What Employers Need to Know About Colorado’s Equal Pay for Equal Work Act

The Colorado General Assembly enacted the Colorado Equal Pay for Equal Work Act (the Act) in 2019, it became effective on January 1, 2021, and underwent significant amendments in 2023 which became effective on January 1, 2024. The Act aims to close gender pay gaps and to ensure employees with similar job duties are paid the same wage rate regardless of their gender identity. It is divided into two parts. The first part prohibits employers from wage discrimination based on an employee’s gender identity. The second part of the Act requires transparency in pay and job opportunities and includes job posting and promotional notice requirements. The Act is enforced by Colorado’s Division of Labor Standards and Statistics (Division), which investigates complaints against employers concerning unequal pay and transparency in pay and employment opportunities. Individuals also have a private right of action against an employer.

Failure to comply with the Act may result in significant monetary fines by the state, damages payable in a private civil action, and charges for civil rights violations. Since the Act took effect in 2021, the Division reports that 2,860 complaints have been filed against employers resulting in citations totaling $841,500.00 in fines to date. To avoid public and private liability, it is imperative that employers understand their obligations under the Act, which are summarized below.

Wage Discrimination Based on Gender Identity Prohibited

The first part of the Act seeks to curb wage discrimination based on the gender identity of an employee.

Wage Discrimination Based on Gender Identity Prohibited. The Act prohibits an employer from discriminating between employees based on an employee’s gender identity or on an employee’s gender identity in combination with the employee’s disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, religion, age, national origin, or ancestry, by paying an employee of one gender identity less than the rate paid to an employee of a different gender identity for substantially similar work. This prohibition does not apply, however, where an employer can demonstrate each of the following:

• • That the wage rate differential is based on:
    • 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 that they are reasonably related to the work in question; or
    • Travel, if travel is a regular and necessary condition of the work performed; 
  • That each factor relied on (listed in the first bullet point above) is applied reasonably; 
  • That each factor relied on (listed in the first bullet point above) accounts for the entire wage rate differential; and 
  • That prior wage rate history was not relied on to justify a disparity in current wage rates. 

Additional Prohibitions. An employer is further prohibited under the Act from:

• • Seeking the wage rate history of a prospective employee or relying on the wage rate history of a prospective employee to determine a wage rate;
  • Discriminating or retaliating against a prospective employee for failing to disclose the prospective employee’s wage rate history;
  • Discharging, or in any manner discriminating or retaliating against, an employee for invoking these additional prohibitions on behalf of anyone or assisting in the enforcement of these prohibitions;
  • Discharging, disciplining, discriminating against, coercing, intimidating, threatening, or interfering with an employee or other person because the employee or person inquired about, disclosed, compared, or otherwise discussed the employee’s wage rate;
  • Prohibiting, as a condition of employment, an employee from disclosing the employee’s wage rate; or
  • Requiring an employee to sign a waiver or other document that:
    • Prohibits the employee from disclosing wage rate information; or
    • Purports to deny the employee the right to disclose the employee’s wage rate information.

Enforcement and Complaints. The Act is enforced by Colorado’s Division of Labor Standards and Statistics (Division), which investigates complaints against employers concerning unequal pay. Anonymous tips about unequal pay based on gender identity as well as complaints about unlawful unequal pay based on gender identity may be filed with the Division online or in person. Complaint forms and directions for filing tips and complaints are found on the Division’s website.

In addition, an employee aggrieved by an employer’s violation of this part of the Act may file a private civil action against the employer in district court and may also file civil rights charges with the Colorado Civil Rights Division.

Employer Liability. Employers who violate this part of the Act may be liable for economic damages, liquidated damages, and the employee’s reasonable attorney fees and costs. In addition, an employee may be entitled to other legal and equitable relief such as employment, reinstatement, promotion, pay increase, and payment of lost wage rates. However, an employer may not be liable for liquidated damages if it can demonstrate that the act or omission giving rise to the violation was in good faith and the employer has reasonable grounds for believing that the employer did not violate the prohibition. In determining whether the employer’s violation was in good faith, a court or jury may consider evidence that within two years prior to the date of the commencement of the civil action, the employer completed a thorough and comprehensive pay audit of its workforce, with the specific goal of identifying and remedying unlawful pay disparities.

Pay and Job Opportunity Transparency

The second part of the Act requires transparency in pay and job opportunities for all job candidates and employees.

Before selecting a candidate. An employer must post a “job opportunity” on the same day both inside and outside the company. A “job opportunity” is defined as a current or anticipated vacancy or newly created position for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts. A “job opportunity” does not include career development or career progression. “Career development” means a change to an employee’s terms of compensation, benefits, full-time or part-time status or duties, or an update to an employee’s job title or compensation to reflect work performed or contributions already made by an employee. “Career profession” means a regular or automatic movement from one position to another based on time in a specific role or other objective metrics.

When posting a job opportunity, an employer must in good faith include the following information:

• Specific compensation information such as the hourly rate or salary or range of the hourly rate or salary;
• A general description of the benefits and other compensation applicable to the job opportunity; and
• The date the application window is anticipated to close. 

If, however, an employer is only physically located outside of Colorado and has fewer than 15 employees working in Colorado, all of whom work only remotely, then, through July 1, 2029, the employer is only required to provide notice of remote job opportunities.

After selecting a candidate. Within 30 days after the selected candidate begins working in the position, the employer must make reasonable efforts to announce, post, or otherwise make known to the employees with whom the selected candidate is expected to work:

• • The name of the candidate selected for the job;
  • The selected candidate’s former job title if selected while already employed by the employer;
  • The selected candidate’s new job title; and
  • Information on how employees may demonstrate interest in similar job opportunities in the future, including identifying individuals or departments to whom the employees can express interest in similar job opportunities.

For positions with career progression, the Act requires an employer to disclose and make available to all eligible employees the requirements for career progression, in addition to each position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement.

However, the law does not require employers to identify a selected candidate for a job opportunity in any manner that violates the candidate’s privacy rights or would place the candidate’s health or safety at risk.

Record Keeping. The Act requires employers to keep records of job descriptions and wage rate history for each employee for the duration of the employment plus two years after the end of employment to determine if there is a pattern of wage discrepancy. 

Enforcement and Complaints. The Division enforces this part of the Act as well. It investigates complaints and issues citations related to an employer’s violation of the Act’s transparency in pay and employment opportunities provisions. Tips and complaints about a specific violation of the Act may be filed with the Division online or in person within one year after the date that the person learned of the violation. Again, complaint forms and directions for filing tips and complaints are found on the Division’s website.

Employer Liability. An employer who violates this part of the Act may be fined no less than five hundred dollars and no more than ten thousand dollars per violation by the Division. In certain circumstances, failure to keep required records may also result in a rebuttable presumption that records not kept as required contained information favorable to the employee’s claim and can be considered evidence that the violation was not made in good faith. 

Our Team 

BHGR’s Employment Group is well-versed in state and federal employment laws and regulations and routinely counsels clients on compliance issues. Contact us today if your business has questions about the Act or taking steps to comply with the Act and mitigate liability exposure.