Colorado Brings More Transparency and Equality to Pay

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Patricia Tsipras

June 15, 2023

Update: Colorado’s Department of Labor and Employment, Division of Labor Standards and Statistics, issued Equal Pay Transparency Rules to clarify its pay transparency statute.  The rules are effective on January 1, 2024.

On June 5, 2023, Colorado amended its pay transparency statute to change employers’ obligations with respect to job postings and notices of promotion opportunities.  See 2023 Bill Text CO S.B. 105.  The amendments become effective on January 1, 2024.

Career Progression Promotions Are Not Job Opportunities That Require Posting

Colorado’s Equal Pay for Equal Work Act currently requires, among other things, that employers notify Colorado employees of all promotional opportunities company-wide.  The regulations broadly define promotional opportunity to include in-line or career progression promotions.

The amendments specify that a “job opportunity” subject to the internal posting requirements exists only when an employer has a “vacancy” – that is, an opening from a newly created or vacated position.  The amendments thereby eliminate the in-line promotional opportunity posting requirement.  “Job opportunity” does not include “career development” – that is, changes to employees’ terms of compensation, benefits, full- or part-time status, duties, or changes in title or compensation reflecting past performance.  The amendments also exclude from the definition of job opportunities “career progression” – that is, movement from one position to another based on time in a specific role or other objective metrics.

Employers Must Announce New Hires and Promotions Internally

The new law will require that employers – within 30 days of a candidate’s start date in a new role – use reasonable efforts to make known to the employees with whom the selected candidate is going to work, the identity of the candidate.  The notice must include:  (1) the name of the selected candidate; (2) the selected candidate’s former job title, if the selection was internal; (3) the selected candidate’s new job title; and (4) information on how employees may demonstrate interest in future, similar job opportunities.  In addition, if a job has a defined “career progression,” employers will have to disclose the requirements for such progression, along with the terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement.

Notice of Promotion Opportunities to Colorado-Based Remote Employees of Company with No Physical Office in the State

Until July 1, 2029, employers with no physical office in Colorado with fewer than 15 Colorado-based remote employees must provide to those Colorado-based employees notice only of remote job opportunities – not all promotion opportunities with the company.

Extended Recovery Period On, and Process for Investigations and Mediations Of, Wage Claims

Colorado’s equal pay statute prohibits pay discrimination based on sex, or pay discrimination based on sex plus another protected status.  Employers may use only a limited set of factors to explain wage disparities.  The amendments extend – from three years to six years – the recovery period for damages in such wage discrimination claims.  They also require the Colorado Department of Labor to create a process to investigate and mediate claims of wage discrimination.

Action Items

The Colorado Department of Labor and Employment is expected to issue guidance on the amended law.  While they await such guidance, employers should begin to evaluate their job opportunities and develop a plan for compliance with the amended law.

*Special thanks to Brooke Palma, our Office Administrator, for her contributions to this article.

The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Colorado, or Pennsylvania, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.