Pay Equity Legislation - Colorado is Joining the Party!

Latinas are paid only 53.5 cents and Black women are paid only 63.1 cents on the dollar relative to white men, according to the Colorado Equal Pay for Equal Work Act, which goes into effect January 1, 2021. The Colorado gender wage gap is 86% overall.

Last year Colorado jumped on the equal pay bandwagon with legislation that closely mirrors, and in fact appears even more comprehensive, than that of employment law frontrunner California. Full law here.

The law is a comprehensive step in closing the gender pay gap, and significantly elevates pay equity as a key issue for employers to address now.

Key elements of the law:

• No wage discrimination: Employers are prohibited from paying differing wages based on an employee's sex or on the basis of sex in combination with another protected status (disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry) unless one of the statutory exceptions apply (exceptions include ability to pay differently based on seniority, "merit", quantifiable work production, geography, eduction/training/experience, travel)
• No asking candidates for historical comp: Employers cannot seek or rely on historical employee wage information for determining future wage. (Similar to what went live in California 1/1/18)
• No retaliation: Employers cannot retaliate, discriminate against or fire employees for asserting the rights in the act
• New job compensation transparency: Employers must announce to all employees employment advancement opportunities and job openings, and the pay range for the openings
• Extensive record keeping: Employers must maintain records of job descriptions and wage rate history for reach employee for the duration of their employment, plus two years
• Internal pay equity audit: Conducting an internal pay audit and subsequent remediation efforts, while not legally required, provides employers with a two-year safe harbor against employee claims.

What to do:

1. Don't ask: Create a basic handout for your recruiters and hiring managers that includes direction not to ask candidates about current compensation. They can still ask, "what are you targeting for comp?" and that can be important to ensuring there are aligned expectations.
2. Market data --> comp bands: Create internal compensation bands by level if you haven't already done so. (See section that says "Use Data to Make New Hire Offers" in this article). You'll need to start using those as you post new jobs, both publicly and for determining an individual's exact pay.
3. Invest in a decent tech stack: You'll need a good applicant tracking system (ATS) such as Greenhouse or Lever, and a human resources information system (HRIS) to facilitate data collection and retention.
4. Consider completing a pay equity audit now: Using internal data, assess whether there are illegal pay gaps that exist by gender, race or any other protected group. If there are, determine the cost for closing the gap and remediate. Although the law doesn't strictly require this, doing so provides safe harbor, and is an important part of an ongoing comprehensive pay equity program (see "Check that the system is working" in this article). Start the work now. Digital tools to consider are Pipeline Equity, Compa.as, Trove, and Syndio. (Neither I nor my firm have any investment in any of these service providers)

Disclaimer: I am not an attorney and this article should not be construed or used as legal advice. For any matters related to employment law and pay equity, including the subject of this post, I encourage you to consult your own legal counsel.