The Public Sector and Colorado’s New Pay Equity Law

The Equal Pay for Equal Work Act, the new pay equity law in Colorado, is part of a growing trend; seventeen other states already have similar legislation. There will likely be more to follow.

While the time-honored practices of public sector employers may help insulate them from the liability that is lurking for less prepared private employers, public employers still need to pay attention. On January 2021, all employers, public and private, will need several policies and practices in place to be in a good position to comply with the law:

Job Descriptions – in effect, there must be job descriptions for all positions. This is common at medium to large-sized municipalities and special districts – such as fire departments, schools, or counties. While you may have the job descriptions in the file, when was the last time you reviewed them? What becomes a potential hazard is becoming complacent because you know you have them, but you have not looked at them in over a year. Jobs can change, and you can pay accordingly, but if you do not have the most current duties, you may have to defend a raise you gave to an employee when their job became more complex and more skilled, but the job description does not reflect that.

Promotion Postings – A common practice in the public sector is posting internally when there is an opening. While this may put you a step ahead, realize that under the new law, there is information that must be shared. The pay range, including benefit values, must be included in the posting, and it must go out to all employees at the same time. You may still include eligibility criteria.

Pay Increases – the law favors standard pay increases and must be based on particular identifying factors such as education, experience, seniority, geographic location, the amount of travel, and merit. It is not uncommon for the public sector employer to provide a cost of living adjustment across the board. In effect, this is a seniority system because the longer someone has worked in the public sector, the higher their pay due to annual cost of living increases. It also can be argued that these increases are due to geographic location if the increase skills toward the cost of living in the area.

Compensation Plans – while the law doesn’t require this, explaining pay differentials without a compensation plan with pay bands will be nearly impossible. Jobs with similar skills and abilities need to be in the same range or one close in pay. Public sector employers are famous for pay ranges and steps. However, public sector employers will need to review these ranges and steps to make sure that they have jobs in the correct job families based upon knowledge, skills, and abilities because you may have to justify why positions are within a given range.

One way a public entity may conflict with the law is asking for salary history. This will not be allowed after January of 2021 in Colorado, and public sector members are advised to change this practice now.

If you have questions about the new law and its impacts on your workplace, please do give Employers Council a call. We have numerous professionals hard at work at providing you information and assistance on this far-reaching new law.