Colorado Issues Official INFO Guidance on Pay Transparency Amendments

The Colorado Department of Labor and Employment (CDLE) recently adopted revised Equal Pay Transparency Rules (EPT rules) that provided some explanation regarding how the EPEWA would be enforced. Now the CDLE has issued its long-awaited official guidance via Interpretive Notice & Formal Opinion (INFO) #9A.

INFO #9A, while not legally binding, provides critical insight into how the agency plans to enforce the amended EPEWA and rules.

Quick Hits

• Employers in Colorado hoping to use the new “career progression” exception to the Equal Pay for Equal Work Act’s job opportunity employee notification requirements will find the exception of limited use, as any subjectivity in the promotional decision will disqualify a promotion from this exception.
• The “career development” exception may prove useful for employers seeking to reward employees who have demonstrated excellence in handling an evolving set of tasks with a promotion, but who do not wish to announce the promotion ahead of time, so long as they do not use the exception to fill an actual vacancy.
• The exception for giving notice of acting, temporary, or interim positions has had its duration limitation expanded from six months to nine months, but with new limitations on how often employers can use the exception.
• The requirement to notify employees, in the new post-selection notifications, of how to demonstrate interest in similar future opportunities may be satisfied with a standardized notice directing employees to internal resources.
• If compensation ranges vary among multiple Colorado locations, some level of detail in job postings as to those site-specific ranges may be required.

A Refresher on the EPEWA and EPT Rules

Effective January 1, 2024, the EPEWA will require notification not only of opportunities for promotion, but of all “job opportunities,” broadly defined as “a current or anticipated vacancy for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts.” As under the prior law, such opportunity notifications need only go to Colorado employees. However, Colorado employees must receive notification of job opportunities no matter where in the company the opportunities reside, with the caveat that if an opportunity is neither physically in Colorado nor a remote position that could be performed from Colorado, then the notification need not contain the compensation and benefit information otherwise required, and discussed in greater detail below.

For both external job postings and internal notices of opportunities within Colorado, or of remote jobs that could theoretically be performed in Colorado, the EPEWA requires not only the inclusion of the salary or wage range and a general description of other compensation and benefits applicable to the position (required since 2021) but also the deadline the application window is expected to close. If an employer is accepting ongoing applications, the posting must say so, and no deadline is required. An application deadline may also be extended through an updated posting if the original deadline was posted in good faith. In addition, the EPT rules require that information on how to apply for the opportunity be included in the posting or notice.

Career Progressions

While the expansion of the notice requirement from “promotional opportunities” to “job opportunities” presents a compliance challenge for many employers, important new and revised exceptions could offer some relief. For example, if a promotion qualifies as a “career progression,” the EPEWA and EPT rules do not consider it a “job opportunity” for which separate notice is required every time an employee is elevated to such a position. These are the sort of “in-line,” noncompetitive promotions that are “regular or automatic” and “based on time in a specific role or other objective metrics.” Left unanswered by the EPEWA and EPT rules, however, was whether any subjectivity in the promotional decision would be permitted for a promotion to qualify as a career progression. INFO #9A answers that question with a resounding “no.” According to examples the CDLE provides, if the decision to elevate an employee is based even in part on subjective factors like managerial discretion, performance evaluation scores, or employee rankings not determined by defined formulae, the position is not a career progression and must be separately announced as a job opportunity prior to any promotion. The only types of positions that can qualify for career progression are those that advance according to objective criteria, such as time in a role, passage of standardized examinations, and the like. Interestingly, one example INFO #9A provides for a permissible objective criterion is the absence of disciplinary actions, despite the fact that subjective managerial decisions may well influence such actions. Overall, it appears the agency intends to construe the career progression exception narrowly, making it of limited utility for many employers.

Further, if employers do have positions that qualify for career progression, while job opportunity notifications may be excused for each elevation in the progression, employers still have to make available to eligible employees a notice containing the requirements for advancement to each position in the progression, as well as each such position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement. INFO #9A clarifies that methods such as notices in new-hire packets or on company intranet pages accessible by eligible employees will suffice for this notice. “Eligible employees” are simply those in the position that, when the requirements in the notice are satisfied, would move from their position to another position listed in the notice. Unfortunately, INFO #9A does not provide examples of compliant career progression notifications.

Career Development

Considering how narrowly the CDLE will interpret the career progression exception, as well as the separate compliance hurdle of career progression notifications, many employers may look to the other new job opportunity exception contained in the amended EPEWA: career development. The EPEWA defines “career development” as a promotion “to update the employee’s job title or compensate the employee to reflect work performed or contributions already made by the employee.” The EPT rules further explain that those contributions must have been part of the employee’s existing job and not within a position with a current or anticipated vacancy as defined by the law.

INFO #9A provides some helpful guidance on the usage of this exception. If an employee’s position naturally evolves with expanded or different duties, and the employer wishes to change the employee’s title and/or increase the employee’s pay to reflect this evolved role, this would likely qualify for the exception. But the exception can’t be used as an end-run around job opportunity notification requirements; if a vacancy in a position develops, an employer cannot simply transfer the duties of that vacated position to another employee and later promote that employee to the previously vacated role without first issuing a job opportunity notification. The critical factor is whether the elevation will be to a position for which employees otherwise could compete, as opposed to a recognition that an employee’s role has evolved.

While this guidance is helpful, it does leave open questions, such as the fact that both INFO #9A and its predecessors have provided that when an existing position’s duties are changed so materially that it effectively becomes a new position, an opportunity notification requirement is required “with or without title or pay changes.” It is likely that much will turn on the agency’s interpretation of “materially,” which is undefined in the EPEWA or EPT rules and not addressed in current agency guidance.

‘AINT’ Hires

Since 2021, also excluded from the notice and posting requirements in the EPEWA have been acting, interim, or temporary (AINT) positions lasting up to six months. Under the new EPEWA and EPT rule, the AINT exception has been expanded to nine months, with the caveat that another AINT hire must not have held the same or a substantially similar position at any time in seven or more of the preceding twelve months, a limitation designed to discourage regular usage of the exception.

INFO #9A further clarifies that the aim of the revised exception is to let seasonal hires qualify for the AINT exception so long as they do not exceed the seven-month limitation in the federal Fair Labor Standards Act’s seasonal exemption. It also confirms the EPT rules’ intent to curb abuse, providing that repeatedly utilizing the AINT exception to fill the exact same position without job opportunity notices is unlawful. In contrast, a company can repeatedly use the AINT exception to hire temporary workers so long as at the end of the nine-month temporary period it issues compliant job opportunity notifications to fill the positions permanently.

Post-Selection Notices

Entirely new to the EPEWA in 2024 is the additional requirement of notice aftera candidate is hired for a job opportunity. The EPT rules provide that such notice is required to go only to those Colorado employees whom the selected candidate will “work with regularly,” defined as “those who, as part of their job responsibilities, either: (1) communicate or collaborate about work at least monthly; or (2) have a reporting relationship (i.e., supervisor/supervisee)” with the selected candidate. However, the need to make this candidate-specific “work with regularly” determination may prove an unwelcome burden and compliance hurdle for some employers. INFO #9A provides welcome clarity that an employer is instead welcome to notify a broader set of, or all, employees.

These post-selection notices, which must go out within thirty days of an employee’s hire, must contain the name of the selected candidate, his or her former job title if the hire was internal, the new job title, and information on how employees may demonstrate interest in similar opportunities. The EPEWA and EPT rules are generally silent on this last requirement, but INFO #9A confirms that a simple instruction to email Human Resources would be an example of a compliant notice of how to demonstrate interest in similar opportunities. There does not appear to be any need to tailor such instruction to the specific job opportunity, so long as the instruction is an accurate description of how to express such interest.

Further, INFO #9A sheds additional light on employees’ right to have their names or former job titles excluded from such post-selection notices if they believe such disclosure would put their health or safety at risk. Employees wishing to exercise this right need only ask, without any requirement that they identify the specific risk or justify their belief in it. Upon receipt of such a request, employers must limit their post-selection notices to a simple statement that the opportunity is filled and information on how to express interest in similar opportunities.

Enhanced Agency Expectations Regarding Compensation Disclosure

Finally, INFO #9A contains not only the above clarification points on the amended EPEWA and EPT rules, but also interesting new guidance on how detailed employers must be in postings regarding the salary or wage ranges applicable to the position. Previous guidance confirmed that if pay for a role may be different inside versus outside Colorado, a compliant posting must state what pay range the employer expects to pay in Colorado. INFO #9A, however, adds additional potential requirements. First, if pay varies among various worksites within Colorado for the same position, the posted pay range must correspond to the site(s) for which the employer is hiring. In addition, for jobs that can be performed anywhere within Colorado, the posting should either contain (a) a pay range that exceeds the highest local minimum wage in Colorado (currently Denver’s, with a 2024 minimum wage of $18.29 per hour) or (b) a statement that pay will not be below any applicable local minimum wage.

Of note, these new details are not explicitly required by law, but it appears the CDLE considers them important elements that allow applicants to estimate their pay accurately—a transparency objective that underpins both the amended EPEWA and EPT rules. Employers already in the process of revising their postings to comply with the new 2024 requirements may want to take this guidance into account in that process.

Staying Informed

Ogletree Deakins’ Denver office will continue to monitor developments and pay transparency guidance and will provide updates on the Colorado, Pay Equity, and Wage and Hour blogs as additional information becomes available.

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