Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On June 5, 2023, Governor Polis Signed SB 23-105 into law, which will significantly change employers’ job posting and promotional notice obligations in Colorado. The law amends Colorado’s pay transparency statute, which has been in effect since 2021, to require employers to notify the colleagues of each new hire or promotion of the identity of the candidate and how to demonstrate interest in similar job opportunities in the future. Providing some reprieve for employers, under the amended law, employers will no longer have to provide notice to current employees of career progression promotion. In addition, until July 1, 2029, the amendments allow employers with physical locations exclusively outside of Colorado with fewer than 15 Colorado-based employees to provide their Colorado employees notice of remote job opportunities only, not all promotional opportunities company-wide. The law will take effect on January 1, 2024.
Critically, the amendment extends the recovery period for damages for wage discrimination claims under Colorado’s equal pay statute from three years to six years and requires the Colorado Department of Labor to create a process to investigate and mediate claims of wage discrimination.
Career Progression Promotions No Longer Considered “Job Opportunities” Subject to Posting
Colorado’s Equal Pay for Equal Work Act currently requires employers with at least one employee working from Colorado to: (1) include pay range, general description of benefits, and general description of other compensation for the position in all jobs they choose to post externally, which are eligible to be performed in Colorado; and (2) notify Colorado employees of all promotional opportunities company-wide, and, if the opportunity is eligible to be performed in Colorado, to include pay range, benefits, and other compensation information in that internal notice. Employers must make reasonable efforts to make known each job opportunity to all employees on the same calendar day and prior to the date on which the employer makes a selection for that position. The law’s implementing regulations broadly defined promotional opportunity to include in-line or career progression promotions.
The revised law eliminates the in-line promotional opportunity posting requirement by specifying that a “job opportunity” subject to internal posting rules exists only when an employer has a “vacancy,” meaning an opening from a newly created or vacated position. “Job opportunity” does not include “career development,” meaning changes to employees’ terms of compensation, benefits, full-time/part-time status, duties, or changes in title or compensation reflecting past performance. The revisions also exclude “career progression,” which is defined as movement from one position to another based on time in a specific role or other objective metrics, from the definition of “job opportunities” that must be posted.
Under the amendments, employers must include in their external postings and promotional notices the date the application window is expected to close.
Employers Must Internally Announce New Hires and Promotions
Effective January 1, covered employers will be required to make reasonable efforts to announce, post, or otherwise make known the identity of the selected candidate for each job opportunity within 30 calendar days after the selected candidate’s start date in that new role. This notice must be provided to, at minimum, the employees with whom the selected candidate is intended to work. The announcement, post, or other type of notice must include all of the following information:
- The name of the selected candidate;
- The selected candidate’s former job title, if the selection was internal;
- The selected candidate’s new job title; and,
- Information on how employees may demonstrate interest in similar job opportunities in the future, including identifying individuals or departments to whom the employees can express interest in similar job opportunities.
In addition to the above, where a position has a defined “career progression,” employers will have to disclose and make available to all eligible employees the requirements for career progression, along with each position's terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement.
The law specifies that it does not require an employer to identify a selected candidate in any manner that violates the candidate’s privacy rights under applicable law or in a manner that would place at risk the selected candidate’s health or safety.
As drafted, this notification requirement has no geographic limitation; that is, it does not state it is limited to new hires or promotions awarded to candidates working from Colorado. On its face, the requirement appears to apply to any job opportunities a covered employer awards company-wide.
Limited Exemption for Employers with No Physical Office in Colorado and Under 15 Remote Employees
Effective January 1, employers with physical locations exclusively outside of Colorado with fewer than 15 Colorado-based employees, all of whom work remotely, will be required to provide their Colorado employees notice of remote job opportunities only, not all promotional opportunities company-wide. This provision will sunset July 1, 2029.
Expanded Statute of Limitations and Enforcement of Wage Discrimination Claims
Colorado’s equal pay statute prohibits pay discrimination based on sex or sex plus another protected status and allows employers to use only a limited set of factors to explain wage disparities. Effective January 1, 2024, employees may recover back pay for violations going back six years, rather than three. Claims still must be brought within two years of the alleged violation.
Additionally, the amended law requires the Colorado Department of Labor to create a process to investigate and mediate claims of sex-based wage discrimination.
The Colorado Department of Labor and Employment is expected to issue new rules implementing the revised law ahead of the January 1, 2024 effective date. In the meantime, employers should evaluate which positions they will be able to start excluding from the notice requirement as career progression, and develop a plan for notifying the colleagues of promoted and newly hired employees.