Job-Postings Must List Compensation Rate

What’s happening in Colorado? Sitting here in my New York office, I’ve had an unusual spike in inquiries over the past few weeks about a relatively new labor law in Colorado, the Equal Pay for Equal Work Act (EPEWA). The inquiries are not coming from employers who are based in Colorado, have an office or facility in Colorado, or even have an employee in Colorado, but from employers who have no connection with Colorado at all other than that MAKES hire someone who would work remotely from Colorado.

This development is likely due to an unusual coincidence of circumstances including: (i) continued, proactive legislative pressure on laws to eliminate unfair wage practices that discriminate on an unlawful basis (e.g. gender or race); (ii) advanced technology that make remote working more effective; and (iii) evolving concepts of the workplace suddenly accelerated by COVID-19, where workers do their work from anywhere outside the employer’s office or facility and in jurisdictions where the employer may not otherwise is present, can do it remotely, even in Colorado.

It is nothing new for state legislators to take action to refine their equal pay laws to promote and ensure equal pay in the workplace. In recent years this has happened across the country, including New York. Such refinements have often resulted in employers being banned from asking applicants about their pay history or extending protection based on gender to other protected categories (e.g. race, age, sexual orientation, etc.).

Colorado’s EPEWA is certainly a part of this development, but it represents something completely different and new by requiring employers to:

(i) disclose in each job advertisement “the hourly or salary or a range of hourly or salary” together with the benefits associated with the position and

(ii) Inform current employees of vacancies that may be eligible as an advertising opportunity before the position is filled.

In fact, no other state has yet required employers to include pay rate information in their job postings. In general, employers consider and treat compensation information as confidential for strategic reasons and purposes. How an employer compensates its employees is often seen as an important and protected aspect of its competition for talent in the marketplace, and competitive advantage can be derived from keeping this information confidential and kept away from competitors.

EPEWA’s far-reaching reach has only compounded the discomfort, if not the difficulty, for employers, particularly outside of Colorado. The compensation disclosure requirement applies not only to job postings in Colorado, but also to any remote job posting that might be conducted in Colorado. As a result, for example, the New York employer that is open to teleworking positions (perhaps even more so as a result of the COVID-19 pandemic) must now consider EPEWA and disclose compensation information in every job posting if the position could from one Applicants in Colorado are to be filled out.

Efforts by employers to avoid EPEWA began immediately. In fact, before the law went into effect, the Rocky Mountain Association of Recruiters (RMAR) sued the Colorado Department of Labor and Employment in Colorado Federal Court for constitutional enforcement of the job posting requirements. Among other things, RMAR alleged that posting regulations placed an undue burden on interstate trade and were in conflict with similar legal regulations in other states. At the end of May, the court issued an order denying the application for an injunction, and EPEWA’s posting requirements continue to apply.

Unperturbed, some multi-jurisdictional employers simply decided to exclude Colorado workers from posting, meaning that if the job was not held in Colorado, none of the EPEWA posting requirements would apply. Here is an example of such a publication: “Open to remote work, except in Colorado.” While this approach to avoiding EPEWA is legal, it has created public relations backlash against employers who use it. Employers may not want to disclose proprietary compensation information in their job postings, but neither do many want to be viewed as disapproving of concerns about equal pay or the laws allegedly directed towards it.

While EPEWA’s remuneration obligation has attracted a lot of publicity, the promotion requirements pose their own unique challenges for employers. The law requires employers to inform current employees of any promotion that is further defined than any vacancy in a new or existing position that could be considered a promotion for an employee. There are certain exceptions, including notifying Colorado employees only. As a result, a multi-jurisdictional employer with no employees in Colorado can avoid this aspect of EPEWA. However, for example, the Colorado-based employer may wonder whether lower-level Colorado employees need to be made aware of an anticipated vacancy from a New York City-based CEO.

A breach of EPEWA can have real and far-reaching consequences. The law provides for fines of between US $ 500 and US $ 10,000 per violation and creates a private right to sue for wage discrimination, which allows an injured person or an employee to pay damages for up to three years in arrears.

So what to do with EPEWA if you are an employer unrelated to Colorado but interested in hiring remote workers from anywhere in the United States?

Some have clearly been conducting a public relations calculus and have chosen to circumvent the statute by banning all Colorado workers or workers from those jobs. Others have sought compliance, but in a way that does not affect their proprietary compensation systems or methods. For example, since EPEWA requires that a closed job posting contain either a rate or a rate, an employer can advertise the broadest possible rate and include a variety of qualifications related to any compensation assessment, including qualifications, experience, and geographic location. The employer is only obliged to make a good faith estimate of the scope of the possible remuneration for the posted position.

The returns on the EPEWA impact are early. The RMAR litigation remains pending and could ultimately lead to the issuance of an injunction that curtails EPEWA’s posting requirements. In the meantime, however, employers in the United States who are or may be occupied by workers in Colorado must be aware of the potential impact of EPEWA on their job posting and other hiring / promotion practices and carefully consider their options and actions as a consequence .