July 27, 2023
In 2019, Colorado passed the Equal Pay for Equal Work Act. However, it did not take effect until January 1, 2021. This Act had several provisions covering pay transparency, gender-based wage discrimination claims, and advancement and promotion opportunities.
After this, the Colorado Department of Labor and Employment (CDLE) implemented the Equal Pay Transparency Rules (EPT Rules). These Rules provided additional details about the provisions concerning transparency and opportunity in the Equal Pay for Equal Work Act. They also expanded on the requirements.
Expanded Requirements
The Act and the EPT Rules typically require employers to list the compensation for a position and the benefits in any job postings. Employers must also announce the opportunities for promotion to all current employees, as required by the Equal Pay for Equal Work Act and the Equal Pay Transparency Rules. Finally, the employer must inform the employees about the compensation and benefits of the position.
Once the Equal Pay for Equal Work Act and the EPT Rules passed, employers and some individuals voiced concerns about the challenges associated with compliance. Such complaints included the Bill’s vagueness and the confusion about whether an automatic change in an employee’s position necessitates an announcement.
These employers cited examples such as changes after working a job for a specific amount of time, events that come with additional compensation, changes in titles, and increased responsibilities from promotional opportunities. Others admitted confusion about whether employers not based in Colorado had to comply with the requirements. In such cases, they wondered if the announcement requirements applied to the few employees who worked remotely from Colorado.
As a result, Colorado’s legislation decided to address these concerns through House Bill 23-105. This Bill would amend the Equal Pay for Equal Work Act, which the Colorado Legislature recently passed. It currently waits on the governor’s signature.
How It Affects Employers
According to HB 23-105, employers do not have to announce Career Progression or Career Development. The Bill also addressed the concerns about employers not based in Colorado. In addition, those with fewer than 15 employees working remotely from the state must announce remote jobs through July 1, 2029. These amendments will clarify the Act, thus making compliance easier.
However, some amendments have increased requirements for employers, such as the lookback period for wage discrimination claims. The current period is three years, but passing the Bill would increase it to six. This change would allow employees who prove a wage discrimination claim to recover damages for up to six years in the past.
The new Bill would also require employers to provide information about promoted individuals if the position qualifies as a promotional opportunity. Employers must do this within 30 days of the employee’s promotion. The employer must also reasonably attempt to post or announce the employee’s advancement. This announcement includes the former and new job titles and how individuals interested in promotions may demonstrate their interest in similar jobs. However, the Bill does not require employers to share information that would violate the promoted employee’s privacy rights.
With many expecting House Bill 23-105 to pass, employers should consider reviewing their hiring and promotion policies. Working with a reputable background check company is one way to help identify necessary adjustments or updates. The right partner will provide their screening expertise and ensure compliance with the new law.