Colorado Asserts Nationwide Reach Over Most Online Job Postings of “Colorado Employers” in New Guidance Re Pay Transparency Rules

On Friday, December 18th, the Colorado Division of Labor Standards & Statistics (“DLSS”) issued Interpretive Notice & Formal Opinion #9 (“INFO #9”) regarding the pay transparency requirements in the new Colorado Equal Pay for Equal Work Act (“EPEWA”).

Most of the guidance is helpful to comply with the EPEWA, addresses technical details of covered job postings, and discusses which jobs must have the EPT (“Equal Pay Transparency”) data Colorado now requires of most job postings.  As to the extra-territorial reach issue which has been vexing employers, the DLSS boils it down to four simple rules (two of which multi-state employers will NOT like) to deal with the varying contexts of multi-state employers:

1. Jobs to be filled in Colorado, by a “Colorado employer” (meaning the employer has one or more employees in Colorado), require inclusion of the EPT data, even if the employer seeks jobseekers ONLY from outside of Colorado using an online listing or posting (which thus allows Colorado residents and employees to access that job posting).
2. Jobs to be performed outside of Colorado which you are filling need NOT have the EPT data (even if Colorado employees can access that job posting via the Internet).
3. An employer with no employees in Colorado need not include EPT data in any job posting.
4. Remote (aka virtual) jobs which a jobseeker could work from Colorado must contain the EPT data.

You will not like Rule #1, above, because it creates large operational challenges (to create Colorado-specific job descriptions and electronic markers for job scrapers to prevent jobseekers all over the country from otherwise seeing Colorado EPT information while under the impression the advertised job is not in Colorado) and, in some cases, forces either the revelation of HR trade secrets or the decision to no longer hire employees in Colorado. But, Rule #1 has a limited application even though it asserts nationwide extraterritorial reach over all job postings which:

(a) “a Colorado employer”

(b) posts online for jobs to be worked in Colorado

(c) while seeking jobseekers ONLY from OUTSIDE the state of Colorado to fill the job.

Colorado rests its rationale for this policy conclusion on its observation that Colorado residents and the employer’s Colorado employees could access those postings via the Internet and are entitled to know what those jobs pay, and their benefits. This would require out-of-state employers with even only one employee in Colorado to include pay data information in job postings for Colorado jobs if posted on a company’s corporate website or on job boards or with recruitment services like Monster, LinkedIn and Indeed.

But employers will like Rules #2 and #3, so things are looking up.

But then there is Rule #4 as to remote work, another large operational challenge and which requires the choice of one of five potential operational choices referenced, below. Nonetheless, you likely slowly give in to Rule #4 (because it regrettably makes sense, even though like Rule #1, it forces a lot of difficult corporate choices, including either forcing the revelation of HR trade secrets or the decision to no longer hire employees in Colorado).

Example of The Four DLSS Rules: The Houston Chronicle newspaper, headquartered in Houston, let’s assume, has a Denver office with reporters stationed there (thus rendering it a “Colorado employer”). The Chronicle wishes to hire a new reporter for its Denver office, let’s also assume. But, let’s also assume the Chronicle wishes to ONLY hire a reporter from outside of Colorado. Let’s also assume The Chronicle does not wish to include pay data information in its online posting of the job to avoid the competition from knowing what the paper is paying reporters and to avoid gossip in the Denver office about the new reporter’s salary and benefits. If The Chronicle were to publish a hard paper-printed want-ad it distributed in ONLY the 49 states OTHER THAN Colorado with no pay data information, The Chronicle would be fine and would not have violated Colorado’s pay data reporting law. If, however, The Chronicle were to have posted that want-ad online, even while looking ONLY outside the state of Colorado for a reporter to fill the Denver job opening, the Colorado DLSS takes the position that such online job listings/postings must include the EPT data because Colorado residents and Colorado employees of The Chronicle could access that online information from within Colorado.

A second context: If The Chronicle sought reporters to work ONLY outside of Colorado, it could list/post its jobs online nationwide and would NOT have to include pay data information even though Colorado residents could access that online posting.

The third context: If The Chronicle had no employees in Colorado, it could post a job for its coming Denver office (before it had hired any employees) without the pay data information because it is not a “Colorado employer” which the Colorado EPEWA covers. Yet. But one toe in the water…and GOTCHA ensues!

The fourth context: If The Chronicle posted a remote reporter job which could be worked virtually (meaning from any geographical location), including from Colorado, then EPEWA would require that job to contain the EPT data. (DE Members and customers: please consult pages 26 and 27 of the PowerPoints from last Tuesday’s (12/15/20) DE Member/customer Webinar re the Colorado Pay Transparency law to review your five options for remote jobs and as to which you must advise DE before January 1 as to how you wish to proceed with your remote jobs, unless you want them all to continue to be “listed” and “posted” in Colorado).

Also, please see the 12 little troublesome words from INFO #9 especially yellow high-lighted, below, which energize Rule #1, above.

Here’s what is new in INFO #9, including the issues identified above:

Job Opportunities

• Posting Definition: A “posting” that must include the pay data information is any written or printed communication (whether electronic or hard copy) that the employer issues to publicize available jobs or uses to accept job applications.
• Postings From 2020 Continuing Into 2021: Through January 31, 2021, employers do NOT have to go back and add pay data information to job postings first issued and still posted prior to January 1, 2021. However, if the posting is still available on or after February 1^st, employers must then add the pay data information beginning February 1^st.
• Pay Ranges Are What You Would Pay for The Job in Question: If an employer intends to identify a range to describe the compensation rate for the position, employers must use the lowest to the highest rate of pay the employer actually believes in good faith it might pay for the job. So, if you reasonably think that you would pay someone as low as $27,000 to perform the job in question based on their knowledge, skills and abilities or as high as $65,000 because of that person’s knowledge, skills and abilities, your range would be $27,000 to $65,000.
• Links OK: For electronic postings, an employer may satisfy the pay data information obligation by providing a hyperlink or URL in the posting that a jobseeker may click to access the pay data information, provided the employer clearly indicates in the posting that the hyperlink or URL provides access to compensation and/or benefits information specific to the position. Employers need not include the pay data information again on electronic postings accessible only via another electronic posting that already includes the pay data information, such as a career site or landing page.
• EPT Data Anywhere: Employers may place the EPT data anywhere on the job description: top, bottom, anywhere. It need not be consistent from job description to job description.
• No Pay Data Needed for Jobs Available Only Outside Colorado: The pay data information requirement does not apply to postings for jobs that a new hire will perform entirely outside of Colorado. This exception does not apply to jobs a Colorado employer posts in Colorado that can be performed virtually or remotely from anywhere, including in Colorado.
• This is The Trouble: The DLSS takes the position that a “Colorado employer’s” online job postings OUTSIDE OF COLORADO for jobs IN COLORADO must include the EPT data information. See our above Houston Chronicle example to understand this context. The DLSS’ exception to pay data reporting for jobs occurring outside the state of Colorado does not apply in reverse, i.e., to a Colorado employer’s job postings for jobs in Colorado which Colorado residents may access online (i.e., via a corporate website or an electronic job board or service like Monster, LinkedIn or Indeed). Here’s what INFO #9 says exactly to require the EPT data to be included when the employer is (a) a “Colorado employer” (b) posting a job online and (c) even while seeking only jobseekers from outside of Colorado:

“Out-of-State Postings Are Excluded. Employers need not disclose compensation in job postings made entirely outside Colorado. [EPT Rule 4.3(B)]. For example, compensation and benefits need not be included in a printed advertisement or posting entirely in another state, but must be included in an online posting accessible by Colorado residents.” (Yellow high-lighting added).

Promotional Opportunities

• Postings of Promotions Required: Colorado employers (i.e., those with one or more employees in the state of Colorado) are required to notify their Colorado employees of any and all promotional opportunities that arise within the company, regardless of where the promotional opportunity is or whether the Colorado employee is qualified for the promotional opportunity. A “promotional opportunity” exists when a Colorado employer has or anticipates a vacancy in an existing or new position “…so long as the job is superior to another job held by one or more employees of the same employer in terms of compensation, benefits, status, duties, or access to further advancement.”
• Same Day Notice Required: Colorado employers must make reasonable efforts to notify their Colorado employees of such promotional opportunity on the same calendar day (no staggered notices allowed), and prior to making a promotion decision.
• Form and Timing of Notice: The notice to Colorado employees of a promotional opportunity must be in writing, provided by any means that can reach all employees for whom it may be a promotion, and sufficiently in advance of the decision so that employees receiving notice may apply. An employer satisfies its obligation to notify employees if it chooses a method of notice by which all covered employees can access the notice within their regular workplace and tells employees where to find the notice.
  • NOTE: This unstated notice runaway, left to the employer’s judgement, could be nettlesome. Experience elsewhere with similar requirements in union agreements suggest coming trouble for employers deciding whether sufficient notice was given to employees while on vacation and on long-term leaves of absence (such as for workers’ compensation injuries, FMLA leaves and for ADA accommodations). We have heard demands nationwide across the land, especially in unionized workplaces, that job posting information has to be held open until all employees on-roll, but not on active duty on the day of the job posting, are back on active duty to give them a “fair chance” to bid the job. We have also defended claims of unlawful discrimination that the manager held the job opening off the market until a Protected Group employee the manager assertedly did not favor went on vacation or on leave so the job posting could cycle and be filled during the Protected Group employee’s absence.
• Contents of the Notice: The notice to Colorado employees of a promotional opportunity must contain the “EPT” information, the title of the position, and the means by which an employee may apply for the position.
• Exceptions: The exceptions to the notice of promotional opportunity requirement are:
  • Promotions to replace incumbent employees unaware of their pending separation;
  • Promotions that are considered automatically for an employee within one year following a trial period or other contractual obligation;
  • Promotions that are for positions that are temporary, acting, or interim in nature that will not last more than six months;
  • Multi-state employers need not provide promotional opportunity notices to non-Colorado employees; and
  • Multi-state employers need not provide the pay data information in the promotional opportunity notice to Colorado employees if the positions are to be performed outside of Colorado.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.