Pay Equality: The Emerging Legal Landscape | Quarles & Brady srl

Over the past year, several states, including Colorado, Connecticut, and Rhode Island, have proposed and passed new pay equity legislation. The impact of these laws is notable, not least because they subject employers to significant notice requirements, which may require sweeping changes in workplace practices and policies. The impact of these laws is even deeper amid the COVID-19 pandemic, due to the explosion of remote working opportunities, which means more businesses have multi-state footprints than ever before .

Colorado Equal Pay for Equal Work Act (effective January 1, 2021)

At a high level, Colorado’s Equal Pay for Equal Work Act (EPEWA) generally prohibits employers from paying an employee of one sex less than an employee of another sex for “substantially similar” work. Likewise, it sets out various anti-discrimination obligations for employers, including that employers cannot research the salary history of a potential employee, or rely on the salary history to determine the salary rate of a potential employee. the employee.

One of the main objectives of EPEWA is to ensure the transparency of opportunities for advancement in employment and, in doing so, to encourage female employees, who are statistically less likely to promote themselves, to seek career opportunities. promotion. To this end, EPEWA requires employers covered (i.e. (or range of pay) and general benefits for positions. EPEWA also requires employers to include information on compensation and benefits in job offers. of employment likely to be performed at least partially in Colorado.

Although EPEWA went into effect on January 1, 2021, a recent notice from the Colorado Department of Labor and Employment (“CDLE”) reports that at least some covered employers have not yet fully complied with its requirements and that the CDLE intends to be aggressive. in its enforcement efforts, especially with regard to remote working possibilities. In the opinion, the CDLE contends that, since all remote jobs can be done at least partially in Colorado, covered employers must include required compensation and benefits information in all remote work publications. According to the CDLE, if an employer has at least one employee in Colorado, the employer cannot comply with EPEWA by simply excluding Coloradians from consideration for such remote positions (for example, by stating “Coloradians do not have to apply ”). In short, if an employer has employees in Colorado, they will need to comply with the pay and benefits notice requirements for all postings relating to jobs that may be performed in Colorado (including work at distance).

Connecticut Act Respecting the Disclosure of Salary Scales (effective October 1, 2021)

Similar to, but much less comprehensive than Colorado’s EPEWA, the Connecticut Salary Range Disclosure Act for a Job Vacancy (the “Act”) requires that covered employers (i.e., those who have at least one employee in Connecticut) disclose the pay scale. for vacancies to job applicants and current employees. The law defines the pay scale as the pay scale an employer “expects to rely on” when setting pay for a position, and may refer to information such as applicable pay scales. or the amount budgeted for the position.

As of October 1, 2021, Covered Employers must provide salary scales to applicants for the position (s) the applicant is applying for either: (1) at the applicant’s request, or (2) before or at the time the candidate is made an offer of compensation, whichever comes first. Likewise, Covered Employers must provide current employees with salary scales for the employee’s position upon: (1) hire, (2) change of position, or (3) first request for a salary scale, whichever comes first.

The law also extends protections for employees against gender pay discrimination. Employers are now prohibited from paying workers at a rate lower than what the employer pays employees of the opposite sex for “comparable work”, instead of “equal work”.

Rhode Island Equal Pay Act (effective January 1, 2023)

Finally, employers with at least one Rhode Island employee will eventually have to comply with the myriad of requirements established under the revised Rhode Island Equal Wage Act (“the Equal Wage Act”). , which will come into force on January 1, 2023.

Like the Connecticut Covered Employers, Employers subject to the amended Rhode Island Equal Wage Act (v. Additionally, employers must provide pay scales to current employees at the time of hire and / or during employment at the request of an employee. If a current employee is transferred to a new position, employers must automatically provide the pay scale for the employee’s new position, even if the employee does not request such information.

In addition to extending the current ban on pay discrimination from “equal work” to “comparable work”, the Equal Pay Act also expands the prohibited bases of pay discrimination to include not only gender, but also race, color, religion, sexual orientation, gender identity or expression, disability, age or country of origin.

Perhaps most notably, the Equal Pay Act creates a safe haven for employers who voluntarily conduct a good faith audit of their pay practices (i.e. during the period January 1, 2023 to June 30 2026) – and eliminate any revealed illegal pay gap. through verification. An employer who has performed an audit of qualifying compensation practices – which must reflect due diligence to identify, prevent and mitigate violations – is not liable for damages or civil penalties. At present, neither the law nor the state agency that will be responsible for enforcing the revised law offers further guidance on how employers can successfully conduct a compensation practice audit. eligible.

Recommended next steps

Given the idiosyncratic and multifactorial nature of these equal pay obligations, employers covered by one or more of these laws should take action now to ensure swift and effective compliance. Specifically, employers with remote operations or workers in Colorado, Connecticut, or Rhode Island, or who are hiring for remote work that may be performed in one of those states should review current policies regarding employment. compensation and job posting to ensure they comply with updated requirements of state law. and, if they don’t, take action to become compliant immediately in Colorado or before the effective date in Connecticut and Rhode Island. Covered employers may also wish to conduct comprehensive compensation assessments to ensure that actual compensation matches the ranges identified in job postings and that employees receive equal compensation for comparable work, regardless of their demographic background. . Finally, employers, especially those with remote workers or operations in multiple states, should also monitor proposals for equal pay legislation in other states, including New York.

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