Concrete Change: How Colorado Business
Owners Can Navigate the 2021 Equal Pay for Equal Work Act
Owners Can Navigate the 2021 Equal Pay for Equal Work Act
Hire With Ease
I can’t believe it’s the middle of 2021 already. As we have seen businesses start to rebound from Covid, some of you may just be starting to think about adding staff for the first time since we rolled into 2021.
If your business is located in Colorado, it’s important that you are aware of some big changes that have gone into effect this year. One of the biggest changes to Employment Law is Colorado’s new Equal Pay for Equal Work Act (EPEWA)., which prohibits gender-based pay discrimination and imposes strict requirements for job postings and equal pay transparency.
Why Colorado Needs the Equal Pay for Equal Work Act
EPEWA was introduced because, even today, there is still wage inequality between women and men. This law is meant to narrow and eliminate that wage gap. According to a report released in March 2018 by the Institute for Women’s Policy Research and The Women’s Foundation of Colorado, women in Colorado have seen slight improvements to the average earnings of 81 cents on the dollar. Women in this state earn 86 cents for every dollar men earn; Latinas earn 53.5 cents and black women earn 63.1 cents for every dollar.
Unfortunately, women’s pay gaps have worsened over that time for women of color. According to a study done by the Women’s Foundation of Colorado,
“the earnings gap has worsened since 2015 for Hispanic (53.8% to 53.5%), black (65.5% to 63.1%), and multiracial women (68.1% to 63.7%) in comparison to white men’s earnings. (The number of) Colorado women living in poverty has increased during the same time period from 13% to 14.3%.”
What should Colorado Business Owners know about the EWEPA?
Under the Colorado Equal Pay Transparency Rules (EPT Rules), effective January 1, 2021, Colorado employers must be more transparent about pay and promotional opportunities for their employees. We’ve rounded up a list of Frequently Asked Questions about the law to break down how it will apply to your business.
1. “Does My Business have to follow the EPT Rules?”
Unless your business is an army of one, the EPT Rules apply to you. The new law applies to all employers with at least one employee in Colorado, and there are no exceptions to this rule. The law’s core purpose is to address systemic inequities within Colorado institutions.
2. “What are ‘promotional opportunities?’ Isn’t that marketing?”
While it sounds like it could be about marketing, a “promotional opportunity” is the phrase lawmakers used to make sure they covered all the ways a potential employee can be offered a new position or advancement with their current employer. They intentionally chose “promotion” because it encompasses already existing positions. More specifically, they intend the term to be applied to any of the following:
- Any new positions added to a growing business
- Backfilling any existing position within the company
- When the business offers an existing employee a new position. This includes changing their title, authority, duties, or material trajectories, such that this new position is considered superior to another job held by at least one employee in that same company in terms of compensation, status, opportunities, benefits, duties, or ability to obtain further career advancement.
The EPT rules must be applied to all of these promotional opportunities, regardless of the physical location of the new role. This has created some unintended consequences for large corporations that are not based in Colorado that want to hire Coloradoans to work remotely. In recent months, we’ve seen language in job listings that exclude Colorado citizens from remote opportunities to avoid complying with the law. This trend is certainly an indication of the need for such legislation around the country.
3. “I want to follow the EPT rules, but I’m afraid I’ll forget something. What should I include in my promotional opportunity.”
Don’t worry! When in doubt, refer back to this document written up by the U.S. Department of Labor that outlines what should be included in a job posting. You are not required to post jobs externally, but must create written notice of those “promotional opportunities” to Colorado employees.
Your posting should be in writing and should include the following:
- A reasonable time to apply for the role.
- The job’s title
- The wage rate or range (lowest to highest pay) that the employer believes it might pay, depending on the circumstances and based on good faith.
- A description of other types of pay that are being offered for the job.
- A description of benefits the employer is offering for the job, including healthcare benefits, retirement benefits, any benefits permitting paid days off (including sick leave, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes
- The means for employees to apply for the job.
We also wrote a blog about how to write a great job ad, which will lead you in the right direction.
4. “What happens if my company doesn’t follow the EPT rules?”
If these EPT rules are broken, employers face potential fines! Your company could be charged between $500 and $10,000. These amounts are designed to make it unattractive to try to pay women and other marginalized groups less.
Best Practices to Achieve Wage Transparency
As a woman-owned business in Colorado, wage transparency is a topic that is close to my heart. Below are some best practices to ensure that your business is operating within the law.
1. Allow Access to Relevant Data
Businesses will often refer to market data to set their own pay levels for any given position. Providing your managers with the information you used to create their wage will empower them to make a decision that is best for them. This approach creates trust within the company that is often just as enticing as a competitive salary.
2. Build Out a More Specific Pay Statement
Fortifying written compensation communication with quantitative data can improve understanding within the company. Try using big picture data like market benchmarks, and logic, or even data related to your business’s results and future plans and goals.
3. Lead Structured Conversations About Pay Within Your Organization
Do your best to speak clearly and authoritatively on the subject with managers and lower-level employees. Many have never been in a situation where they’ve determined pay, so education on the subject is useful. Consider providing training, tools, or other educational resources, so that your company has a thorough understanding of the pay structure from the top-down.
Do you still have questions about the EPEWA? If so, consider reaching out for a free consultation about your hiring needs. Additionally, Hire With Ease’s HR-On Demand service provides 24/7 access to online HR tools and live advice during business hours with one of our HR consultants – starting at $69 per month, with no long-term contracts.
Camardella, Matthew J., et al. “Patchwork of Pay Transparency Laws Continues to Evolve.” The National Law Review, 4 March 2021. www.natlawreview.com/article/patchwork-pay-transparency-laws-continues-to-evolve .
People Fluent Staff. “Understanding and Achieving Greater Pay Transparency: 4 Best Practices for Bold Organizations.” People Fluent, 9 April 2019. www.peoplefluent.com/blog/compensation/understanding-and-achieving-greater-pay-transparency-4-best-practices/.
This is an excerpt from an article originally published in the May 2018 issue of Workspan Magazine, a publication of WorldatWork. It has been reprinted with permission.
United States, Congress, Division of Labor Standards and Statistics. Equal Pay Transparency Rules (“EPT Rules”) 7 CCR 1103-13, Colorado.gov, 1 November, 2020. https://cdle.colorado.gov/sites/cdle/files/7%20CCR%201103-13%20Equal%20Pay%20Transparency%20Rules%20ADOPTED%20%28Clean%29_0.pdf
Ongweso, Edward. “Why Corporations Won’t Hire Remote Workers in Colorado.” Vice.com, Motherboard; Tech by Vice, 26 May 2021. www.vice.com/en/article/m7egp8/why-corporations-wont-hire-any-remote-workers-in-colorado.
Hire With Ease Staff. “How To Write A Great Job Ad.” Hire With Ease, 29 April, 2021. www.hirewithease.com/how-to-write-a-great-job-ad-2/.