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Colorado’s New Equal Pay Legislation

New Colorado Law Responds to Workers’ Discrepancy in Wages by Gender

Gender-based pay disparity is nothing new. In Colorado, women still earn just 86% of what their male counterparts earn, on average. Notably, this figure does not delineate black or Latina women, who earn an average of just 63.1% and 53.5% of what their white male counterparts make, respectively.

For several years, Colorado lawmakers have been working to address gender-based disparity at the state level. In May, their efforts were rewarded when Governor Jared Polis signed Senate Bill 19-085 into law.

What Is Senate Bill 19-085?

SB 19-085 was introduced to help close the gender-based pay gap in Colorado. The bill, which will take effect in 2021, includes some important requirements for all Colorado employers. Put simply, the bill restricts:

  • Discriminating between employees on the basis of sex or on the basis of sex in combination with another protected status by paying an employee of one sex less than an employee of a different sex for substantially similar work (already illegal under federal law)
  • Asking for prospective employee’s wage history and retaliating against a prospective employee who refuses to provide wage history
  • Retaliating against employees who ask about their wages or seek to compare their wages to those of other employees
  • Prohibiting employees from discussing or disclosing their wages (already illegal under federal law)

However, the parts of the bill that are attracting the most attention pertain to litigation. The bill “allows employees who believe they are being paid less due to their gender to file a civil lawsuit within two years.”

In addition, if an employer is found to have paid an employee less because of their gender, the employer must retroactively compensate the employee, paying them the amount of money they would have made over the past three years without discrimination.

Good Faith

While the bill technically opens the door for litigation, it also includes a good faith exception that may decrease the likelihood of such litigation. In addition to familiar exceptions based on things like geographic location, seniority, merit, regular travel, education, and experience, the good faith exception directs courts not to award additional payments to employees if the difference in wage was unintentional. Usually, an employer can prove good faith in the completion of thorough pay audits in the years before being sued.

Given the good faith exception and the other exceptions listed above, and given the other statutory avenues for litigation at the federal level, SB 19-085 will likely serve as an encouragement to employers to rectify any current pay disparities now, rather than an invitation for future lawsuits.

What You Should Do

Under SB 19-085, district employers must announce employment advancement opportunities, job openings, and pay ranges for openings to all employees. Failure to do so may result in fines for each violation.

District employers are also required to maintain records of job descriptions and wage rate history for each employee while employed and for two years after the employment ends. Failure to maintain these records creates a rebuttable presumption, in a lawsuit alleging wage discrimination based on sex, that the records not maintained contained information favorable to the employee’s claim.

A top priority in implementing the new legislation is to address potential pay disparities in your district, not only to avoid potential litigation, but to ensure ethical business practices. It’s important to conduct regular, detailed pay audits, paying close attention to any unexplained differences between counterparts of different genders.

Another best practice is to review your personnel manuals to ensure that your district’s policies reflect the new law. If you have questions about how to implement this type of audit, how to avoid pay disparity at your district, or how to update your personnel manual, you can talk to a dedicated legal expert through our HR Helpline. We also provide 10 hours of free HR consultation to all Pool members.

If you have questions about how to establish ethical equal pay practices in your district, don’t hesitate to contact us. We’re here to help.