarity on who is advised, and how. For clarity, proposed EPT rules state that:

“Work with regularly” means employees who, as part of their job responsibilities, either (1) collaborate or communicate about their work at least monthly, or (2) have a reporting relationship.

Employers may opt to provide notice to a broader range of, or all of, their employees. 

Post-selection notices can be provided on an individual or multiple basis, provided they are issued no later than 30 days after any selection. 

Geographic Limits: Notice requirements for pre-selection, post-selection, and career progression do not apply to employees entirely outside of Colorado. Nor do compensation posting requirements if the jobs are performed entirely outside of Colorado or postings entirely outside Colorado.

Background to Colorado’s Ensure Equal Pay for Equal Work Act

Colorado pay transparency statute amendment is a statement of its ongoing commitment to close the state’s gender pay gap which stands at 14.6%. 

In 2021, its Equal Pay for Equal Work Act (EPEWA) was the first of its kind. But until recently, it has been isolated in its requirements for employers to notify employees of available “promotional opportunities.”

That changed in August 2023, when Illinois Governor Pritzker signed HB3129 into law. Internal promotion opportunities are now also included in Illinois’ pay transparency requirements, which take effect January 1, 2025. 

Both laws indicate an emerging HR trend of opportunity equity, focused on creating workplace equity. 

Globally, the EU’s Pay Transparency Directive also requires employers to disclose criteria used to determine pay ranges and career progression. EU member states must transpose the Directive into law by June 7, 2026. 

Ensure compliance with Equal Pay Transparency legislation

As EPT rules provide clarification on SB23-105, it is probable they will be adopted at the October 30 hearing. Employers affected by amendments to Colorado pay transparency statute can take proactive steps to comply:

Implement a discipline of pay equity reporting: Carrying out an intersectional pay equity audit is always the first step and the only way to identify existing pay disparities. Trusaic Payparity conducts an audit at the intersection of factors such as gender, race/ethnicity, age, disability, and more. 

Review the impact of proposed EPT rules on your organization. Include a review of job postings to ensure compliance, for instance, meeting requirements on deadlines and notifying employees. 

Create explainable, equitable and competitive salary ranges. Trusaic Salary Range Finder® determines competitive and fair salary ranges by overlaying internal pay equity audit data with that of external labor market data.

Update internal promotion and hiring processes: Sharing promotion policies builds employeetrust and provides clarity around opportunities for career advancement. Providing HR teams with clear criteria and processes helps to ensure compliance when legislation comes into effect.