Colorado Employers’ Pay Transparency Obligations Are Changing in 2024

Governor Jared Polis recently signed into law legislation (SB 23-105 or the “Amendments”) that will soon change Colorado employers’ disclosure and notice requirements under the state’s Equal Pay for Equal Work Act (“Act”).

As we previously reported, in addition to prohibiting sex-based wage discrimination, the Act requires all employers, regardless of where they are located, with at least one Colorado-based employee to (1) notify their Colorado-based employees of internal opportunities for promotion and (2) disclose salary and benefits information in job postings for all positions that are or can be performed in Colorado. The Amendments modify the Act by:

• redefining the types of jobs for which employers must provide notice;
• expanding the information employers must include on the notices;
• adding information employers must provide about job opportunities; and
• establishing new enforcement procedures and rules for the Colorado Department of Labor and Employment (CDLE).

Of note, SB 23-105 removes the Act’s references to job postings, such that, purposefully or not, the Amendments appear to eliminate the requirement to provide salary or wage disclosures to anyone other than current employees. In other words, it appears to eliminate the requirement to include wage ranges in job postings. Colorado legislators have thus far been silent as to whether they intended this change. Therefore, we anticipate that guidance from the CDLE – or even another amendment – may yet be in store before SB 23-105 becomes effective on January 1, 2024.

Notification of all Job Opportunities, Not Just Promotions

One of the Act’s more perplexing and burdensome components is the requirement for employers to notify their Colorado-based employees of every opportunity for promotion or advancement at the company – regardless of location. CDLE guidance broadly defines this requirement to cover virtually all job openings, including entry-level positions and promotions or positions that are part of an employee’s career development (e.g., changes made to an employee’s compensation, benefits, status, or duties to reflect the work or contributions that the employee already made) or career progression (e.g., regular or automatic changes in an employee’s position based on time in the role or other objective metrics, such as the promotion from “level 1” salesperson to “level 2” salesperson). In addition, according to regulations implementing the Act, covered employers must provide this notice to all Colorado-based employees, regardless of their qualifications for the job.

The Amendments no longer refer to “opportunities for promotion.” Instead, they require employers to provide notice to employees of each “job opportunity,” which is more narrowly defined to mean “a current or anticipated vacancy for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts.” Accordingly, employers will no longer be required to determine whether a job opening constitutes a “promotion,” or to provide notice when a current employee is promoted.

SB 23-105 also includes a temporary exception for multi-state employers with a limited number of remote employees working in Colorado. Specifically, beginning January 1, 2024 through July 1, 2029, out-of-state employers that have fewer than fifteen remote employees in Colorado need only notify the employees of remote job opportunities (and not job opportunities that will necessarily be performed outside of Colorado).

Expanded Information Included in Job Notifications

In addition to providing salary and benefit information regarding job opportunities, SB 23-105 requires employers to also notify covered employees of the date the application window for the job is anticipated to close.

In addition, although employers will no longer need to provide Colorado-based employees with notice of career progression-promotions, the Amendments require employers to disclose and make available to all eligible employees the requirements for such career progression, as well as the compensation, benefits, full or part-time status, duties, and access to further advancement for each such position. The Amendments do not define who qualifies as an “eligible employee.”

New Disclosure Requirements Regarding Selected Candidates

Within thirty days of the selected candidate beginning in their new role, the Amendments require employers to give all employees with whom the individual will likely work the person’s (i) name; (ii) former job title (if  an internal candidate);  (iii) new job title; and to give them information on how employees may demonstrate interest in similar job opportunities, including identifying individuals or departments to whom employees can communicate their interest.

Revised Enforcement Procedures, Rules, and Penalties for Equal Pay Violations

The Act currently authorizes the CDLE to establish procedures for investigating and mediating complaints of wage discrimination under the Act and to adopt implementing regulations. SB 23-105 requires the CDLE to establish these procedures and rules, as well as to investigate complaints and, where appropriate, order compliance and relief for violations of the Act’s wage discrimination provisions. Importantly, if the CDLE determines that an employer has violated the Act, the Amendments expand the maximum period for which relief is available to aggrieved employees and applicants from three to six years.

We will continue to monitor the CDLE and Colorado legislature for further guidance as to employers’ disclosure obligations for job postings following the January 1, 2024 effective date of the Amendments.