New Colorado Equal Pay Transparency Rules Go into Effect in 2024

Colorado recently finalized new Equal Pay Transparency (EPT) rules, which will implement and clarify amendments passed in June of this year to the Equal Pay for Equal Work Act (the Act). Both the amendments and the new EPT rules will go into effect on Jan. 1, 2024.

Essentially, the new rules and amendments create carve-outs for remote workers, career development and progression, and acting, interim or temporary hires. They require employers to include an application deadline in job postings and disclose information to other employees about a new hire. They also extend the statute of limitations from three to six years. These changes are discussed in detail below.

Job Opportunity Notification

The Act requires employers to make reasonable efforts to provide notice of certain job opportunities to employees. The June amendments and the EPT rules clarify some exceptions:

Remote Workers

First, the June amendments created an exception for employers physically located outside of Colorado that have fewer than 15 employees working in Colorado, all of whom are remote workers. Such employers only have to provide notice about remote job opportunities to these employees, as opposed to all job opportunities.

Exception for Career Development and Career Progression

The June amendments defined what counts as a “job opportunity” requiring notification.[1] The definition explicitly carves out “career development or career progression,” meaning that essentially, employers are not required to post information about in-line promotional opportunities.

“Career development” is a change in an employee’s compensation or duties to reflect their existing work or contributions. The EPT rules now clarify that existing work or contributions must be (1) part of the employee’s existing job, and (2) not within a position with a current or anticipated vacancy. For positions with “career progression,”[2] an employer must disclose the requirements and compensation of such progression to eligible employees. The EPT rules clarify that “eligible employees” are those that would progress to another position if the requirements were met.

Acting, Interim or Temporary Hires

The EPT rules state that no job opportunity posting is required for acting, interim or temporary (AINT) job opportunities for up to nine months if 1) the hiring is not expected to be permanent, and 2) the same or substantially similar position was not held by a different AINT hire for seven or more of the last 12 months.

Application Window

The amended Act requires employers to disclose the date the job application window is expected to close. The EPT rules clarify that a deadline is not necessary if applications are accepted on a rolling basis, as long as the job posting states that there is no fixed deadline. Employers can extend application deadlines in good faith if the posting is promptly updated.

Post-Hiring Disclosure Requirements

The amended Act also requires employers to disclose information about the candidate selected for the position to other employees with whom the candidate will work “regularly,” including the selected candidate’s name, their former and new job title, and information on how employees can demonstrate interest in similar openings in the future.

The EPT rules now clarify that “work with regularly” means employees who (1) communicate or collaborate with the new hire at least monthly, or (2) have a supervisory relationship. The rules also specify that an employer may comply by notifying employees of an individual new hire or of multiple new hires, as long as the notice is given within 30 days of each selection. The rules also carve out an exception: employers are not required to provide information that would violate the selected candidate’s privacy rights or risk their health and safety.

Wage Discrimination Provisions

Significantly, the amended Act extends the statute of limitations for wage discrimination claims from three to six years. This is a key point for employers because employees can now claim six years of back pay, rather than just three. The Colorado Department of Labor and Employment (CDLE) is also now required to create a process to accept and mediate complaints of alleged violations, and to investigate such complaints.

Employers are encouraged to review the EPT rules and proactively consult with employment counsel to ensure that their hiring and promotion practices comply with these new requirements taking effect on Jan. 1, 2024.