Understanding Colorado’s New Equal Pay for Equal Work Act

On May 22, 2019, Colorado Gov. Jared Polis signed the Equal Pay for Equal Work Act into effect, making Colorado’s equal-pay law among the most stringent in the country when it takes effect on January 1, 2021. For example, the new law imposes notice obligations that are unique in the United States:

“An employer shall make reasonable efforts to announce, post, or otherwise make known all opportunities for promotion to all current employees on the same calendar day and prior to making a promotion decision”; and

“An employer shall disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all the benefits and other compensation to be offered to the hired applicant.”

While future rules from the Colorado Department of Labor and Employment may shed light on these requirements, it appears the days of simply tapping someone for promotion—male or female—are all but over. And along with these notice requirements come prohibitions on requiring salary history, using salary history to set a wage, disciplining employees for discussing wages, and retaliation.

While not everyone agrees about the reasons for a gender pay gap, its existence is not disputed. Simply put, the gender pay gap is the percentage of compensation women earn as compared to men.

Colorado’s new law contains some sobering statistics in its legislative declaration: Colorado women as a whole make just 86 cents for every dollar men earn. The problem is even more evident for black and Latina women, who earn just 63.1 and 53.5 cents, respectively, for every dollar earned by white men.

While these numbers average the pay disparity across all areas and industries, in reality, these numbers rise and fall across the state depending on prevalent industry, education levels, and regional attitudes about work and gender. Another major factor affecting gender pay disparity is the existence and strength of equal pay laws, which means Colorado may be on the fast track to improve its ranking relative to other states.

And Colorado—which comes in at 21st place—is far from the worst. That distinction belongs to Louisiana, where women earn just 69 cents on the dollar compared to men. The gender pay gap is also conspicuously high in Utah, where Employers Council attorney Katie Hudman addressed it directly at this year’s Employment Law Update conference.

“Many factors cause the wage gap in Utah, and many fixes–from many sources–will be necessary to close the gap,” Hudman says. She adds that legislative fixes, while either modest or unsuccessful thus far, are nonetheless gaining momentum, and in the meantime, there is much Utah employers can do.

Meanwhile, Arizona, which has a pay-equity law that is less stringent than Colorado’s, ranks an impressive eighth nationwide.

The new law does allow employers to justify differences in pay if they can be linked to certain factors listed in the Act, such as seniority or merit systems, location, and systems that measure earnings by production quality or quantity.

Under the new law, employees have two years after a violation to file a lawsuit in district court. A violation occurs each time a person is affected by wage discrimination, including each time a discriminatory wage is paid. Employers found liable will pay the difference between what the employee was paid and would have been paid had there been no discrimination, plus an equal amount in liquidated damages, for up to three years. Employers are also liable for reasonable costs, including attorney’s fees, plus equitable relief such as employment, reinstatement, and promotion. An administrative method for resolving complaints without resorting to court is also likely forthcoming.

The law instructs courts not to award liquidated damages when the employer can demonstrate that the act or omission causing a pay disparity was in good faith and the employer reasonably believed it was not violating the law. The Act explains that one factor demonstrating good faith is whether the employer completed a “thorough and comprehensive pay audit of its workforce, with the specific goal of identifying and remedying unlawful pay practices” within two years prior to an employee commencing a lawsuit. Employers Council’s Affirmative Action Planning Services team performs these pay audits for members under attorney-client privilege.

The definition of “employer” under the new law is expansive and includes no exceptions for organizations that employ only a handful of people. Therefore, you will be in good company as you come into compliance with it over the next year and a half. As always, Employers Council will continue to publish resources to assist you. In the meantime, please don’t hesitate to contact us for assistance.

For information on scheduling a pay audit, contact Employers Council’s Affirmative Action Planning Services at 303.223.5670 or PayEquity@employerscouncil.org.