Equal pay is the law in Colorado. Governor Polis signed a bill that made Colorado the tenth state in the country to pass an equal pay law. Colorado’s law goes into effect on January 1, 2021 and is more demanding than federal law. What does the Equal Pay Act mean for you and your business?
The law is designed to protect against discrimination because of an individual’s sex in combination with another protected status, including gender identity, from pay discrepancies in employees performing substantially similar work. Employees also have a private right of action for pay discrimination that includes up to three years of back pay and liquidated damages. The penalty for a pay violation includes payment of the differential between what the employee was paid and what the employee would have been paid if there was no violation, plus an equal amount of additional damages.
An employers’ defenses include establishing that the act or omission giving rise to the pay violations were made in good faith. Employers may also show that pay discrepancies are justified based on any of these factors:
- A merit system;
- A seniority system;
- A system that measures earnings by quantity or quality of production;
- A geographic location where the work is performed;
- Education, training, or experience to the extent that they are reasonably related to the work in question;
- Travel, if a regular and necessary condition of the work performed.
What makes Colorado’s law different from other states’ laws is the notice requirements:
- Employers must post, announce or make known to current employees all opportunities for promotion on the same calendar day;
- Employers must disclose in all postings for each job opening both the hourly or salary compensation or a range of compensation and a general description of all benefits offered.
Secondly, Colorado’s new law bans salary history inquiries by an employer including seeking the prospective employee’s wage history, relying on wage history to determine a wage rate or discriminating against a potential employee for failing to disclose wage history.
Finally, the law prohibits employers from preventing employees from discussing compensation with others.
Colorado now follows similar states’ laws which were enacted to secure not only pay equity for similarly situated employees, but protection against pay history and pay transparency discrimination.
If you would like more information or have any questions regarding this article, please reach out to MB Law at info@mb-law.law
*This information is for general purposes only and is not intended to constitute any specific legal advice of any type.