Colorado amends equal pay disclosure requirements 

December 13, 2023

The Ensure Equal Pay for Equal Work law was signed by the governor on June 5, 2023, and builds on the Equal Pay for Equal Work Act that took effect in 2021 — clarifying employers’ existing disclosure obligations and adding new requirements. The law will take effect on Jan. 1, 2024, and Colorado’s director of the division of labor standards has issued implementing enforcement rules.

Employers must make reasonable efforts to announce, post or otherwise make known each job opportunity to all employees on the same calendar day and prior to the date on which the employer makes a selection decision. Consequently, in general, employers will need to notify employees of open positions prior to hiring.

The rules clarify that “reasonable efforts” means employers should use any methods to ensure all covered employees are told where to find required postings or announcements and can access information (either online or via a hard copy) within their regular workplace. If a particular method reaches some but not all employees, such as an online posting not accessible to those lacking internet access, an alternative method should be provided to such employees.

The rules also clarify that while employers must notify all employees, the notice may state that applications are open to only those with certain qualifications, and employers may screen or reject candidates based on such qualifications.

In each job opportunity notification, the employer must provide:

• The hourly or salary compensation or the range of the hourly or salary compensation. A posted compensation range may extend from the lowest to the highest pay the employer, in good faith, believes it might pay for the 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.
• A general description of any bonuses, commissions or other forms of compensation applicable to the job opportunity
• 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
• The date the application window is anticipated to close. If there is no deadline because the employer accepts applications on an ongoing basis, the posting must say so, and a deadline need not be included. A deadline may be extended as long as the original deadline was a good-faith expectation or estimate of what the deadline would be, and the posting is promptly updated when the deadline is extended.

The rules clarify that no immediate job opportunity posting is required to fill a position on an AINT basis for up to nine months where:

• The AINT hiring is not expected to be permanent, and if the hire may become permanent, the required job opportunity posting must be made in time for employees to apply for the permanent position
• The same or a substantially similar position was not held any time in seven or more of the preceding 12 months by another AINT hire for which there was no job opportunity posting. However, if an AINT hire separates after more than seven months from a position expected to last up to nine months, then a posting is not required for a replacement to finish their term.

If an employer is only physically located outside of Colorado and has fewer than fifteen employers working in Colorado, all of whom work only remotely, the employer is only required to provide notice of remote job opportunities until July 1, 2029.

The law defines the following terms to clarify employers’ posting obligations:

• “Job opportunity” — a current or anticipated vacancy, posted externally, for which the employer is considering candidates or interviewing candidates. This does not include career development or progression.
• “Vacancy” — an open position which is the result of a newly created position or a vacant position.
• “Career development” — a change to an employee’s terms of compensation, benefits, full- or part-time status, duties or access to further advancement — to update the employee’s job title or compensation to reflect work performed or contributions already made. The rules clarify that such existing work or contributions need to be part of the employee’s existing job and were not within a position with a current or anticipated “vacancy.”
• “Career progression” — a regular or automatic movement from one position to another based on time in a specific role or other objective metrics.

Employers will have to disclose certain information about hired candidates to, at a minimum, those employees with whom the hired candidate is expected to work with regularly. The rules clarify that “work with regularly” means employees who, as part of their job responsibilities, either collaborate or communicate about their work at least monthly, or have a reporting relationship (i.e., supervisor or supervisee). Employers may comply by providing notice to a broader range of, or all, employees. Within 30 calendar days after a hired candidate begins working in the position, an employer must make reasonable efforts to announce, post, or otherwise make known, the following information at a minimum:

• Name
• Former job title if an internal hire
• New job title
• Information on how employees may demonstrate interest in similar job opportunities in the future, including identifying individuals or departments to whom the employees can contact about those opportunities.

The rules clarify that employers may comply with this requirement by providing notice of individual selection or multiple selections.

Employers are not required to disclose information that violates the candidate’s privacy rights under applicable law or that would pose a health or safety risk to the candidate. The rules clarify the exception and provide a procedure by which a selected candidate can inform an employer that they believe disclosure would put their health or safety at risk. Employers still must provide all other required post-selection information, even if it does not disclose a candidate’s name or prior job title.

Employers must disclose and make available to all eligible employees (consistent with methods for reasonable efforts for job opportunity postings) the requirements for career progression, in addition to each position’s terms of compensation, benefits, full- or part-time status, duties and access to further advancement. The rules define “eligible employee” as those in the position, that, when the requirements in the notice are satisfied, would move from their position to another position listed in the notice as a “career progression.”

The rules clarify that the job opportunity notice, post-selection notice, and career progression notice requirements do not require notice to employees entirely outside of Colorado. Also, the compensation and benefits disclosure requirements do not apply to postings for jobs to be performed entirely outside of Colorado or physically located entirely outside of Colorado.

On or before July 1, 2024, Colorado’s director of the division of labor standards must create and administer a process to mediate complaints related to violations. In addition, the director also must:

• Investigate complaints or other leads concerning wage inequity
• Order compliance and relief upon finding a violation
• Promulgate enforcement rules

The rules issued in November 2023 include complaint, investigation and appeal procedures. The Division will not accept complaints of violations that occurred before Jan. 1, 2021.

Employees may obtain up to six years of back pay for a violation (an increase of three years).

Colorado’s director of the division of labor standards will issue enforcement rules to implement the amended equal pay law. In the meantime, here are some steps for employers to consider.

• Job organization
• Are jobs well defined? Well-defined roles can help ensure understanding of the pay for the nature of work.
• Are jobs organized in a meaningful and logically consistent framework? Ambiguity in the relative contribution of a role might make it difficult to understand the pay associated with the role.
• Do employees and managers know how to navigate their careers? Once job postings include pay ranges, current employees may want to understand how their career and pay opportunities compare.
• Pay strategy
• Does the organization have a compensation philosophy, including a well-articulated rationale as to why the pay system is designed as it is, what skills or performances are rewarded, and how pay is delivered to put pay ranges into context?
• Are benchmark jobs and salary ranges up to date? Competitive pay ranges will ensure that posted ranges attract the right talent.
• Pay equity
• Is robust statistical analysis used to identify and remediate disparities? Sharing pay ranges can carry risks if employees’ actual pay relative to those ranges is not defensible from a human capital management perspective.
• Can pay decisions be soundly defended? Confidence that pay policies and practices mitigate inequities can reassure candidates and employees about pay equity.
• Employee perception
• How do candidates and employees view the organization? Understanding how the organization’s value proposition is viewed is critical to ensuring pay ranges meet the expectations of candidates and employees.

• What is the desired compensation story?
• What will be shared?
• With whom will the story be shared?
• How will the information be shared, and what is the desired reaction?
• Why is the compensation story important?

• Create a digital platform where employees and external candidates can access salary information and explore career paths.
• Develop training toolkits and resources for managers and HR partners to ensure the compensation strategy is effectively and consistently communicated.
• Enhance performance management and coaching resources to include modeling tools that illustrate earnings potential for various career opportunities.

• Highlight key experiences and branded employee communication/messaging.
• Define broad external candidate messaging that is consistent with internal messaging.
• Create a communication playbook (including target audience, communication objectives for the audience, delivery vehicles, frequency/timing, challenges, metrics, etc.) to ensure clarity and transparency for all employees at various points of the journey.

• Survey candidates and employees to identify unmet needs and which aspects of the value proposition — including compensation — are most important.
• Conduct statistical modeling to see how employees' perception of pay affects outcomes (such as turnover).

• Senate Bill 23-105 (Legislature)
• Equal pay transparency rules (Division of Labor and Employment)
• Governor Polis signing bills into law to help support youth mental health, foster youth & grow economy (Governor’s office, June 5, 2023)

• Roundup: US employer resources on states’ recent equal pay laws (regularly updated)
• New York to require salary ranges in job postings (March 9, 2023) 
• California to impose more salary disclosure, pay data reporting (Oct. 3, 2022)
• Salary information will be required in New York City job postings (May 4, 2022)
• Colorado’s new pay equity law takes effect in 2021 (June 6, 2019)
• Washington regulator clarifies new pay disclosure requirements (December 19, 2019)

• 2023-2024 Inside employees’ minds study: Guide to US employees’ pressing needs and how to meet them (Section 3) (Mercer)