How an Equal Pay Law in Colorado Is Backfiring

Elizabeth Nolan Brown | 6.21.2021 4:15 PM

A new employee compensation bill in Colorado was supposed to help close gender gaps in worker pay. But the so-called Equal Pay for Equal Work Act could be making it harder for Colorado residents—regardless of gender—to find jobs.

The law—which was passed in 2019 and took effect at the start of this year—ushered in a range of rules regarding employee compensation, including new procedures for adjudicating sex-based wage discrimination complaints and new record-keeping, notice, and transparency requirements. Among these are a stipulation that employers must directly state a position's pay (or a realistic pay range), benefits, and "any bonuses, commissions, or other compensation" as part of every job listing. Furthermore, companies are barred from asking prospective hires about their salary histories.

Thus, not only does the law open companies with Colorado workers up to new legal liabilities and administrative burdens, it also takes away some employer flexibility when it comes to attracting and setting pay for new hires. Many companies would prefer to keep compensation talk more private and, in such private discussions, to use previous salary as a guide to negotiations.

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