What’s going on in Colorado? Sitting here in my New York office, over the past few weeks I have received an unusual surge in requests for a relatively new Colorado employment law, the Equal Pay for Equal Work Act (EPEWA). The queries are not coming from Colorado-based employers who have an office or facility in Colorado, or even an employee working in Colorado, but rather from employers unrelated to Colorado, except that they STRENGTH hire someone to work remotely from Colorado.
This development is likely due to an unusual confluence of circumstances, including: (i) the continued and proactive legislative push for laws designed to eradicate unfair pay practices that are discriminatory on an illegal basis (e.g. gender or race) , (ii) advancing technologies that make remote working more efficient, and (iii) evolving workplace designs, suddenly accelerated by COVID-19, where workers can do their work remotely from anywhere. where outside of an employer’s office or facilities and in jurisdictions where the employer may have no presence otherwise, including Colorado.
There is nothing new about state legislatures taking steps to fine-tune their equal pay laws to promote and ensure pay equity in the workplace. In recent years, this has happened across the country, including New York City. These improvements have often included prohibiting employers from interviewing applicants about their salary history or extending gender-based protections to other protected categories (e.g. race, age, sexual orientation, etc. .).
Colorado’s EPEWA is certainly part of this evolution, but it presents something entirely different and new by requiring employers to:
(i) disclose in each job posting âhourly or salary compensation, or a range of hourly or salary compensationâ, as well as the benefits that accompany the employment, and
(ii) inform current employees of any vacancies that could be considered as an opportunity for promotion before the position is filled.
Indeed, no other state has ever asked employers to include information about pay rates in their job postings. Generally speaking, employers consider and treat compensation information as confidential for strategic reasons and objectives. The way an employer pays its employees is often seen as an important and exclusive aspect of how it competes to attract talent to the market, and a competitive advantage can be gained by keeping this information confidential and away from competitors. .
The vast reach of EPEWA has only compounded the discomfort, if not the difficulty, for employers, especially those outside of Colorado. The compensation disclosure requirement applies not only to job postings in Colorado, but also to any remote job posting that could be played in Colorado. Therefore, for example, the New York employer who is open to filling positions with remote workers (possibly even more so due to the COVID-19 pandemic) must now consider EPEWA and disclose compensation information in any job posting if the position could be filled by a candidate in Colorado.
Employers’ efforts to avoid EPEWA were immediate. In fact, before the law came into effect, the Rocky Mountain Association of Recruiters (RMAR) sued the Colorado Department of Labor and Employment in Colorado federal court, seeking to ban the publication requirements of employment for constitutional reasons. Among other things, RMAR claimed that the display requirements created an undue burden on interstate commerce and conflicted with similar statutory regimes in other states. In late May, the court issued an order dismissing the preliminary injunction request, and EPEWA’s posting requirements remain in place.
Undeterred, some multi-jurisdictional employers have simply decided to make Colorado workers ineligible for posted jobs, that is to say, if the work was not to be performed in Colorado, none of the EPEWA posting requirements would apply. Here is an example of such a post: “Open for remote work, except Colorado.” Although this approach to avoidance of EPEWA is legal, it has caused a backlash in public relations against employers who use it. Employers may not want to disclose proprietary compensation information in their job postings, but many also don’t want to be seen as disregarding pay equity concerns or the laws allegedly designed to address them. .
While EPEWA’s compensation display requirement has captured much of the public’s attention, its promotional opportunity requirements present their own unique challenges for employers. The law requires employers to alert current employees to any opportunity for promotion, which is further defined as any vacancy in a new or existing position that could be considered a promotion for any employee. There are some exceptions, including the fact that the notice should only be given to Colorado employees. Therefore, a multi-jurisdictional employer without Colorado employees can avoid this aspect of EPEWA. However, the employer with Colorado employees might, for example, question whether lower-level workers in Colorado should be alerted to a planned New York-based CEO position.
Violating EPEWA can have real and powerful consequences. The law provides for fines ranging from $ 500 to $ 10,000 per violation and creates a private right of action for wage discrimination which allows for damages of up to three years in arrears of wages to a person or a person. aggrieved employee.
So what to do with EPEWA if you are an unrelated employer in Colorado, but want to hire remote workers from anywhere in the United States?
Some clearly made a PR calculation and chose to avoid the law by excluding any Colorado worker or worker from these jobs. Others have made an effort to comply, but in a way that will not compromise their proprietary compensation systems or methodologies. For example, since EPEWA requires that a covered job offer include either a rate of pay or a range of pay, an employer may publish as wide a range of pay as possible and include a variety of relative qualifiers. to any determination of remuneration, including qualifications, experience, and geographic location. In doing so, the employer is only required to provide a reasonable and good faith estimate of the possible range of compensation for the posted position.
Feedback on the impact of EPEWA is early. The RMAR litigation remains pending and may ultimately result in the issuance of an injunction reducing EPEWA’s posting requirements. In the meantime, however, employers in the United States who have or may have jobs held by workers in Colorado should be aware of the potential impact of EPEWA on their job postings and other hiring practices. / promotion and should carefully consider their options and actions as a consequence.