On September 29, 2020, The Colorado Department of Labor and Employment published proposed Equal Pay Transparency Rules (“EPT Rules”) providing guidance for implementation of the state’s new Equal Pay for Equal Work Law set to go into effect January 1, 2021.  They also published a corresponding Statement of Basis, Purpose, Specific Statutory Authority and Findings.

The proposed rules address two general areas of the new pay law:

1. Complaint, Investigation and Appeal Procedures

The proposed rules seek to set out the process for investigation procedures and protections and provides in depth detail for the process of complaint filings, service and deadlines, determinations and appeals.  The rule draws primarily from the Wage Protection Act Rules that govern the wage complaint process in Colorado.

1. Job Posting Requirements

One of the most debated areas of the new law centers around the unique obligation for Colorado employers to provide compensation information and description of benefits on their job postings as well as make opportunities for promotions known to their employees.

The proposed rules provide additional guidance around the how employers can comply with the compensation disclosure requirement by instructing that

“Employers must include the following compensation and benefits information in each posting: (1) the hourly rate or salary compensation (or a range thereof) that the employer is offering for the position, including any bonuses, commissions, or other forms of compensation that are being offered for the job; and (2) a general description of all employment benefits the employer is offering for the position, including health care benefits; retirement benefits; any benefits permitting paid days off, including sick leave, parental leave, and paid time off or vacation benefits; as well as any other benefits that must be reported for federal tax purposes; but not benefits in the form of minor perks.”

The proposed rules go on to explain that

“[a] posted compensation range may extend from the lowest to the highest pay the employer in good faith believes it might pay for the particular job, depending on the circumstances. An employer may ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.”

With respect to promotional opportunities, the propose rules suggest that to comply with the requirement to make “reasonable efforts” to announce, post or otherwise make known all opportunities for post or otherwise make known all opportunities for promotion to all current employees . . .” the communication

“must be in writing and include at least (A) job title, (B) compensation and benefits per Rule 2.2, and (C) means by which employees may apply for the position.”

The proposed rule includes a description of “reasonable efforts” and explicitly states employers “may not limit notice to those employees it deems qualified for the position, but may state that applications are open to only those with certain qualifications.”

In the last section, the proposed rules provide much needed guidance on application of the notice requirement to positions to be performed outside of Colorado.  In the proposed rules the Department takes the position that for a role to be performed in Colorado “if the employer accepts applicants from outside Colorado, it must notify all of its employees in any state for whom the job would be a promotion” as well as include compensation and benefits on the posting.  The rules also proposes that if a Colorado employer has a job that can be performed anywhere (e.g. remote) or outside of Colorado, but posts the job by electronic means accessible in Colorado it must include compensation and benefits in the postings. The company must also notify its employees for whom the job would be a promotion.  Essentially, if a Colorado employee (or resident) can apply for the position (even if the role is outside of Colorado) the posting must comply with the transparency regulations.

As a reminder, these are proposed rules and subject to revision based on public comment.  As currently scheduled, the rules will be finalized just prior to the law’s January 1 effective date.