New Law for the Promotion of Equal Pay

New Law for the Promotion of Equal Pay – Senate Bill 19-085: Equal Pay for Equal Work Act

Despite the passage of the federal Equal Pay Act of 1963, which made it unlawful to engage in pay discrimination based on sex, women still tend to earn significantly less than their male counterparts for the same work.  In an effort to bolster the state’s pay-equity regulations, the Colorado legislature passed Senate Bill 19-085, entitled the “Equal Pay for Equal Work Act” (the “Act”), C.R.S. § 8-5-101, et seq.  The Act, which takes effect on January 1, 2021, will impose a host of new regulations upon employers and make it easier for aggrieved employees to access the courts.  Some of the most significant changes are as follows.

A.  New Regulations.

Part 1 of the Act makes it unlawful for an employer to discriminate on the basis of sex by paying an employee of one sex a wage less than the rate paid to an employee of a different sex for substantially similar work, regardless of the employees’ job titles, unless the employer can prove each of the following elements:

1. that the differing wages have resulted from: a seniority system; a merit system; a system that measures earnings by quantity or quality of production; differing geographic locations where the work is performed; differing levels of education, training, or experience to the extent that they are reasonably related to the work in question; or travel, if the travel is regular and necessary condition of the work performed;
2. that the employer applied the factors described in paragraph (1) in a reasonable manner;
3. that the employer relied entirely upon the factors described in paragraph (1) and that such factors account for the entire wage difference; and
4. that the employer did not rely upon the employee’s historic wage rate to justify a disparity in the employee’s current wage rate.

Part 1 of the Act also prohibits employers from:

1. Asking job applicants for their wage history;
2. Relying on wage rate history to determine a wage rate;
3. Discriminating against  job applicants  for  failing  to  disclose  their wage  rate history;
4. Discriminating against an employee for invoking the Act on behalf of themselves or another employee, or for assisting in the enforcement of the Act;
5. Discharging,  disciplining,  discriminating  against,  threatening,  coercing, intimidating, or interfering with an employee or other person because they inquired  about,   disclosed,   compared,  or  otherwise  discussed  the employee’s wages;
6. Prohibiting employees from disclosing their wage rates; or
7. Requiring employees to sign a waiver or other document that prohibits the employee from disclosing wage information, that purports to deny employees the right to disclose wage information.

Part 2 of the Act (C.R.S. § 8-5-201, et seq.) pertains to “Transparency in Pay and Opportunities for Promotion and Advancement.”  As its title suggests, this portion of the Act regulates employers’ promotion practices by requiring employers to make reasonable efforts to post all opportunities for promotion to all employees, prior to making a promotion decision.  For each open job position, an employer must provide a general description of the position, and the salary, compensation, or range of compensation for the position.  Although they are not subject to civil liability, the Colorado Department of Labor and Employment may fine an employer in violation of Part 2 of the Act in an amount no less than $500 and no more than $10,000 per violation.

B.  Access to the Courts

In addition to forming new laws prohibiting discrimination, the Act also removes the authority of the Colorado Department of Labor and Employment to enforce wage discrimination complaints.  Instead, beginning in 2021, an aggrieved employee will be allowed to bring a civil action against the employer in district court.

An employer who violates any of the provisions of Part 1 of the Act may be held liable for economic damages in the amount equal to the difference between the amount that the employer paid to the complaining employee and the amount that the employee would have received had there been no violation.  Importantly, an aggrieved employee is also entitled to an award of liquidated damages in an amount equal to the employee’s economic damages.

Employers who have questions regarding their current pay policies and practices or need to change their policies should contact Cinthia Manzano.