Pay equity, diversity and inclusion
New Colorado Equal Pay Rules Proposed
3 minute read
Earlier this year, Trusaic highlighted Colorado’s aggressive new equal pay law set to take effect on January 1, 2021, the Equal Pay for Equal Work Act (“EPEWA”). Now, we have recently released proposed rules from Colorado’s Department of Labor and Employment, providing employers much needed guidance concerning EPEWA compliance. This post specifically focuses on Rule 4 of the new guidance, which concerns employers’ job posting requirements.
To recap, EPEWA, which applies to all Colorado employers, prohibits wage discrimination on the basis of sex, including gender identity and non-binary identity. Discrimination on the basis of “sex plus” another protected status, such as disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry, is also prohibited. EPEWA protects employees who perform “substantially similar work”, defined as a composite of skill, effort (including shift differentials), and responsibility, regardless of job titles. EPEWA also includes a safe harbor for employers that conduct proactive pay equity audits, a comprehensive salary history ban, and a stringent job posting mandate, among other requirements.
On September 29, 2020, Colorado’s Department of Labor and Employment released its “Equal Pay Transparency Rules”, which are proposed regulations under EPEWA. According to an article in the National Law Review, the proposed guidance is in the notice and comment phase of rule making but is ultimately expected to be adopted ahead of EPEWA’s effective date. Substantively, the guidance is divided into four “Rules”: 1) Statement of Purpose, Authority and Construction, 2) Definitions, 3) Complaint, Investigation, and Appeal Procedures, and 4) Job Posting requirements. The first two Rules are straightforward: Rule 1 outlines the purpose and scope of the Equal Pay Transparency Rules, and Rule 2 defines key terms. Rule 3 addresses how alleged EPEWA violations are initiated, investigated, and resolved.
Rule 4, “Job Posting Requirements” may surprise Colorado employers based on its depth and breadth. For one thing, under the EPEWA, employers must make reasonable efforts to post all job openings and promotion opportunities to all current employees on the same day and prior to making a decision. Rule 4 of the Equal Pay Transparency Rules provides that if a Colorado employer accepts applicants from outside the state, it must notify all employees in any state for whom the job would be a promotion. Such notifications must also include compensation (e.g., hourly pay or salary range) and benefits data for the relevant position. In this way, many Colorado employers may have significant multi-jurisdictional compliance obligations starting January 1. The state can impose fines of $500 to $10,000 per posting violation.
To put this in concrete terms, consider a company, “ACME, Inc.”, based in Denver, but with satellite offices in Austin, Fort Lauderdale, and Chicago. If ACME wants to hire a new Chief Marketing Officer, based at headquarters, it must notify all of its employees in Colorado, Texas, Florida, and Illinois for whom the CMO position would be a promotion. Such notices would have to include pay and benefits data. But Rule 4 goes even further. It clarifies that for Colorado employers with open jobs outside of the state, notice (including compensation and benefits data) must be provided to all Colorado employees for whom the open job would be a promotion. This is also true for open remote jobs.
Employers should continue to monitor the Equal Pay Transparency rules ahead of the EPEWA effective data. Perhaps more urgently, employers should consider taking advantage of the EPEWA safe harbor. Experts across the human capital, legal services, and business intelligence industries recommend a pay equity audit as a critical tool in an employer’s risk management tool belt. A pay equity audit provides actionable intelligence to be proactive in addressing internal inequities with respect to DEI&A.
Not sure how to get started? Let Trusaic provide your organization with a free Pay Gap Assessment, which can be conducted confidentially and includes monthly DEI&A analytics.
Organizations that conduct a pay equity audit must communicate their progress and achievement along the way. To help you faciliate discussions around compensation, we created the Pay Equity Communications Planner.