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Colorado Equal Pay Amendments Increase Burden of Pay Transparency Obligations

As we previously reported here, in 2019 Colorado passed a pay transparency law requiring employers to (1) disclose in their job postings the pay ranges and benefits for their Colorado jobs, and (2) make information about promotional opportunities known to their Colorado employees. Subsequent agency guidance, discussed here, clarified how the requirements of Colorado’s Equal Pay for Equal Work Act (“the Act”) apply to remote jobs.

Under current law, employers are required to disclose—in every notification of a job or promotional opportunity in Colorado—the hourly or salary compensation or range and a general description of the benefits and other compensation associated with the opportunity.

Recently enacted amendments, effective January 1, 2024, will make compliance with the Act’s requirements even more onerous, including by requiring employers to notify the team of employees with whom each new hire or promotion will work of the identity of the successful candidate, as well as how they can express interest in similar opportunities in the future.

As noted, the amendments impose new, administratively burdensome transparency requirements regarding the candidates selected for each job opportunity. In particular, employers will be required to announce, post, or otherwise make the following information known to all employees with whom the employer intends a selected candidate to regularly work: (1) the name of the candidate selected for the opportunity; (2) the selected candidate’s former job title, if selected while already employed by the employer; (3) the selected candidate’s new job title; and (4) information on how employees may express interest in similar opportunities in the future, including identifying individuals or departments to whom they can express their interest. This notice must be provided to employees within thirty calendar days after the selected candidate begins working in the position.

The amendments do offer some, limited relief to employers. First, the amendments make clear that if an employer is located outside of Colorado and has fewer than fifteen employees working in Colorado, and all of them work remotely, then through July 1, 2029, the employer is required to provide those (remote) Colorado employees with notice of remote job opportunities only.

Second, the Act’s implementing regulations had previously defined the promotional opportunities for which internal notice is required to include in-line or progression promotions. The amendments eliminate that requirement by redefining “job opportunity” to mean where the employer has a current or anticipated “vacancy” for which it is considering a candidate(s), interviewing a candidate(s), or for which the employer externally posts. Thus, opportunities for which internal notice is required no longer include “career development”—meaning changes in terms of compensation, benefits, full-time/part-time status, duties, or changes in title or compensation reflecting past performance—or “career progression”—meaning movement from one position to another based on time in a specific role or other objective metrics, from the posting requirement.

At the same time, the amendments require that where a posted position has a “career progression,” employers must disclose and make available to all “eligible employees” (a term which the law does not define) the requirements for career progression, in addition to each position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement. The law defines “career progression” as “a regular or automatic movement from one position to another based on time in a specific role or other objective metrics.”

In addition, with the amendments, employers will also be required to include in all notifications the date the application window is anticipated to close.

Finally, the amendments make changes to the Act’s pay discrimination provisions. First, they extend the look-back period for pay discrimination claims from three years to six years, meaning a plaintiff who establishes a claim of gender-based pay discrimination may recover up to six years’ back pay.

Second, while the Act previously authorized the Director of the Colorado’s Division of Labor Standards and Statistics to create and administer a process to accept and mediate pay discrimination complaints, the amendments mandate that the Director do so. And they also require the Director to investigate complaints and order compliance and relief upon finding a violation of the law’s wage discrimination provisions, as well as to promulgate rules for enforcement.

In the face of these amendments, Employers with employees in Colorado should begin reviewing their job posting and internal promotion notification practices now and take steps to modify them before the amendments’ January 1, 2024 effective date.

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