As far as equal-pay laws go, Colorado’s Equal Pay for Equal Work Act will be one of the toughest when it goes into effect Jan. 1, 2021.
Employers at the moment have about a year to get things right, including making sure their notices are in order.
In the simplest terms, each job posting will need to include the hourly or salary compensation being offered, along with a general description of all the benefits and other compensation being offered.
The idea, of course, is to close the gender pay gap. Without getting into any arguments about the “why,” the fact is that Colorado women as a whole make 86 cents for every $1 men earn.
Specifically, the bill prohibits Colorado employers from discriminating on the basis of sex by paying employees of different genders differently for substantially similar work — regardless of job title — based on a composite of skill, effort (which may include consideration of shift work) and responsibility.
Bosses also cannot ask a job applicant for their salary history or retaliate against those who refuse to say how much money they have made.
In another big change, employers won’t be able to prevent employees from discussing their own compensation information with other employees or require employees to sign a waiver preventing them from discussing their compensation.
Closing the pay gap won’t happen overnight, and the new law does allow employers to justify differences in pay if they can be linked to certain factors such as seniority or merit systems, location, and systems that measure earnings by production quality or quantity.
Employers who violate the pay-equity law will have to pay the difference between what the employee was paid and would have been paid had there been no discrimination, plus an equal amount in liquidated damages, for up to three years.
In addition, employers may be fined between $500 and $10,000 per violation.
So, what should employers be doing between now and when the law goes into effect?
We suggest conducting pay equity audits of your workforce and correcting any unexplained discrepancies.
Also, employers will need to start preparing job descriptions and salary ranges for each position, as well as establishing internal processes for publicizing promotional opportunities in their organizations.