Colorado’s confusing pay disclosure law is leaving remote workers out of a job
Employers aren’t reading the fine print and excluding Coloradans.
The state’s Equal Pay for Equal Work act, which went into effect of January this year, has had some unforeseen consequences.
The act, which was supposed to increase transparency and equity in hiring practices, has one provision that employers are trying to circumvent: Pay compensation has to be included in all job postings.
According to the bill, employers must disclose hourly or salary compensation (either a specific number or a range), plus a general description of benefits for each listing.
As a result, businesses with Colorado ties (even just a few existing employees) have to follow those guidelines when posting job listings for remote work. Colorado is the only state with a rule like this, and at a time when remote work is more common than ever, employers’ misunderstanding of the law is leading some to cut Coloradans out of applicant pools completely.
While job postings excluding Coloradans are rare (the Colorado Department of Labor and Employment, or CDLE, estimates they make up less than 1 percent of postings), most of the infractions are coming from inside the state, at companies with Colorado headquarters, offices or staff.
“We recently sent letter notices to two dozen employers, explaining the need for the required pay disclosures for remote jobs,” said Scott Moss, who leads the labor statistics arm of CDLE. Two-thirds of those employers have a Denver presence. That figure rises to 90 percent if you include nearby suburbs and small cities.
Infractions could cost employers down the line – fines are at least $500 each and can go up to $10,000 per citation. CDLE has not started pursuing formal investigations yet, aiming to clarify information for employers and give them a chance to update job postings.
The state law doesn’t affect companies without a Colorado presence, even if Coloradans apply for a remote job opening.
Moss stressed that “pay disclosure can be implemented flexibly, often with little change to existing practices.” There’s no special format needed to comply, and the compensation information can be very brief and list a flexible salary range. Companies with Colorado staff can’t circumvent the disclosure law by excluding Coloradans from their hiring pools, because the requirements apply to any business with Colorado ties, not just companies hiring Coloradans.
In a written statement to Denverite, the Denver Metro Chamber of Commerce said they still support the law, although they “consistently expressed concerns that the rules impose burdens for employers.” They said the regulations “are incredibly complex and confusing, which is likely why we’re seeing inconsistent application from businesses and non-profits as they strive to fully comply with the law.”
The Chamber identified issues with the bill’s pay disclosure language early on, and attempted to work with sponsors to change it during drafting, according to an article from Colorado Politics.
Follow this link to read a summary of the law (or the whole bill, if that’s your thing).
Correction: This story was updated to reflect that the law is statewide, not just in Denver.