New Equal Pay for Equal Work Act Takes Effect in Colorado on January 1, 2021

By Kiki Council

           On January 1, 2021, Colorado’s new Equal Pay for Equal Work Act (the “EPEWA” or the “Act,” SB 19-085), will prohibit employers from discriminating based on sex, including gender status, by paying less for “substantially similar work.”[1]  The EPEWA seeks to increase pay equity and transparency and imposes several new notice and recordkeeping requirements.

           The Act prohibits sex-based pay discrimination for work requiring similar skill, effort, and responsibility, except where an employer can show the wage differential is based on one or more of the following[2]:

• A seniority system

• A merit system

• A system that measures earnings by quantity or quality of production

• The geographic location where the work is performed

• Education, training, or experience to the extent they are “reasonably related” to the work in question; or

• Travel, if that travel is regular and a necessary condition of the work performed

An employer must apply the above scenarios “reasonably” and account for the entire wage rate to avoid a claim of sex-based pay discrimination, and potentially paying the aggrieved employee back pay for up to three years.[3] 

Under the EPEWA, an employer cannot[4]:

• Seek or rely on the wage rate history of a prospective employee to determine a wage rate

• Discriminate or retaliate against a prospective employee for failing to disclose his or her wage rate history

• Discharge, discriminate, or retaliate against an employee for invoking or enforcing the Act on anyone else’s behalf

• Discharge, discriminate or retaliate against, coerce, intimidate, threaten, or interfere with an employee or other person because that employee asked about, disclosed, compared, or otherwise discussed the employee’s wage rate

• Prohibit, as a condition of employment, an employee from disclosing his or her wage rate; or

• Require an employee to sign a waiver or other document that either

• Prohibits the employee from disclosing wage rate information; or

• Denies the employee the right to disclose his or her wage rate information

Takeaway

           At minimum, to ensure compliance with the new law when it takes effect on January 1, 2021, Colorado employers should:

• Review and update (or create) recordkeeping policies, as the EPEWA requires employers to keep records of job descriptions and wage rate history for each employee for the duration of employment, plus two years after the end of employment[5]

• Review and update (or create) policies regarding postings of opportunities for promotion or advancement, as the Act requires that an employer disclose each posting for a promotion to be made to all employees on the same calendar day and prior to the promotion decision[6]

• Conduct an internal pay equity audit to remedy potential discrepancies

• Review and revise job descriptions to comply with the EPEWA

• Train hiring, supervisory, and human resources personnel regarding the Act’s requirements and prohibitions

Contact Campbell Litigation, P.C. for help with bringing your policies up-to-date.

Footnotes:

[1] Colo. Rev. Stat. § 8-5-102(1)

[2] § 8-5-102(1)(a)(I)–(VI)

[3] § 8-5-103(3)

[4] § 8-5-102(2)(a)–(f)

[5] § 8-5-202

[6] § 8-5-201(2)