Since Colorado enacted the Equal Pay for Equal Work Act (EPEWA), many have wondered what obligations employers would incur beginning in January 2021. In particular, the Act’s mandate regarding pay transparency has sparked a multitude of questions. This article explores the Colorado Department of Labor and Employment’s (CDLE) recent efforts to answer some of the most pressing inquiries.

Pay transparency requirements

On January 1, 2021, the EPEWA became enforceable in Colorado. The Act seeks to close the gender pay gap by prohibiting wage discrimination based on sex. In particular, it mandates that employers comply with pay transparency rules when they wish to hire or promote candidates. Recent rules and an Interpretive Notice from the CDLE have sought to clarify employer obligations regarding promotional opportunities.

The Act says employers must make reasonable efforts to announce or post promotional opportunities to all employees on the same day and before making a decision. The postings must disclose the hourly or salary compensation for the position (or a range) as well as a general description of all benefits or other compensation to be offered.

What constitutes a “reasonable effort” to announce or post a promotional opportunity? According to the CDLE, for an employer’s effort to be considered reasonable, it must comply with the following:

  • The posting must be in writing and include the job title, compensation, benefits, and means by which employees may apply for the job.
  • When posting or announcing the promotional opportunity, the employer must use its regular and customary method of communicating with employees. For any individual not reachable by that method, it must use an effective alternative way to provide notice.
  • If an employer posts a promotional opportunity rather than communicating it to each employee, the posting must be displayed in each establishment where they work and in a conspicuous location frequented by employees where it may be easily read during the workday. Conspicuous locations include bulletin boards, break rooms, and/or spaces adjacent to time clocks and department and facility entrances.
  • Although the promotional opportunities must be published for everyone, the employer “may state that applications are open to only those with certain qualifications.”

What constitutes a “promotional opportunity?” According to the CDLE, a “promotional opportunity” is a vacancy in an existing or new position that could be considered a promotion for any current employee in terms of compensation, benefits, status, duties or access to further advancement.

  • A vacancy in an “existing position” occurs when an existing position that the employer intends to fill is open or is held by a departing employee.
  • A vacancy in a new position occurs when an employer:
    • (1) adds a position; or
    • (2) gives an existing employee a new position, including by changing the employee’s title, and/or materially changing authorities, duties or opportunities.

The CDLE could consider an in-line promotional opportunity (i.e. from Research Analyst I to Research Analyst II) to be a vacancy in a new position.

What if a candidate negotiates a salary that’s higher than what the company originally advertised? Employers may ultimately pay higher or lower than the posted salary range if it reflects “the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.” This means that employers are not precluded from granting a candidate’s request for a higher salary.

How to comply during a pandemic

It can be tricky to communicate effectively with employees when many are working remotely. It isn’t enough to post a promotional opportunity on a bulletin board if employees who should view it are working remotely and will not see it. You may want to consider posting the announcement on a virtual “bulletin board” or sending e-mails to employees.