Colorado Adopts Equal Pay Rules, Dialing Back Multi-State Impacts, Defining Promotional Opportunity

On November 10, 2020, the Colorado Department of Labor and Employment’s (CDLE) adopted Equal Pay Transparency (EPT) Rules, interpreting the requirements of the Colorado Equal Pay for Equal Work Act (EPEW Act) taking effect January 1, 2020. We previously reported on the proposed rules and their potential for impact beyond Colorado’s borders. After reviewing comments on the proposed rules and holding a public hearing, the CDLE adopted rules that dial back this multistate impact and define promotional opportunity.

The CDLE lessened the impact on multistate employers by deleting the three cases from the proposed rules that broadly interpreted the promotion posting requirements and adding geographic limits. The adopted rules say that the promotional posting requirements do not apply to employees entirely outside of Colorado. Further, the compensation posting requirements do not apply to either:

  • Jobs to be performed entirely outside of Colorado, or
  • Postings entirely outside of Colorado.

The EPEW Act requires employers to make reasonable efforts to post promotional opportunities to current employees on the same calendar day as they are posted externally and prior to making a promotion decision. Neither the Act nor the proposed rules defined promotional opportunity. In the adopted rules, the CDLE defined a “promotional opportunity” to exist, “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employees in terms of compensation, benefits, status, duties, or access to further advancement.”  While clarity on this point was needed, this definition is very broad. By encompassing job changes that “could be considered” promotions by “one or more” employees, the definition could encompass situations employers would not ordinarily consider promotions, including some non-competitive job changes affecting only one employee.

Luckily, the CDLE carved out three exceptions to the Act’s posting requirements:

  • Posting is not required where an employer has a compelling need to keep the opening confidential such as where there is an incumbent employee in the position who is not yet aware that they will be separated. Posting is required when the need for confidentiality ends and where the employer informs any employees of the opportunity.
  • Automatic promotion after trial period. Posting is not required for promotions awarded within one year of an employee’s hire where the promotion is outlined in an offer letter, agreement, or a policy published to all employees.
  • Temporary, acting, or interim hires. Posting is not immediately required for positions that are expected to last six months or less and are not expected to be permanent. Posting is required once an employer determines that position may become permanent.

Remember, these rules are the CDLE’s interpretation of the EPEW Act – they are not part of the Act itself. They are intended to provide further guidance for employers on how to comply. And, they will be used by the CDLE in enforcing the Act’s requirements. But, as we have seen, agencies sometimes change their interpretations, and agency interpretations may be rejected or revised by courts. We will continue to update you on any changes. Contact us with your questions on how these rules apply to your organization.