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Colorado Equal Pay Transparency Rules

November 12, 2020 Alerts

New rule requires that employers post compensation and benefit information for all positions in Colorado on job postings.

At a Glance

  • All Colorado employers are required to disclose compensation or a range of compensation on all job postings, including promotions, for positions in Colorado.
  • All Colorado employers are required to provide a general description of all benefits and other compensation to be offered on all job postings, including promotions, for positions in Colorado.
  • The Colorado Department of Labor and Employment has issued guidance on submitting and responding to a wage and hour complaint.
  • Effective January 1, 2021.
  • See the full bill here.

Introduction

On November 10, 2020 the Colorado Division of Labor and Employment adopted Equal Pay Transparency Rules, to be effective on January 1, 2021. The new rule requires that employers post compensation and benefit information for all positions in Colorado on job postings. Additionally, any promotional opportunity must be made available to all employees, with limited exceptions, and include the compensation and benefit information.

The Equal Pay Transparency rules also provide guidance on wage and hour complaints for employees and employers.

Job Posting Requirements

Employers must include the following compensation and benefits information in each posting:

  • The hourly rate or salary compensation (or a range of compensation) that the employer is offering for the position;
  • A general description of any bonuses, commissions, or other forms of compensation that are being offered for the job; and
  • A general description of all employment benefits the employer is offering for the position, including health care benefits, retirement benefits, any benefits permitting paid days off (including sick leave, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, but not benefits in the form of minor perks.

A posted compensation range may extend from the lowest to the highest pay the employer, in good-faith, believes it might pay for any particular job, depending on the circumstances. An employer may ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.

Promotions

An employer is required to make “reasonable efforts” to announce, post or otherwise make known all opportunities for promotion to all current employees on the same calendar day and prior to making a promotion decision. Employers must notify all employees of promotional opportunities, not just those the employer deems qualified for the position.

A communication announcing, posting, or otherwise making a promotional opportunity known must be in writing and include at least:

  • job title,
  • compensation and benefits and
  • means by which employees may apply for the position.

An employer may also state that applications are open only to those with certain qualifications, and may screen or reject candidates based on such qualifications.

Some exceptions do apply to the requirements for promotions.

  • If the employer has a compelling need to keep a particular opening confidential because the position is still held by an incumbent employee, who the employer has not yet made aware they will be separated, a promotional opportunity does not need to be posted to all employees.
    • If any employees are told of the promotional opportunity, they must meet the minimum qualifications or have a substantially similar job.
    • If the need for confidentiality ends before any deadline to apply for the job, then the employer must notify all employees of the availability.
  • If an employee is automatically promoted after a trial period within one year of hire with written representation, it is not required that the employer post the position for all employees.
  • No promotion posting is required to fill a position on a temporary basis for up to 6 months where the position/hiring is not expected to be permanent.
    • If the hire may become permanent, the required posting must be made in time for employees to apply to the permanent position.

Exemption

The requirements do not apply to employees entirely outside Colorado, and the compensation posting requirements do not apply if either the job is to be performed entirely outside of Colorado or the postings are entirely outside Colorado.

Wage and Hour Complaints

Employees who have been aggrieved by a wage an hour complaint may file a complaint with the Colorado Division of Labor and Employment (CO DLE) on the division approved form. In an Compliant investigation, the CO DLE will send the employer a Notice of Complaint along with any relevant supporting documents. The CO DLE may issue an order to cease non-compliance and fine employers if they determine the employer is non-compliant.

  • Complainants have 35 days to respond to the divisions request
  • Employers have 14 days to respond to a complaint, unless an extension is granted.
  • The division will not accept complaints of violations that occurred before January 1, 2021.

Next Steps

Employers should review their current hiring and promotion practices to prepare for the January 1, 2021 deadline. Employers may need to update their job postings and gather compensation data to provide to applicants and current employees seeking promotion.

Employers can update their job applications in Paylocity’s Applicant Tracking System and review their current compensation practices with Paylocity’s Compensation Management tool. Should you have any questions please contact your Paylocity Account Manager.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.


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