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Colorado’s Equal Pay for
Equal Work Act (EPEWA) went into effect on Jan. 1 of this year, it was
supposed to be a bold step toward achieving greater pay transparency.
The legislation was aimed at prohibiting gender-based pay discrimination and making pay practices more transparent. How? By requiring Colorado employers to disclose pay rates or ranges in job postings for positions that will be or could be based in Colorado, including remote opportunities.
Labor and employment law firm Jackson Lewis described EPEWA as “one of the toughest enhanced state pay equity laws to date.” Tauseef Rahman, partner in Mercer’s career business, pointed out to Workspan that the Act “went further” than California’s similar pay transparency laws, and described EPEWA’s strict approach to pay equity as unique.
But, with the addition of just a few words to remote job postings, some companies are already finding ways around the legislation’s pay transparency mandate.
The Atlantic’s Saahil Desai recently explained just how they’re doing it.
“Squint at the fine print on remote-job listings lately and you might see something like this, for a senior sales manager at Samsung: ‘This role can be performed remotely anywhere in the United States with the exception of Colorado.’
“Or like this, for a job at Johnson & Johnson: ‘Work location is flexible if approved by the Company except that the position may not be performed remotely from Colorado.’”
Scores of companies have adopted similar language in recent job postings, wrote Desai, who found more than 700 job listings that included the phrase “except Colorado” on the online job board indeed.com.
(Denver-based software engineer Aaron Batilo went so far as to create a website, www.coloradoexcluded.com, that calls out companies dodging EPEWA’s pay transparency requirements, and includes more than 400 job listings that exclude Colorado-based candidates.)
Colorado State Senator Jessie Danielson co-sponsored the Equal Pay for Equal Work Act. She pulled no punches when The Atlantic asked for her thoughts on employers’ tactics to avoid including salary information in their job postings.
“What these companies are doing is shameful. These bad-actor companies are working very, very hard to continue to underpay women,” she told Desai, who noted that Danielson referred to companies posting such job listings as “bad actors” at least six times during their interview.
Optics aside, navigating requirements like those included in the Equal Pay for Equal Work Act is “not always as simple as the legislature may think and commentators seem to suggest it should be,” said Christopher Patrick, a principal in the Denver office of Jackson Lewis.
“Colorado’s equal pay transparency rules moved quickly. The Colorado Department of Labor and Employment (CDLE) published them in November 2020,” said Patrick, whose practice focuses on equal employment opportunity including proactive pay equity analyses. “And [the CDLE’s] initial guidance lacked clarity on disclosure obligations for remote work.”
More specifically, he said, remote jobs fall into three categories: roles for which the employer knows the successful applicant will perform the work in Colorado, jobs the employer knows will be performed elsewhere and positions for which the employer might not know (or care) where the work is performed.
“Postings for the first and third categories of remote roles clearly require pay and benefit disclosure under the rules,” said Patrick. “As to the second category, the CDLE’s initial guidance includes conflicting provisions.”
In July 2021, however, the CDLE issued new guidance “that makes clear that employers must include pay and benefits in job postings for all remote roles, no matter where the employee may ultimately perform the work,” he said. “With that background, employers may not want to hire for a specific job in a specific state for any number of reasons.”
For example, simply taking down job postings for hundreds of open remote positions might not be feasible for business reasons, added Patrick.
“So, some employers have excluded Colorado applicants at first, while they work through the administrative burdens of determining the anticipated pay range for each opening, which may be more narrow than the full range for the role. Once they determine these ranges, they plan to include them in their remote job postings. This approach was in line with the pre-July 21 official guidance.”
Or, in some cases, the employer might know that the job will not be carried out in Colorado.
“Not every remote role can truly be performed from anywhere,” said Patrick.
For example, a primarily remote regional sales position might need to be based in a specific set of states, or a customer service representative might need to operate in a certain time zone to accommodate a business need.
“Some employers with these roles have tried to comply with [EPEWA with] as small a change to current practices as possible. Excluding Colorado work did just that, before July 21 [of this year].”
Other organizations might be concerned with messaging on pay to applicants in other markets, added Patrick.
“Many employers use a compensation system that applies market-based differences. So, a pay range in Colorado may be less than the range for the same remote role from the Bay Area. Disclosing the Colorado range may discourage the Bay Area applicant from applying, [which means the company] risks losing qualified talent.”
On the other hand, the compensation range for Colorado candidates could be much higher than in other markets. Sharing the Colorado range might set unreasonably high salary expectations for applicants in other locations, said Patrick.
“Some employers might balance these interests and decide that the easiest way to both comply and reduce friction for the talent acquisition function is to exclude Colorado applicants.”
All that said, choosing to word job listings in a way that discounts certain candidates still carries risks.
For example, employers that fail to include pay and benefits disclosures in a job posting for a remote position risk a violation, with each infringement including a financial penalty anywhere between $500 and $10,000.
Thus far, though, the CDLE has offered to waive all fines if employers quickly comply, Patrick noted, adding that “I don’t know how long this will be its approach.”
Ultimately, the CDLE’s current interpretation of employers’ pay transparency obligations “may go too far,” he said. “An employer ready to challenge the current interpretation may well prevail, but I find it unlikely that many employers are willing to endure the optics of challenging the pay equity law.”
About the Author
Mark McGraw is the managing editor of Workspan.