The Colorado pay transparency law was the nation’s first of its kind.
And with the rise of these laws in recent years — including the potential for federal-level legislation — it makes sense to revisit pay transparency in Colorado, its obligations for employers and how it has influenced statutes elsewhere.
Pay Transparency Laws
Colorado Pay Transparency
In 2021, Colorado’s pay transparency law went into effect. It applies to virtually all employers in the state.
Though there were some precursors to pay transparency laws — namely providing salary ranges upon request or at a certain point in the hiring process, as well as salary history bans — Colorado’s was the first to require salary ranges in job postings.
Since then, of course, other jurisdictions have followed suit in terms of job-posting requirements, including:
The Colorado pay transparency law also survived a legal challenge from a recruiters association, which filed a lawsuit in December 2020, just days before the act was set to go into effect. Still, the law was upheld and set the course for future legislation.
At a high level, the Colorado pay transparency law requires employers to:
- Provide hourly or salary compensation, or a range, in all job postings
- Include a general description of all benefits and other compensation
- Make “reasonable efforts” to alert existing employees of promotion opportunities
- Provide all compensation for positions (healthcare benefits, retirement, paid time off, etc.) in job posts
Employers must also provide a salary range to applicants by the time they extend an offer of compensation — even if the applicant did not request it.
Meanwhile, these requirements also extend to jobs that may be performed outside the state but “could be” done in Colorado, which is noteworthy considering the rise of remote and hybrid positions in recent years.
In somewhat of a quirk, an employer with no current employees in Colorado has no obligations under the law until they employ an employee in the state.
Lastly, the Colorado pay transparency law also includes recordkeeping requirements.
Pay Transparency Laws
So, what’s up with pay transparency laws?
These are relatively new regulations that require employers to disclose information about employee compensation, either to existing employees or potential hires. They take many forms.
The specific requirements of these laws vary depending on the jurisdiction, but they generally aim to promote fairness and reduce pay disparities based on factors like gender, race and ethnicity.
Depending on the jurisdiction, these laws require employers to:
- Provide applicants with the salary range for a posted position at a specified point during the hiring process
- Provide employees salary range upon request, when changing jobs, or upon hire
- Include salary range in job postings or promotional opportunities (less common than other types of pay transparency laws, but the future may bring more)
Several jurisdictions have passed pay transparency laws, which may require employers to disclose salary ranges for open positions, prohibit retaliation against employees who discuss their pay with colleagues, or require employers to report pay data to government agencies. (See the link below for an in-depth webinar on pay transparency laws.)
Jurisdictions with pay transparency laws include:
- California – effective Jan. 1, 2023
- Colorado – effective Jan. 1, 2021
- Connecticut – effective Oct. 1, 2021
- Maryland – effective Oct. 1, 2020
- Nevada – effective Oct. 1, 2021
- Jersey City, N.J. – effective April 13, 2022
- Ithaca, N.Y. – effective Sept. 1, 2022
- New York City – effective Nov. 1, 2022
- Westchester County, N.Y. – effective Nov. 6, 2022
- Cincinnati – effective March 13, 2020
- Toledo, Ohio – effective June 25, 2020
- Rhode Island – effective Jan. 1, 2023
- Washington – effective Jan. 1, 2023
Webinar: Clear as Mud – How to Comply with Pay Transparency Laws
While the Colorado pay transparency law has been on the books for a couple of years, there has been a recent trend in other jurisdictions passing these types of bills.
And, as is always the case with employment law, each jurisdiction handles pay transparency a bit differently. Employers should research the laws where they have locations to ensure compliance.