Over the last few years, employers across the United States have become accustomed to dealing with a patchwork of state pay equity requirements, including some that give employees the right to request and openly discuss and disclose their wages. A handful of states and municipalities have gone farther, enacting pay transparency schemes under which employers must affirmatively disclose the pay ranges for a position. States that impose some kind of pay transparency requirement include California, Colorado, Connecticut, Maryland, Nevada, Rhode Island, Washington. These states, and others, have recently adopted new or revised pay equity statutes imposing additional requirements upon employers.
Of these states, Colorado’s law poses unique challenges for employers operating in a virtual workplace. Colorado requires that employers publish compensation and benefits information about positions located in or could be performed remotely from Colorado at the time of the job posting. The Colorado law also requires employers to inform their Colorado-based employees of promotional opportunities. As noted, these requirements apply to virtual jobs for covered employers—as a result, employers covered by the Colorado statute should review their postings not only for positions in Colorado but for positions that can be remote or virtual in nature.
Colorado law requires covered employers to disclose the compensation range and benefits for positions when advertising or posting for applicants for those positions. A covered employer under the Colorado statute is any employer with at least one employee in Colorado. Covered employers must post the compensation range and a general description of all employment benefits in postings for a covered position. The employer does not need to post a specific salary; a range is sufficient to comply with the statute. Moreover, the employer can pay more or less than the range, as long as it honestly intends to pay within the range at the time of the posting. Furthermore, the employer may satisfy the benefits posting requirement by including a link to a site that describes the benefits available for the position at issue. All positions in Colorado are covered. However, jobs performed entirely outside of Colorado (which includes non-Colorado jobs that may include modest travel to Colorado) are not covered, even if the job posting is in or reaches Colorado. Similarly, employers need not disclose compensation in job postings made entirely outside of Colorado. So, for example, compensation and benefits need not be included in a printed advertisement or posting in another state but must be included in an online posting that is accessible by Colorado residents.
In 2021’s virtual environment, employers seeking to comply with the statute are confronted with the question of what constitutes a position ”in” Colorado. If a position is open to employees from across the United States and can be worked in a virtual or remote fashion, that position could be filled by someone from Colorado. The Colorado Department of Labor and Employment recently issued Interpretative Notice and Formal Opinion No. 9, which provides guidance regarding the application of the Colorado Equal Pay for Equal Work Act in a remote or virtual setting. The Department takes the stance that if a position may be filled by someone working in Colorado in a virtual or remote fashion, the employer must post the compensation range and benefits information for that position. This means nearly all positions that could be filled by an employee working in a virtual or remote fashion are now covered by the statute – even if there is very little chance they will be filled by Colorado applicants.
After Colorado adopted these new requirements, a number of employers responded by reworking their job postings for remote positions to say that applicants, if hired, could work remotely from anywhere other than Colorado. The Department responded quickly, reiterating that if there was just one person living in Colorado and working for the company at the time of the job posting (bringing the employer within the law’s coverage), the salary range had to be included in any job posting for a position that could be performed remotely from Colorado, regardless of whatever preference the employer might express as to what state applicants could, or could not, be from. In the Department’s view, “Excluding Coloradans from a remote job is not a description of where work is performable, it is a preference among applicants — and labor law requirements are mandatory, not optional based on employer preference.” The Department also suggested that if employers did not cease the “illegal practice” of excluding Coloradans from remote jobs, they would be subject to investigations, cease-and-desist orders, and fines.
As employers begin to allow more positions to be filled in a virtual or remote fashion, employers with even one employee in Colorado need to ensure that any position that could be filled by a remote employee complies with the Colorado pay transparency requirement. Employers should consider conducting an audit of their posting practices to assess which positions may be covered by the law and work to bring postings for positions that are located in Colorado or that are remote and could be performed in Colorado into compliance with that state’s pay transparency requirements.