As of Jan. 1, 2021, every employer in Colorado must abide by the new Equal Pay for Equal Work Act (EPEWA) passed by the state legislature in 2019. This law does more than bolster the federal Equal Pay Act; it fills in some of the cracks that many say have allowed the gender pay gap to continue in Colorado (and elsewhere). But, it comes with some administrative headaches for business owners.
The main thrust of the EPEWA is to ensure employers (private and public, of any size) pay the same wage rate to employees regardless of their sex OR gender identity. The EPEWA also prohibits paying a different wage rate on the basis of sex or gender identity in combination with another protected class (including disability, race, creed, color, sexual orientation, religion, age, national origin, etc.).
In addition to the prohibition on wage differentials between employees for substantially similar work, the EPEWA mandates that employers must communicate compensation and opportunities for promotion in a transparent manner, which includes:
- Posting, communicating, or otherwise making known to existing employees of new job openings, promotion opportunities;
- Posting pay ranges for the opportunity
- Keeping records of all job descriptions and wage rate histories for the employee’s term (and 2 years thereafter).
Colorado legislators did manage to carve out exceptions to paying employees, who otherwise perform substantially similar work, differently. Employers must show that the wage differential is based on one or more of the following approved factors:
- A seniority or merit system
- A system determining earnings by quality of quantity of production
- The location where work is performed
- Required travel (if the travel is regular and necessary)
- The education, training, or experience reasonably related to the work in question
Of course, the best practice of evidencing these decisions is through written records and documentation.
Why the EPEWA Matters for Employers
Simply put, this new state law provides for more avenues for employees to file lawsuits alleging wage disparity on the basis of sex. In fact, the law provides for damages to aggrieved employees that win a civil action that may include (i) the difference between the amount paid and the amount paid if there were no discrimination, (ii) liquidated damages, (iii) equitable relief, including reinstatements, promotions, and pay increases, and (iv) reasonable attorneys’ fees for the employee.
Again, the law appears to apply to every employer in Colorado. To ensure employers follow the EPEWA, the law requires employers to keep thorough records of employee salaries for up to two years after the employee leaves the company.
To find out other practical steps for Colorado employers, please reference Doida Crow Legal’s EPEWA fact sheet and checklist below. As always, our firm is available to answer any questions for business owners who want to take their companies to the next level. Call us at (720) 306 – 1001 to discuss your options with our team.