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Colorado employers face new wage regulations in 2021

In January of 2021, a new law will come into effect in Colorado. Senate Bill 18-085, also called the Colorado Equal Pay for Equal Work Act, may have a significant impact on the way that Colorado businesses approach hiring, promotion and pay policies in their business.

What should employers know about this new bill and its impact on their hiring and pay practices?

What are valid reasons for wage differences under this law?

Each employee brings different skills and experience to the table, and this can affect their work in a variety of ways. Because of this, the Colorado Equal Pay for Equal Work Act allows pay differences based on several different factors, including:

  • Employees’ experience, training or education related to the position
  • Employees’ seniority or past performance
  • Where employees do their work
  • Whether employees travel regularly for their work

In order to show that they have upheld the new regulations, employers are required to keep a record of both employees’ pay rates and their job descriptions over the course of their employment. They also need to keep these records for two years after an employee ends their time at the company.

What are not valid reasons for wage differences?

This new law specifically prevents wage differences for similar positions based on an employee’s sex. It also prohibits a number of actions on the part of employers, including:

  • Asking about employees’ past wages
  • Discriminating against employees who refuse to disclose their past pay rate
  • Preventing employees from discussing their wages with others.

If employers do not follow the regulations set down in this bill, they could be at risk of wage and hour disputes with current or former employees.