There is a popular country & western song by Keith Urban entitled, “Blue Ain’t Your Color.” However, as the political landscape in Colorado has changed over the past two decades it’s become increasingly clear that blue is the color of our state, as the Democratic Party now holds the governorship, both U.S. senator seats and a majority of both houses in the state legislature.
Colorado’s blue wave has led to the passage of a number of employment laws championed by the Democratic Party, labor unions, and worker advocates. Some of these laws have left employers feeling blue, especially small employers for whom the compliance burden hits hardest. However, employers should not despair because experience has shown that you can follow the law and still run your business or not-for-profit successfully, provided you have access to outstanding HR and legal advice.
In today’s installment of “Portrait in Blue” we review one of the new laws, the Equal Pay for Equal Work Act (EPEW), effective January 1, 2021
When Governor Polis signed this law in 2019, I published a piece on HR Headaches entitled “In Pay May All Be Created Equal,” providing an overview of the EPEW Act. Since then, we have learned much more, as the Colorado Department of Labor and Employment (CDLE) has issued Administrative Rules and an INFO sheet about this new law. And now, having lived with the EPEW Act for nearly three months, its specific requirements and what they mean in the real world of HR are all coming into sharper focus.
Broadly speaking, the EPEW Act prohibits employers from paying people of one sex more than people of another sex for substantially the same work. This is an undeniably laudable goal, though disparate pay based on sex is already unlawful under federal and state law. The EPEW Act includes some exceptions (seniority system, merit system, a system that measures the quantity of production, geography, education/training/experience, or travel requirements). Notably absent from the list is a catch-all, like “any factor other than sex.” This appears to mean that if a pay disparity between a woman and man is not explainable by reference to one of the listed exceptions, the employer may be violating the law.
The EPEW, however, does much more than just outlaw pays discrimination based on sex. Its more controversial provisions require employers to include wage rate or salary in all job postings, along with general information about benefits and other compensation, like commissions and bonuses, and also to “make reasonable efforts” to inform all employees of available promotions on the same calendar day.
The pay disclosure rule has caused employers especially great consternation, not because they want to deny this information to legitimate job applicants, but because they want to keep it from competitors, who could use it in a variety of ways to gain a competitive advantage. Yet, as much as this rule has caused angst for employers, it does offer a degree of flexibility. For example, an employer can post a salary range for a position but ultimately pay the successful candidate a salary outside the range as long as the posted range, at the time of the posting, was what the employer genuinely believed it would be willing to pay for the job.
The requirement to post salary information for all jobs raises a legitimate question about jurisdiction and whether the EPEW Act can actually regulate remote jobs that could potentially be performed entirely outside Colorado. The CDLE steadfastly believes that it can regulate such jobs if the employer in question has any employees in Colorado. Here’s what CDLE says about out-of-state and remote jobs (INFO #9): “Multi-state employers need not include compensation or benefits in notices to Colorado employees for positions outside of Colorado, but must notify Colorado employees of such promotional opportunities. As with job postings generally, remote jobs do not qualify for this exclusion; promotional opportunity notices for such jobs must include compensation and benefits.”
The promotion rule has also caused angst for employers. This rule is intended to level the playing field for promotions and curtail practices that give favored employees, historically men rather than women, the inside track to promotions. This is a worthy goal, but the new rule raises a host of unanswered questions. These include “what is a promotion?” and “do inline promotions such as a routine progression from machine operator 1 to machine operator 2, or nurse 1 to nurse 2 count as promotions?” And, “are opportunities that involve a title change or a change in duties at the same pay promotions?”
The EPEW Act also contains a number of less-groundbreaking requirements, such as prohibiting employers from seeking a candidate’s pay history and from considering pay history when deciding on starting pay (Colorado joins a number of state and local governments that have passed salary history bans). The EPEW Act also prohibits employers from having rules that prevent employees from discussing their pay (federal labor law, which applies to most private-sector employers of any size, already prohibits rules like this).
It is true that the EPEW changes the compliance landscape for Colorado employers and presents a number of challenges for HR professionals. But the passage of the EPEW should not be a reason for Colorado employers to sing the blues. Ask anyone in HR, and they will tell you that challenges ARE opportunities, and this new law is no different. With imaginative but compliance-focused HR and legal guidance, you can follow the law without an excessive burden and still ensure that your corporation or not-for-profit is finding and keeping the best talent. It can be done!