Colorado Proposes New Equal Pay Transparency Rules

FULL ALERT

Under Colorado’s Equal Pay for Equal Work Act (EPEWA), Colorado employers must make reasonable efforts to announce or post “promotional opportunities” to all employees on the same day. Further, a job posting must include the hourly or salary compensation for the job, and a general description of the other compensation or benefits that are offered. “Compensation” includes bonuses, commissions, and other forms of compensation. In the end, employers may pay more or less than the originally posted salary range, so long as the employer made a “good-faith and reasonable estimate of the range” when it drafted the posting.

This language led to the Colorado Department of Labor’s newly proposed Equal Pay Transparency Rules. The rules still do not clarify what a “promotional opportunity” is, so it appears that job postings for positions that are not considered advancements would not be required. Otherwise, these rules detail the job posting requirements:

• The promotional opportunity posting must be in writing and must include the job title, compensation, benefits, and means by which employees may apply for the position.
• When posting or announcing the promotional opportunity, the employer must use the employer’s regular and customary method of communication with its employees. For anyone who cannot be reached in that method, the employer must use an effective alternative method to notify those employees.
• If an employer posts a promotional opportunity rather than communicate the opportunity individually, the posting must be displayed in each establishment where employees work and in a conspicuous location frequented by employees where it may be easily read during the workday.
• Although promotional opportunities must be published for everyone, regardless of their qualifications, the employer “may state that applications are open to only those with certain qualifications.”

Significantly, the rules explain that the job posting requirements differ depending on whether the job is to be performed in Colorado, outside of Colorado, or remotely. Specifically:

• If an employer has at least one Colorado employee, has a job to be performed in Colorado, and accepts applicants from outside Colorado, it must notify every employee in any state for whom the job would be a promotion.
• If an employer has at least one Colorado employee, has a job to be performed outside Colorado, and accepts applicants from locales at least as distant as Colorado, it must notify all Colorado employees for whom the job would be a promotion.
• If an employer has at least one Colorado employee and the job could be performed from anywhere, the employer must notify every Colorado employee for whom the job would be a promotion.

These provisions are controversial and potentially unenforceable, because they require that multistate employers with just one Colorado employee must meet the posting and equal pay transparency requirements for every position across the country for which a Colorado employee might apply. This raises the practical (and potentially legal) question of whether the Colorado Department of Labor can police employer conduct in other states merely based on the fact that a job posting is accessible to a Colorado resident and a Colorado resident could apply.

Attorneys in Ballard Spahr’s Labor and Employment Group regularly assist organizations with pay equity and discrimination issues, including training and audits of compensation policies and procedures.

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