July 22, 2021

The Far-Reaching Implications of Colorado’s EPEWA

Colorado’s continued push to eradicate inequitable pay practices, coupled with (surprisingly) effective remote work technologies, and evolving workplace perspectives have raised unique concerns for in-state employers as well as multijurisdictional employers whose employees live and work within the state. Signed into law in 2019, and unique among the states, Colorado’s Equal Pay for Equal Work Act (EPEWA) requires employers to:

  • Disclose in every job posting “the hourly or salary compensation, or range of the hourly or salary compensation” including any benefits offered; and
  • Notify current employees – before filling an open position – if the job opening qualifies as a promotional opportunity

Traditionally considered proprietary information, an employer’s compensation scheme is an important tool used to attract top talent and gain a competitive advantage in the marketplace; the type of information one is understandably reluctant to disclose.

With an upswing in remote work options – including those that can be performed in other states (including Colorado), the EPEWA has the potential to impact employers whose open positions could be performed in Colorado (e.g., AZ employer seeking to fill open positions with remote workers must consider EPEWA disclosures if the position could be filled by a Colorado worker and/or could be viewed as a promotional opportunity for workers already employed within the state).

Push-back from Colorado employers fighting the disclosure requirement have resulted in a waiting game as initial efforts to seek a preliminary injunction failed.[1] The result? Multijurisdictional employers have simply excluded Colorado workers from open positions (e.g., “This position is available for remote work, except in Colorado”). While avoidance may be legal, it remains a risky proposition as employers excluding Colorado workers may be perceived as dismissive of pay equity concerns or the laws in effect to address them. In addition, noncompliance has its own serious financial consequences with fines ranging from $500 – $10,000 per violation coupled with a private right of action for wage discrimination (i.e., back pay damages of up to 3 years).

Still interested in hiring remote workers from anywhere in the U.S? Consider these options:

  • Conduct your own public relations risk analysis and weigh your options for excluding Colorado workers from all available job postings; or
  • Comply with the EPEWA by providing a good faith estimate of a compensation range that is reasonably broad and clearly indicates all relevant qualifiers (e.g., qualifications, geographic location, experience).

Only time will tell if further litigation efforts are successful. In the meantime, Colorado employers, and those whose jobs could be filled by Colorado workers, should consider EPEWA mandates and the risks of non-compliance.

Members seeking further information about Colorado’s EPEWA should contact Western Growers.

[1] The EPEWA disclosure requirements caused an immediate backlash of litigation spearheaded by the Rocky Mountain Association of recruiters. A preliminary injunction was denied, however litigation efforts continue.