Last Updated on August 11, 2020 by bigfish-admin
Equal Pay for Equal Work Act – Colorado
Sweeping changes are coming soon to Colorado, for employers large and small! Effective January 1, 2021, Colorado’s Equal Pay for Equal Work Act will go into effect, when it does Colorado employers will be held financially accountable for sex-based pay discrimination. Colorado’s Equal Pay for Equal Work Act (SB19-085), prohibit all employers from discriminations because of sex (including gender identity) – alone or with another protected status – demonstrated by paying less for substantially similar work in terms of skill, effort, and responsibility. Every employer with any employees in the state of Colorado will have to comply with the law.
The act allows exceptions to the prohibition on wage differential, if the employer demonstrates wage differential is based on one of the following factors, so long as the employer applies factors reasonably and they account for the entire wage rate differential. Employees are protected against sex-based discrimination; however, the law permits pay differences arising from:
- A seniority system
- A merit system
- A system that measures earning by quantity or quality of production
- Geographic location work is performed
- Education, training or experience (to the extent they are reasonably related to the work in question)
- Travel (if regular and necessary aspect of the job)
Outside of these exceptions, companies that pay their employees inequitably can be financially responsible under the law for non-compliance. It is important to also note that employer cannot prevent employees from discussing their own compensation information with other employees. This law further prohibits employer’s asking about a candidate’s wage history, or relying on wage history to determine a wage rate. Any employer found in violation of this act is liable to the employee for back pay and other equitable damages, which could be up anywhere from $500 to $10,000 USD per violation.
This new law aims to increase pay equity and transparency, by imposing new notice and recordkeeping requirements and encouraging companies to regularly self-audit their compensation practices.
New notice requirements included in the bill will also help current and prospective employees to learn about new job opportunities:
- Employer’s will have to make a reasonable effort to ‘announce, post, or make known an opportunity for promotion’ to all current employees on the same calendar day.
- Each job posting will have to disclose; hourly wage or salary, hourly wage or salary range, along with a general description of all benefits and compensation offered.
- Employers are required to maintain records of job descriptions and wage rate history for each employee while employed and for 2 years after employment ends.
- Update Job Descriptions. Companies are required to keep records of job descriptions and wage history for all employees, for 2 years post separation. Take this opportunity to update job descriptions based on the new Equal Pay for Equal Work law.
- Adjust Recruiting. Take this opportunity to adjust the job postings templates and interview questions your organization uses; ensure they are aligned with new roles.
- Centralize Wage Decisions. Develop a well-defined compensation strategy and team, who will determine wages for new hires and promotions.
- Review Existing Compensation. Ensure that all existing compensation models and policies are equitable in light of this new law.
- Conduct Pay Equity Audit. Conduct an analysis to examine pay structure, uncover any discrepancies, and make any necessary changes. A pay equity audit can help you to demonstrate good faith, indicating the employer is actively taking steps to self-evaluate and correct existing pay disparities. Pay Equity Audits are best done by employment attorneys, since you may be able to take advantage of attorney-client privilege, but your HR professional on staff can also perform these for you.
- Communicate Changes. Communicate all upcoming changes to employees, letting them know of any changes to your existing policies or new policies.
Big Fish will continue to report on further developments with this law and other wage laws nationwide.