WORKSPAN DAILY |
Colorado Steps Up the Push for Pay Transparency
hyejin kang / iStock
Many
employers outside of Colorado might not have noticed, but the Centennial State
has taken a bold step toward achieving impartial and transparent pay practices.
On
Jan. 1 of this year, Colorado’s Equal Pay for Equal Work Act [EPEWA] went into effect.
Aimed
at prohibiting gender-based pay discrimination and imposing more stringent requirements
concerning pay transparency, the Act is “one of the
toughest enhanced state pay equity laws to date,” and makes
Colorado the 10th state to pass an equal pay law that is “more
demanding than federal law.”
The
Act obliges Colorado employers to provide formal notice to Colorado employees
of promotional opportunities and to disclose pay rates or ranges in job
postings for positions that will be or could be based in Colorado, including
remote opportunities.
The
requirement that all job postings include a compensation and benefits range,
and the Act’s strict overall approach to pay transparency are unique, said Tauseef
Rahman, partner in Mercer’s career business.
“[Colorado’s
Equal Pay for Equal Work Act] goes further than the legislation in
California,
which entitles applicants to request and receive the pay range for a pay
position in which they’re applying for,” said Rahman.
Employers
in other states will need to consider the effects of what being transparent
about pay ranges in one state will mean for employees in other locations, he
added.
“For
example, if I’m an employee in Nevada talking to a colleague in Colorado who
knows the pay range for that colleague’s position, I may then ask, ‘What about
the pay range for my position?’ ”
The
new law also has implications for employers based outside of Colorado, as it
applies to not just organizations based there, but to any and all entities with
at least one employee in the state, including public bodies, schools and
private individuals.
These
companies need to be aware of EPEWA’s transparency requirements, said David
Zwisler, an attorney and shareholder in the Denver office of Ogletree Deakins.
The
Act defines promotional opportunities “very broadly, and can include new hires
and internal advancements, including in-line promotions,” he said.
“Further,
if the work associated with the promotional opportunity is located in Colorado
or the work could be done in Colorado, the employer must give notice to the
Colorado employees of the wage or wage range and benefits associated with the
position.”
Zwisler
notes that employers posting externally for any role based in Colorado (or that
could be performed in Colorado) must include the same wage and benefits
information. Neglecting to do so could be costly.
“The
Colorado Department of Labor and Employment has taken the position that all
remote work opportunities that are performable in any location are covered by
the EPEWA, and the disclosure obligations apply. The failure to include the
required information is a violation of the law,” he said. “Penalties can range
from $500 to $10,000 per violation.”
Other
states might ultimately adopt similar legislation designed to prevent and
remediate pay inequities, “but the way they may go about it could vary,” said
Rahman.
“States
like Colorado have taken an approach of pushing for transparency in pay ranges.
Other states have banned asking about prior salary, or they have legislated
that prior salary is not a justification for inequitably lower wages.”
Rahman’s
advice to employers is to “think beyond compliance, and to think about intent
and the employee and candidate experience,” he said. “Ask yourself: Would you
work for an organization that only did the bare minimum, even if they could
culturally and monetarily do more?”
About the Author
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Mark
McGraw is the managing
editor of Workspan.