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Colorado pay transparency law survives preliminary injunction


Colorado’s Equal Pay for Equal Work Act came into effect on January 1, 2021. The law creates significant compliance burdens for employers with even a single employee in Colorado. In fact, the law is the only law in the United States that requires employers (1) to post compensation and benefits information with every job posting for Colorado jobs, and (2) to post information internally. promotion opportunities to current Colorado employees on the same day and sufficiently in advance of promotion decisions.

These unprecedented display requirements have been called into question. In December 2020, the Rocky Mountain Association of Recruiters (RMAR) filed a complaint with the U.S. District Court for the District of Colorado against the Colorado Department of Labor and Employment (CDLE) alleging that the transparency requirements of the law and associated regulations are unconstitutional. On May 27, 2021, the court denied RMAR’s request for a preliminary injunction to prevent the CDLE from enforcing the law’s publication requirements. Specifically, the court ruled that the requirements for posting promotion opportunities and including compensation information in job postings did not violate the Dormant Trade Clause or the First Amendment because they did not unduly overload interstate commerce or commercial discourse.

It is important to note that the court’s refusal to grant an injunction was due to the lack of evidence on the record at this initial stage of the litigation before the discovery. RMAR could ultimately be successful in the trial if the case is adequately developed with the specific types of evidence that the court identified as necessary to determine whether the law is unconstitutional. Until then, the law will remain in effect, the CDLE is moving forward with enforcement action, and all employers with a single employee in Colorado may wish to review the full requirements of the law.

Below are answers to some frequently asked questions from employers of all sizes who are just starting their path to compliance.

Question 1. Are employers required to post job vacancies externally?

Answer 1. No. Colorado law does not create an external display requirement.

Q2. If an employer chooses to post a position externally, what compensation information must the employer include in the posting?

A2. If work that could be done in Colorado is posted outside, state equal pay transparency rules require that the posting include the rate of pay or a range of pay; a general description of bonuses, commissions or other remuneration; and a general description of all employment benefits available for the position, including health care benefits, pension benefits, paid time off and any reportable tax benefits. Benefits can be listed in a linked document, as long as the link is clearly provided in the publication.

Q3. What is the specificity required for the compensation? (For example, can employers just provide a minimum wage?)

A3. According to the Equal Pay Transparency Rules, the “range of pay displayed may extend from the lowest salary to the highest salary that the employer believes in good faith he could pay for the particular job” at the time of publication. Not indicating that the minimum rate of pay would not comply with the law. An employer may ultimately pay more or less than the range displayed. If an employer hires above or below the posted range, employers may want to ensure that they make that decision based on good faith factors other than the candidate’s gender and salary history, such as experience, education, training or geographic location. It is important to note that employers cannot search the salary history of job applicants, and if the employer becomes aware of a candidate’s past salary, the employer cannot trust this information. to determine the current salary.

Q4. Do the rules apply outside of Colorado?

A4. It depends. With respect to the requirement to disclose pay ranges, employers with at least one employee in Colorado are required to disclose pay ranges for (1) jobs in Colorado or (2) jobs that could be played in Colorado. For the avoidance of doubt, employers may consider specifying in the posting whether a position can be filled in Colorado.

However, the obligation to provide Colorado employees with advance notice of promotion opportunities extends company wide. For example, if a Vice President of Human Resources position is available in Chicago, all Colorado employees (including entry-level employees and employees with no HR experience) must first be notified and given the opportunity to apply. at the Chicago opportunity. Employees outside of Colorado do not need to be made aware of promotional opportunities.

Q5. Should an employer post pay scales for all “remote” or “flexible” positions, even if the odds of hiring someone in Colorado are low?

AT 5. Yes. If a job could be performed in Colorado and the employer chooses to post the job outside, the Equal Pay for Equal Work Act is triggered.

Q6. Does the law oblige an employer to publish promotional offers internally?

A6. Yes. “An employer is required to make ‘reasonable efforts’ to’ announce, post or otherwise make known all promotional opportunities to all current employees [in Colorado] on the same calendar day and before making a promotion decision. “

Q7. What is a “promotional opportunity”?

A7. The CDLE defines “promotion opportunity” in the broad sense as “a vacant post in an existing or new post which could be considered as a promotion for one or more employees in terms of remuneration, benefits, status, functions or access to further advancement ”. It’s important to note that the term is not limited to positions for which a Colorado employee is qualified. Under equal pay transparency rules, employers can’t unilaterally determine who gets notice of promotion opportunities – every Colorado employee must be given notice.

Q8. Do “career advancements” or “online promotions” count as promotional opportunities?

AT 8. Yes.

Q9. What information about promotional opportunities should be included?

A9. The transparency rules on equal pay provide that the posting must include at least the “(A) job title, (B) pay and benefits [only if the promotional opportunity is a Colorado job or could be a performed as a Colorado job], and (C) the means by which employees can apply for the position.

Equal Pay for Equal Work law requires notice to be given in a manner that allows Colorado employees to apply and be considered for a position. (For most employers, this means that the notice would be provided by posting the opportunity.) Again, by law, there is no obligation to give notice to the general public, so exclusively internal display is authorized.

Q10. Would posting a promotional opportunity on an internal career site (where all business unit employees have access) comply with the law?

A10. An employer should make “reasonable efforts” to notify Colorado employees of promotion opportunities. The equal pay transparency rules specify that “reasonable efforts” may include “the employer’s usual and customary method of communicating with its employees”. The Employer may provide written notice to employees “of the location and / or means by which promotional opportunities will be advertised”. This may include notifying employees of an internal career site.

Q11. Are there any exceptions to the Promotional Opportunity Notification requirement?

A11. Yes. The CDLE identifies three very narrow exceptions to the promotional display requirements: (1) there is a need for confidentiality, because “the promotional opportunity is to replace an incumbent employee” and the incumbent is not aware that it is. being separated; (2) there is an automatic consideration for promotion after a trial period within one year on the basis of a written statement; and (3) the post is temporary, acting or acting, for a period of less than six months.

Q12. Can employees or candidates sue for violating pay transparency rules?

AT 12. The law does not provide for a private right of action related to publication requirements or pay transparency, so employees and applicants cannot directly sue to enforce the provisions of the law. However, they can lodge complaints with the CDLE, and the CDLE has full authority to investigate and take enforcement action.

Q13. What are the potential consequences of not respecting the provisions of the law?

A13. The law provides for fines of $ 500 to $ 10,000 by offense (i.e. in the event of non-disclosure of a pay range for each job offer covered), and the CDLE can order an employer to comply with the law. The CDLE is speeding ahead with the investigation of potential nonconformities, and employers may want to keep abreast of their obligations under the law.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, PC, All rights reserved.Revue nationale de droit, volume XI, number 180

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