Colorado Legislature Passes Amendments to Equal Pay for Equal Work Act
May 17, 2023
By: Colin A. Walker
In 2019, the Colorado Legislature passed the Equal Pay for Equal Work Act (the Act), which went into effect January 1, 2021. The Act contained provisions regarding gender-based wage discrimination claims (paying employees of one gender more than employees of a different gender), pay “transparency” and “opportunities for advancement and promotion.” Soon thereafter, the Colorado Department of Labor and Employment (CDLE) enacted Equal Pay Transparency Rules (EPT Rules) which explained and expanded upon the transparency and opportunities provisions of the Act. Generally, the Act and the EPT Rules required employers to include in job postings the compensation to be paid for the position (or a range of compensation) and a description of the benefits. They also required employers to announce “promotional opportunities” to all existing employees, again including the compensation and a description of the benefits.
Following passage of the Act and issuance of the EPT Rules, employers and others expressed concerns about ambiguities and difficulties with compliance. One issue was whether a change in an employee’s position, which occurred automatically after a certain amount of time on the job or the occurrence of certain events (such as a certification), often with an increase in compensation, responsibility, or a title change (sometimes called a “promotion in seat”), was a promotional opportunity, which required an announcement. For example, an employer might automatically promote an engineer from an Engineer I to an Engineer II upon completion of 90 days of service, but without creating a new position and without filling a vacancy. Because, in this scenario, the employer is not hiring a new employee or filling a vacancy, there was confusion regarding whether an announcement was required. There was also confusion about whether the posting and promotional opportunities requirements applied to employers which were based outside of Colorado but had one or a few employees who worked remotely from Colorado.
In the 2023 Legislative Session, the Colorado Legislature passed House Bill 23-105, Ensure Equal Pay For Equal Work, which amends the Act in an attempt to address these concerns. The Governor is expected to sign it.
The bill provides that employers do not need to announce (with compensation and benefits information) “Career Development” and “Career Progression” (i.e., promotions in seat). The bill also amended the Act to provide that, through July 1, 2029,[1] employers based outside of Colorado, which have fewer than 15 remote workers in Colorado, only need to provide notice of remote job opportunities. These amendments provide welcome clarification and will ease the burden on employers.
However, the bill also adopted a number of amendments that increase the burden on employers. The bill increased the “lookback” period for wage discrimination claims from three years to six years. For example, if an employee proves such a claim, the employee can recover damages going back six years.[2]
The bill also adopted provisions requiring employers to announce information about a person who is promoted to a position which qualifies as a “promotional opportunity.” Within 30 days of the promotion, the employer must make reasonable efforts to announce to the employees with whom the employer intends the individual to work regularly the name of the promoted individual, the former job title, the new job title, and information on how other employees may demonstrate an interest in similar positions. However, the bill provides that the employer need not include information that would violate the individual’s right to privacy under applicable law.
As with many new laws, this one is a mixed bag. In some ways, it provides welcome clarification to employers and employees and eases the burden on employers. In other ways, it increases the burden and exposes employers to additional liability. Colorado employment law continues to become more and more complicated and Colorado employers need to work hard to make sure they are aware of new developments and are prepared to comply with them.
[1] Presumably, after July 29, 2029, such employers would have to make announcements as would any Colorado employer, though the legislature could extend the date or make this provision permanent.
[2] Note that this is not a statute of limitations, which would require a claimant to file a claim in court within a certain time period from the time that the claim accrued or lose the right to assert the claim. The statute of limitations under the Act remains two years. But, if the employee files a claim within two years, then the employee can recover damages for the previous six years.