Colorado's Equal Pay for Equal Work Act What Employment Counsel Need to Know, 1019 COBJ, Vol. 48, No. 9 Pg. 36

• Author: By SARAH PARADY, CHARLOTTE N. SWEENEY, AND BILL C. BERGER
• Position: Vol. 48, 9 [Page 36]

48 Colo.Law. 36

Colorado's Equal Pay for Equal Work Act What Employment Counsel Need to Know

Vol. 48, No. 9 [Page 36]

Colorado Lawyer

October, 2019

LABOR AND EMPLOYMENT LAW

By SARAH PARADY, CHARLOTTE N. SWEENEY, AND BILL C. BERGER

This article summarizes Senate Bill 19-085, Colorado's Equal Pay for Equal Work Act.

In 2019, the Colorado General Assembly passed SB 19-085, the Colorado Equal Pay for Equal Work Act (CEPEWA). CEPEWA becomes effective on January 1, 2021 and will apply only to violations that occur on or after its effective date.¹ CEPEWA amends and effectively replaces Colorado’s equal pay statute, the Wage Equality Regardless of Sex Act, CRS §§ 8-5-101 et seq., which prohibited an employer from discriminating “in the amount or rate of wages or salary paid or to be paid his employees in any employment in this state solely on account of the sex thereof,”² and gave the Colorado Department of Labor and Employment (CDLE) permissive enforcement authority.³ CEPEWA greatly expands the definition of wage discrimination and changes the process for handling wage discrimination claims.

CEPEWA has two parts. The first creates a private cause of action similar to, but broader than, the federal Equal Pay Act (EPA);⁴ the second creates transparency measures, enforceable by CDLE, to provide employees more information about promotional opportunities, pay ranges, and the historical pay practices at a given place of employment.

This article provides an overview of CEPEWA and concludes with tips for both practitioners representing employees and those representing employers.

Why CEPEWA?

CEPEWA is Colorado’s response to the persistent wage gap between men and women. While the EPA was designed to eliminate the gender pay gap, it has been woefully ineffective in doing so.⁵ CEPEWA is intended to meaningfully close Colorado’s pervasive gender and “gender plus” wage gaps.⁶

In passing CEPEWA, the General Assembly declared that "[d]espite policies outlawing pay discrimination and creating avenues for women to bring a civil action for lost wages, women still earn significantly less than their male counterparts for the same work[.]"⁷ The legislature noted that Colorado women "earn just 86 cents for every dollar men earn"⁸ and "Latinas earn 53.5 cents and black women earn 63.1 cents for every dollar earned by white men."⁹ It further noted that the gender wage gap deprives women of $400,000 to $ 1 million in employment income over a typical lifespan and stated that eliminating the pay gap would cut the poverty rate for working women in half.¹⁰ Accordingly, the General Assembly declared its intent "to pass legislation that helps to close the pay gap in Colorado and ensure that employees with similar job duties are paid the same wage rate regardless of sex, or sex plus another protected status."¹¹

CEPEWA differs from existing state and federal law in several key respects. Unlike the Colorado Anti-Discrimination Act (CADA),¹² CEPEWA prohibits pay differentials between male and female employees in the same job regardless of whether those pay differentials arise from an intent to discriminate. Unlike the EPA,¹³ CEPEWA does not permit employers to justify a sex-based pay disparity by pointing to "any factor other than sex," and instead requires employers to justify pay disparities using one of six specific factors.¹⁴ CEPEWA also bans the use of pay history to justify a pay disparity and imposes new recordkeeping requirements on employers.

Overview of CEPEWA

CEPEWA will apply to all employees working for all public and private employers in Colorado, irrespective of size. Unlike CADA, CEPEWAhas no exemptions for religious entities or domestic employees.

CEPEWAs definitions of "employer" and "employee" align with those in CADA.¹⁵ As defined in the statute, '"[e]mployer' means the state or any political subdivision, commission, department, institution, or school district thereof, and every other person employing a person in the state,"¹⁶ and'" [e]mployee' means a person employed by an employer."¹⁷Accordingly, CEPEWA does not appear to alter current standards for determining whether someone is an employee or an independent contractor.

Note, however, that CEPEWAs retaliation provision is not limited to "employees," and instead prohibits retaliation by an employer against an employee or any "other person"¹⁸ who "inquire[s] about, disclose[s], compare[s], or otherwise discusse[s]" the wage rate of an employee.¹⁹

CEPEWAs main provisions

■ prohibit pay discrimination on the basis of sex or sex plus another protected status;

■ ban employers from requesting pay history from prospective employees;

■ ban employers’ reliance on the pay history of a prospective employee;

■ require employers to internally post job opportunities, including promotional opportunities;

■ require employers to post salary ranges in job listings;

■ protect from retaliation anyone who discusses employee pay; and

■ require employer record keeping regarding job descriptions and wage rates.

Part 1 of CEPEWA provides a private right of action for pay disparities, retaliation, and related violations. Part 2 provides for administrative enforcement by CDLE of transparency-related measures.

Part 1: CEPEWA Provisions Enforceable in Court

CEPEWA's private right of action is modeled on that in the EPA but is intentionally more protective than the EPA in several respects.

Prohibition against Pay Discrimination Based on Sex

The core of CEPEWA is the CRS § 8-5-102(1) prohibition against discrimination "on the basis of sex, or on the basis of sex in combination with another protected status as described in section 24-34-402(l)(a) [CADA], by paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work...."

Evaluating wage rates.

SB 19-085, § 4, amends CRS § 8-5-102 to describe a fact-dependent analysis of what constitutes “substantially similar work.” The statute directs fact finders to look past job titles and consider (1) the skill and effort required for a job, (2) shift work, and (3) job responsibilities.

The statute does not specify how much less is “less than” the rate paid to an employee of a different sex. Employers will likely argue that courts should read the statute to allow for a de minimis differential, while employees will argue that no differential is allowed. Recognizing that employees are paid in different ways (e.g., hourly versus salary), the statute defines “wage rate” as follows:

(a) for an employee paid on an hourly basis, the hourly compensation paid to the employee plus the value per hour of all other compensation and benefits received by the employee from the employer; and

(b) for an employee paid on a salary basis, the total of all compensation and benefits received by the employee from the employer.²⁰

When considering whether a wage gap exists between hourly versus salaried employees who otherwise perform “substantially similar work,” this definition of “wage rate” suggests that each worker’s total compensation package must be compared. Thus, the hourly worker’s total hourly pay plus the value of benefits is compared against the salaried worker’s total salary plus the value of benefits.

Evaluating sex.

CRS § 8-5-101(8) defines “sex” as “an employee’s gender identity.” Non-female plaintiffs will be able to assert claims under CEPEWA if they experience a sex-based pay differential. Additionally, the phrase “gender identity” means that a person’s self-identified gender will control, not the gender assigned at birth. Nothing in the statute suggests a legislative intent to limit an employee’s identity to a binary gender, meaning non-binary genders should be equally protected.

CEPEWA prohibits not only discrimination based on “sex,” but discrimination based on “sex plus” any other status protected by CADA: “disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry.”²¹ For example, if Latina women, older women, or lesbians experience a more severe wage gap in a given workplace than non-Latina women, younger women, or heterosexual women, the statute contemplates that these women will be able to recover the entirety of the wage gap based on their sex plus...