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May 28, 2019

Colorado Equal Pay Act Signed into Law

On May 22, 2019, Colorado Governor Polis signed the “Equal Pay for Equal Work Act” into law, one of the toughest state pay equity laws in the country.  Under the new law, employers are prohibited from paying an employee of one sex (including gender identity) a wage rate less than the rate paid to an employee of a different sex (or gender identity) for “substantially similar work,” when viewed as a composite of skill, effort, and responsibility and regardless of job title, except where the employer demonstrates that the wage differential is based on at least one of the following:

  • a seniority system
  • a merit system
  • a production-based system;
  • the geographic location where the work is performed;
  • education, training or experience, to the extent they are reasonably related to the work in question;
  • travel, if a regular and necessary condition of the work;

The new law imposes two new notice requirements for Colorado employers. First, employers must make reasonable efforts to publicize all opportunities for promotion to all current employees on the same calendar day. In addition, employers must disclose in each posting for each job opening the hourly or salary compensation or pay range, and a general description of all benefits and other compensation offered.

Aggrieved employees may pursue a civil lawsuit, pursue administrative relief through the Colorado Civil Rights Commission, or avail themselves of an administrative mediation process.

Successful plaintiffs may recover up to three years of back pay and liquidated (double) damages, equitable relief (e.g., reinstatement, promotion) and attorneys’ fees. 

The Colorado law provides a limited safe harbor for employers who conduct proactive self-audits of their compensation practices. Employers who conduct a “thorough and comprehensive pay audit” within two years of the complaint may avoid an award for liquidated damages.

Similar to California law, Colorado law employers may not:

  • Seek the wage history of a prospective employee;
  • Rely on the wage history of a prospective employee to determine a wage rate; or
  • Discriminate or retaliate against a prospective employee for failing to disclose wage history.

The new law also prohibits employers from preventing their employees from discussing their compensation information with others or requiring employees to waive their rights to do the same.

The law applies to all employers employing any employees in Colorado and goes into effect January 1, 2021. Colorado employers should prepare for the new law by reviewing their pay policies and practices with employment counsel.  Employers should also consider conducting a proactive self-audit and remedying any unintentional or unlawful pay disparities in order to take advantage of the limited safe harbor.