The Equal Pay for Equal Work Act (EPEWA), effective January 1, 2021, has given Colorado employers significant heartburn regarding its job posting and promotional opportunity notification requirements. The Colorado Department of Labor and Employment (CDLE) has recently revised its guidance on the Act to expand its reach further to covered employers’ workers who could perform the work that is the subject of the job posting or promotion remotely or outside of the state. The guidance could have a significant effect on employers with workforces that primarily work remotely, either within or outside of the state.
EPEWA in a nutshell
As of January 1, employers with at least one employee in Colorado must provide certain information relating to job postings and “promotional opportunities.” Generally speaking, if you elect to publish an available job posting, it must include information about the compensation rate and general descriptions of bonuses, commissions, or other compensation as well as any benefits being offered with the position.
You also must notify all current employees in Colorado (whether qualified or not) of any promotional activity sufficiently in advance so they can apply for the opportunity. Accordingly (subject to limited exceptions), even “in-line” promotions on a projected career trajectory are considered promotional opportunities that must be communicated to existing employees for whom the position would be considered a promotion. As with job postings, the promotional opportunity notification must include information about compensation and other associated benefits.
Gray area: remote workers under EPEWA
Under state regulations interpreting the Act, the promotional opportunity posting requirements don’t apply to employees “entirely outside Colorado.” The compensation posting requirements don’t apply to either (1) jobs to be performed entirely outside Colorado or (2) job postings entirely outside of the state.
Accordingly, before July 21, 2021, the CDLE interpreted the language to mean employers weren’t required to include compensation information for jobs to be performed outside of Colorado, even if the job posting itself was within the state or could reach state residents (such as online postings).
Likewise, the CDLE interpreted the language to mean any job postings made entirely outside of Colorado (such as print advertisements outside of the state, but not online postings that could be viewed by Colorado residents) didn’t need to have any compensation information included with them.
Now, however, the CDLE has backtracked on its previous interpretations, given that so many jobs today can be performed completely remotely (in no small part because of the COVID-19 pandemic). As of July 21, 2021, the agency has interpreted the Act and its supporting regulations to stand for the proposition that its out-of-state exceptions are “implied” and must be “applied narrowly.”
Therefore, the CDLE has taken the position that the Act’s out-of-state exceptions apply only to jobs “tied to non-Colorado worksites” (such as a waitstaff position in a restaurant outside of the state), but not to remote work that could be performed either in Colorado or elsewhere.
Thus, even if a remote job posting expressly states the employer will not accept Colorado applicants, if the work could be performed by a worker in the state, then the Act applies, and the job posting must include compensation and benefit information. Similarly, because promotional opportunity postings must include the same compensation and benefit information as job postings for work that could be performed in Colorado, all promotional opportunities (regardless of the location of the promotion) must be disseminated to Colorado employees in advance and contain compensation and benefit information about the promotional opportunity.
Practical implications
As more people continue to work remotely in the wake of the COVID-19 pandemic, the CDLE’s new guidance about job postings and promotional opportunities for positions that could be performed remotely could have negative effects on smaller employers attempting to compete with larger companies with more inflated salaries and benefits. A Wall Street Journal article published on July 27, 2021, noted that particularly in the tech sector, smaller firms in locations such as Denver and Austin are losing talent to larger east and west coast firms that are able to offer higher salaries—even if the work is being done remotely from within, for example, Colorado.
Accordingly, if smaller Colorado employers are compelled to publish salary and other benefit information about available jobs and promotional opportunities (even if the work could be done either within or outside of the state), it stands to reason that larger employers with deeper pockets could “out-bid” smaller Colorado employers and obtain greater talent for themselves.
Likewise, it’s highly likely Colorado employers will be compelled to offer above-market salaries, benefits, or other compensation to compete for applicants who are able to work remotely for essentially any company across the country.
Key takeaways
Given that both the EPEWA and the CDLE’s guidance interpreting it are still very new, time will tell if the job posting and promotional opportunity requirements for remote work will negatively affect Colorado employers in an environment in which potential employees can (and typically prefer to) work remotely. Further potential legal challenges to the Act itself (if any) also may dramatically affect its impact on smaller employers in the state.
