Colorado employers who have been operating under increased transparency rules regarding how they post and interview for new jobs may have to work under even more requirements going forward if a bill coming for its first committee vote on Tuesday passes.
Senate Bill 105, sponsored by Democratic Sens. Jessie Danielson of Wheat Ridge and Janet Buckner of Aurora, comes after employers have complained since its 2021 implementation about the effects of Senate Bill 19-085, which was an effort to increase pay transparency and decrease the pay gap between male and female workers. Major changes created by the Equal Pay for Equal Work Act included requirements for employers to list the salary range of available jobs and post open jobs to every worker in a company, plus a ban on employers asking applicants what they made at their previous position.
The bill received national attention following a Wall Street Journal article in 2021 highlighting the growing number of postings for potentially remote jobs that said Colorado applicants were not welcome to apply. That was meant to circumvent pay transparency requirements for out-of-state companies, and Scott Moss, director of the division of labor standards and statistics in the Colorado Department of Labor and Employment, told the Denver Business Journal in 2022 that the state couldn’t make companies without physical presences here follow the new law.
As such, business leaders began talking with sponsors of the original bill last February about fixes that they thought could ease burdens on employers and open more of the increasingly available remote positions with national companies to state residents. What came out of those talks, they said during a hearing last week before the Senate Business, Labor and Technology Committee, was a mixed but overall disappointing result.
SB 105 does remove the burden of employers having to advertise jobs that are considered career progression opportunities — promotions that are available just to individual workers as they advance in their roles. Having to post such openings was both time consuming and often frustrating to workers not qualified to move into those defined roles, employers had said.
However, the new bill does not address the remote work situation. Some business groups had suggested that companies without physical locations in Colorado be allowed to advertise open positions here under the laws of their home state, in order to increase remote opportunities for Coloradans. And Moss in the Feb. 21 hearing said he would like an amendment that would exempt out-of-state companies with remote Colorado workers from having to notify those workers of every job opening in other states or countries.
But business leaders said they are worried not just about what the proposal doesn’t do but the new conditions it does impose.
Under SB 105, for example, employers would have to provide notices to employees about who is selected for a job or promotional opportunity that was posted, including their name and former title. Allison Morgan, director of state government relations for the Colorado Bankers Association, said that she worries this could create privacy concerns for selected workers.
The bill also would extend from three to six years the amount of back pay that someone pursuing a wage discrimination complaint can receive. And it requires CDLE to investigate and adjudicate complaints rather than just to enforce select provisions of the law, such as requirements around pay transparency in job postings.
Proponents said the changes are needed to increase transparency in the hiring process further and to ensure that large companies’ feet can be held to the fire through investigation by the state agency rather than just through lawsuits filed by complainants.
Sophie Mariam, a labor policy analyst for the Colorado Fiscal Institute, also said that a stronger law will be economically beneficial during a time of labor shortage. Research on a Danish pay-transparency law showed that it not only closed the pay gap between men and women, but that workers’ efforts and performance levels rose when there was transparency in the process.
“Pay equity produces a high return on investment,” Mariam said.
But several business and government groups said the proposal could lead to adverse consequences for employers.
Jaclyn Terwey, legislative and policy advocate for the Colorado Municipal League, said that doubling the amount of back pay available to complainants is both financially and logistically burdensome. Many city governments and other employers don’t keep records going back that long that could assist them in defense of their cases, Terwey noted.
Grace McGuire, an employment-law attorney at Denver firm Littler, said the bill also does not rein in the cumbersome requirements for multi-state or multi-national companies to inform Colorado workers of any job openings anywhere in the world.
“One of the fundamental problems with the original bill was that the promotional transparency piece, while aspirational, was one that employers consider to be overly broad,” said McGuire, who was testifying for the Colorado Chamber of Commerce. “This bill does absolutely nothing to address what I would call that overbreadth.”
The committee is scheduled to meet at 2 p.m. Tuesday in the Old Supreme Court Chambers at the Capitol to consider amendments and vote on SB 105.