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
Mark McGraw is the managing editor of Workspan.