The Colorado Pay Transparency Law Explained

According to 2023 reports, companies that state an employee's wage in job advertisements have a 30% better retention rate of their staff, and the level of trust among the workforce improves greatly. The underlying building philosophy of the Colorado Pay Transparency Law incorporates the aspect of equity ‘within’ the workplace. 

The Colorado Pay Transparency Law has been an important milestone in relation to compensation management and equality in the workplace. It is critical for CHROs and compensation professionals to heed to the details of this law if they are to achieve compliance and transparency in their firms. 

Here are the essentials of the Colorado Pay Transparency Law you need to know, the requirements, and how to tailor your practice to the directives.

What is the Colorado Pay Transparency Law?

The Colorado Equal Pay for Equal Work Act, commonly referred to as the Pay Transparency Law, came into effect on January 1, 2021.
 

The key goal is the reduction of wage inequity by driving employment compensation diverse range in job advertisements, pay wage rates, and promotion practices. Making every job advertised equal and comprehensive and not biased towards any individual is another strategic aim for this act which is envisioned to eventually eradicate the gender pay gap, with statistics showing the current gap to be 18%, as noted by the U.S. Census Bureau.
 

What are some techniques to become familiar with the Colorado Wage Transparency Law?

There are a number of requirements for an employer operating in Colorado including the publication of the range of wages to the wage secrecy prohibition.

Let’s delve into each aspect:
 

1. Adding Pay Plans in Job Advertisements
   
   Job advertisements are a good example of this and employers are obliged to include in the range they intend to pay to the employees. The range of payment to the workers generally improves if the advert specifies the pay range as per the National Women’s Law Centre report.
    
2. Add Information Regarding Pensions Settlements And Other Policy
   
   In addition to salaries, advertisements will contain information about non-bargaining remuneration and benefits. These include health and retirement insurance including bonuses and other incentives such as vacations and toys which are rather expensive. 
   
   By contrast, in the 2023 survey by Glassdoor, 67% of job applicants consider detailed descriptions of benefits to their postings as important.
    
3. Giving Notice for Promotions And Other Advancements 
   
   According to the 2024 Global Talent Trends Report by LinkedIn, organizations with elaborated policies for promotion have 20% higher employee retention rate.
   
   Promotions notifications are essential as they are provided by employers for employees who express desire to occupy higher positions Employers are encouraged to allow internal candidates to compete for advancement and to issue such announcements in a timely fashion to enhance greater internal movement and retention. 
    
4. The Protection of Interest of Workers with regards to Wages/Pay
   
   Employers are prohibited from enforcing any rule that prohibits an employee from talking about their wages. This is designed to give workers the leverage to negotiate for equal wages. 
   
   According to data collected by Pew Research Center, underpayment due to the lack of communication has widespread phenomena within organizations where there is a lack of 43% awareness among employees of other employees salaries.
    
5. Deadline for Job Applications
   
   The job advertisement must indicate the deadline for filing the application to increase the transparency of the recruitment process. This measure eliminates the possibility of indiscriminate or biased recruitment. 
   
   In fact, as per SHRM’s reports, 78% of candidates believe that the existence of set dates in the recruitment process is a form of respect.
    
6. Process Update Email
   
   According to research, 60% of job candidates would like to give/ receive feedback at a stage of the employment process.
   
   It is mandatory to inform the applicants whom the employer has selected and those that have not been selected about the application outcome. This practice improves transparency as well as reputational effects of the employer. 
    
7. Recent Laws on Transparency not to Forget
   
   The Pay Transparency Law in Colorado comes as one of several attempts within a push towards fairer pay as seen within the context of organizations. Being updated on matters regarding changes and new rules is very important. 
   
   Moreover, tools such as CompUp can assist your organization in adjusting effectively to the changing transparency rules.

How Does the Colorado Pay Transparency Legislation Relate to Federal Pay Legislations?
 

• Conflicts Between Country and State Legislation
  
  Federal statutes like the Equal Pay Act prohibit discrimination based on pay. Colorado, on the other hand, has more stringent measures in place, requiring employers to report remuneration transparency. It is important to note that states also differ in such regulations.
   
• Differences for Multi-State Employers
  
  Multi-state employers face more complications than single state employers, for example, a remote role for an employer might be remote but a posting for that role within Colorado needs an adherence to Colorado’s specific pay disclosure policies. This however adds another layer concerning strategic modifications towards salary adjustments.

How To Comply With The Colorado Pay Transparency Law
 

• Defining Salary Structures accurately
  
  HEC of Mercer while conducting research later discovered that firms with structured pay systems within their firms were 25% more likely than others to retain their stars. It is therefore necessary to develop pay ranges and record the rationale for them.
   
• Amend Job Advertisements
  
  All postings that contain a job advertisement are required to have the pay range and benefits in all internal and external job positions. This ensures regular postings are completed.
   
• Email employees for internal job openings
  
  Employers should set systems where an employee advancing within the organization through set positions is automatically notified, clearer communication means all parties are engaged.
   
• Compile Everything
  
  In addition to compensation structures and promotion letters, always making room for further documentation is required. Not only does this enable adherence, but it also provides a sound defense for purposes of audits and disputes in the future.

Colorado Equal Pay Transparency Law Update: Additional Guidance (INFO #9A) Released

The context of the new guidance issued by the Colorado Department of Labor and Employment is relevant to the clearer implementation of the law. The important changes made were as follows:
 

• Compensation and Benefits Disclosures
  
  Employers should describe in detail all aspects of individual compensation components such as bonuses, and commissions among others. Equal attention should be placed on the clarity of the meaning of the benefits.
   
• Notice of Job Opportunities
  
  Growth of all employees in a given company is critical in achieving the intended goals, thus job opportunities should be made known throughout the entire firm to all employees.
   
• Career Progression Opportunities
  
  Employers should advise on the ambitious career ladders they can embark on and how long this may take delineating necessary qualifications. As per the Workplace Survey by Gallup, over 3 in every 5 employees (59%) would want to know about career growth opportunities available to them.
   
• Career Development Opportunities
  
  Employers should also assist in skill development alongside the promotions through skill development programs to assist employee growth in the long haul. Research shows that 74% of employees will be more loyal to a company that looks after their progress.
   
• Other Exceptions to Notice Requirements
  
  Onboarding for new employees in temporary posts lasting less than six months may not require advance notice. This is because employers are still keen on the job. CDLE guidelines should be consulted for such exemptions.
   
• Timing of Notice
  
  It is important to promptly notify regarding job openings and appropriate placements within the organization. This postponement can translate easily into a violation of compliance rules.
   
• Post-Selection Notice
  
  It is also a good professional practice to keep all applicants informed of the selection decisions in respect of each of the job applicants – this is after the cut-off date of an appeal to the selection board.

Ensure Compliance by Using CompUp
 

To comply with the complex laws about pay transparency, you will need effective tools and systems in place. Compensation management software like CompUp can assist you with:

• Establishing Clear Salary Policies- You can set up and enforce meaningful pay ranges that reflect your organization’s requirements and legislations.
   

  

  
   

• Powerful Gender Pay Gap Analysis Reporting: CompUp plainly reports and compares paying between groups by job title, geography and other factors. This feature allows companies to eliminate gender inequality and follow legal requirements concerning pay gaps.
   

  

  
   

• Peer Comparison: With CompUp, employees are able to perform peer comparison of their compensation which promotes a more candid and fair work environment.
   

  

  
   

• Pass Exact Information In Real Time: Understand your compensation metrics which helps you in making the right strategic decisions fostering fairness and loyalty.
   

  

  
   

• Join a Community of Specialists: CompUp has an active community of compensation professionals where many practices are shared, problems are discussed, and checks to promote compliance on pay related issues are sought.
   

With the use of CompUp, CHROs and compensation professionals are able to efficiently handle the pay transparency obligations without increasing the administrative workload, and address the pressing concerns of pay transparency while achieving the organization’s strategy.

Conclusion

In terms of equal employment opportunities, the Colorado Pay Transparency Law is a huge invariant development. For CHROs and professionals who handle compensation, avoidance of imposed legal obligations is out of question. Give your organization the necessary resources and know-how to implement these changes effectively.

Try the platform and book a demo with CompUp to prepare your pay practices for the future.