Overview: Colorado has enacted legislation that will expand the state’s equal pay protections, prohibit inquiries about applicants’ pay history, and create new requirements regarding transparency in pay and promotions.
Effective Date: January 1, 2021
Colorado has enacted legislation (Senate Bill 19-085) that will expand the state’s equal pay protections, prohibit inquiries about applicants’ pay history, and create new requirements regarding transparency in pay and promotions.
Senate Bill 19-085 prohibits employers discriminating on the basis of sex, or because of sex in combination with another protected characteristic under Colorado law, by paying one employee a wage rate less than another employee of a different sex (and protected characteristic if applicable) for substantially similar work (based on a composite of skills, knowledge, and responsibility).
Exceptions to equal pay requirements exist where employers show:
· That the wage differential is based on:
o A seniority system
o A merit system;
o A system that measures earning by quantity or quality of production;
o The geographic location where the work is performed;
o Education, training, or experience to the extent that they are reasonably related to the work in question; or
o Travel, if a regular and necessary condition of the work performed.
· That each of the above factors that is relied upon to justify the pay differential is: 1) applied reasonably; and 2) accounts for the entire disparity; and
· That the employee’s pay history wasn’t relied upon to justify the pay differential.
Pay History Inquiries:
Senate Bill 19-085 prohibits employers from:
· Seeking the pay history of an applicant;
· Relying on the pay history of an applicant to determine their pay;
· Discriminating or retaliating against an employee for failing to disclose their pay history;
· Taking adverse action against employee because they invoked the law or assisted in enforcing the law;
· Taking adverse action against an employee because they inquired about, disclosed, compared, or otherwise discussed the employee’s pay rate; or
· Barring employees from disclosing their pay rate.
Pay and Promotion Transparency:
In all job postings, employers must disclose the hourly rate or salary, or pay range, and a general description of benefits for the position. Senate Bill 19-085 also requires employers to make reasonable efforts to announce, post, or otherwise make known all opportunities for promotion to all current employees on the same day.
Employers must keep records of job descriptions and pay history for each employee for the duration of employment plus two years to determine if there is a pattern of wage discrepancy.
Action Required: Colorado employers should review application forms, policies, practices, and training to ensure compliance with Senate Bill 19-085.
Please contact your dedicated service professional with any questions.
This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.