By: Mr. Gary Benson, Esq. and Mr. Sean O’Brien, Esq.

If 2021 brings Colorado employers hope for a new year where COVID-19 doesn’t dominate your every thought. However, employers need to be aware of several significant changes to Colorado state law that went into effect at the beginning of 2021, some of which directly relate to COVID-19.

The Equal Pay for Equal Work Act (the “Equal Pay Act”) and the Healthy Families and Workplaces Act (the “HFWA”) are two new laws passed in 2020 and effective on January 1, 2021. The Equal Pay Act is designed to prevent sex-based pay disparities and includes requirements to increase transparency in job postings and opportunities for promotion. The HFWA establishes the minimum standards for employees to accrue and use paid sick leave, including paid sick leave during a public health emergency (COVID-19 pandemic).

The Colorado legislature also revised the Colorado Overtime and Minimum Pay Standards (“COMPS”) to change the minimum wage and the salarythresholds for certain exempt employees. These changes are reflected in COMPS Order #37.

Equal Pay for Equal Work Act
The Equal Pay Act prohibits employers from paying male and female employees who perform substantially similar work different wage rates, regardless of the employees’ job titles. The law includes six exceptions to this general prohibition, recognizing that employers may have a legitimate reason to pay employees different wage rates in the following scenarios:

• If the employer utilizes a seniority system;
• If the employer utilizes a merit system;
• If the employer utilizes a system that measures earnings by quantity or
  quality of production;
• If employees are located and working in different geographic locations;
• If one employee has additional education, training, or experience that is reasonably related to the work in question; or
• If an employee travels as a regular and necessary condition of employment.

The Equal Pay Act also prohibits employers from requesting a prospective employee’s wage rate history or relying on a prospective employee’s wage rate history to determine a wage rate if a job offer is made. Employers cannot prohibit their employees from discussing their wage rates or require employees to sign any document that would prohibit them from discussing their wage rates. Employers cannot discriminate or retaliate against employees or prospective employees in any manner for refusing to provide their wage rate histories, for discussing their wage rates, or for enforcing the Equal Pay Act.

Even before the Equal Pay Act, Colorado law prevented sex-based pay discrimination and guaranteed employees’ right to discuss their wage rates. The major significance of the Equal Pay Act on this front is that it provides additional damages to employees or prospective employees who show that a violation of the law has occurred. If an employer violates one of the above provisions of the Equal Pay Act, it may be required to pay up to three years of lost wages, liquidated damages equal to the amount of lost wages and attorney’s fees. Employees and prospective employees who show that a violation occurred could also be entitled to employment, reinstatement of employment, promotion or a pay increase.

The Equal Pay Act additionally includes brand new requirements to increase transparency in job postings and promotional opportunities. Job postings must now include the salary, hourly rate, or an estimated range of the salary or hourly rate of pay for each job advertised. Posting that the rate of pay will be commensurate with experience does not satisfy this requirement, but employers are not locked into paying the amount listed in a posting. They can pay more or less based on the qualifications of the candidate who is hired, as long as the posted salary or hourly rate was a good faith estimate. Job postings must also include a general description of other compensation offered (i.e. bonuses or commissions) and a general description of the benefits provided (i.e. health plans).

Employers must make “reasonable efforts” to notify all employees in Colorado on the same calendar day of any “promotional opportunities” before hiring someone for that opportunity. The Equal Pay Act does not define what qualifies as “reasonable efforts” or a “promotional opportunity,” but the CDLE has weighed in with its interpretation of those terms. Employers are encouraged to follow the CDLE’s interpretation until it has been rejected by a court of law. A “promotional opportunity” is an existing or new position that could be considered a promotion for at least one employee in terms of compensation, benefits, duties or status. An employer must notify all employees of the promotional opportunity, regardless of whether or not they would be qualified for the position. An employer makes “reasonable efforts” to notify its employees of the promotional opportunity if they are all able to access the notice in their regular place of business or are told where to find the notice. Notices of promotional opportunities must include the same information required for all other job postings.

The CDLE’s interpretation of the promotional opportunity notice requirements has created three exceptions. The requirement does not apply to: (1) an anticipated opening for a position that is currently filled by an employee who does not know that he or she will be separated; (2) automatic promotions after a trial period; and (3) temporary or interim hires up to six months. It is important to note that the automatic promotion exception only applies to employees who were working on a trial or probationary period for one year or less. It does not apply to standard career ladder promotions (i.e. a promotion from hygienist level 1 to level 2).

Healthy Families and Workplaces Act
The HFWA establishes minimum standards for employees to accrue paid sick leave. Employees must earn at least one hour of paid sick leave for every 30 hours worked. Employers can allow employees to accrue paid sick leave at a higher rate (i.e. one hour of paid leave for every 20 hours worked). An employee is not entitled to earn more than 48 hours of paid sick leave per year, unless his or her employer sets a higher maximum amount. For example, an employee can let its employees accrue 60 or 80 hours of paid sick leave per year. Employers can satisfy this requirement by providing employees with a full bank of paid sick leave at the beginning of the year.

Employees begin to accrue leave as soon as their employment begins, and they can use paid sick leave as soon as it is accrued. Employees must be allowed to use paid sick leave for a wide variety of reasons, including:

• A mental or physical illness, injury, or health condition that prevents the employee from working;
• The need to obtain a medical diagnosis, care, or treatment for a mental or physical illness, injury or health condition;
• The need to obtain preventive medical care;
• The need to care for a family member who has a mental or physical illness, injury, or health condition or needs to obtain a medical diagnosis, care (including preventive care) or treatment;
• The need to seek or obtain medical, mental health, legal, or other related services if the employee or the employee’s family member has experienced domestic abuse, sexual assault, or harassment; and
• The closure of the employee’s place of business or the employee’s child’s school or care facility due to a public health emergency.

The CDLE has clarified that the HFWA does not require employers to provide a bank of paid sick leave that is separate and distinct from a bank of paid leave that can be used for vacation. Employers comply with the HFWA as long as their employees accrue paid time off at the minimum required rate and can use that paid time off for one of the above reasons.

The above accrual provisions have different effective dates based on the number of employees that work for an employer. For Colorado employers with 16 or more employees, the above provisions went into effect on January 1, 2021. The paid sick leave provisions will apply to all Colorado employers regardless of the number of employees on January 1, 2022.

During a declared public health emergency, the HFWA requires employers to supplement their employees’ paid sick leave, if necessary, so that employees can take the equivalent of two weeks paid sick leave for reasons related to the public health emergency. This means that employees who normally work 40 hours per week must be allowed to take 80 hours of paid sick leave, while employees who normally work 32 hours per week must be allowed to take 64 hours of paid sick leave. If an employee’s bank of paid sick leave is capped at 48 hours, then the employer must supplement another 32 hours of paid sick leave. If an employee’s bank of paid sick leave is capped at 80 hours, and the employee has accrued that much paid leave, then the employer does not need to provide supplemental leave. This supplemental leave is available until four weeks after the public health emergency is declared over.

The CDLE has confirmed that the on-going COVID-19 pandemic qualifies as a public health emergency and that the supplemental leave provision applies to all Colorado employers now.

COMPS Order #37
The most significant change in COMPS Order #37 is the increase in minimum wage from $12.00 per hour to $12.32 per hour. The minimum wage for tipped employees was also increased from $8.98 per hour to $9.30 per hour. In addition, the salary threshold for certain exempt employees (including exempt administrative, executive and professional employees) increased to $40,500.20 per year. The other changes in COMPS Order #37 concern revisions to specific employee exemptions, including the exemption for transportation workers, administrative employees and professional employees.

Employers must still display the most recent COMPS Order poster in a common area that is frequently used by employees. When displaying the poster in a common area is not practical — for instance, during a pandemic — employers must provide a copy of the COMPS Order poster to their employees. The most recent poster can be found at https://cdle.colorado.gov/posters.

Gary Benson has been practicing human resources law for more than 20 years. He is a partner at Dworkin, Chambers, Williams, York, Benson & Evans, PC where he counsels numerous businesses on their employment practices and procedures. In addition to being an experienced litigator, he is also a frequent lecturer on issues surrounding employment law and has presented for the Colorado Bar Association.

Sean O’Brien is an associate attorney with the Denver firm of Dworkin, Chambers, Williams, York, Benson & Evans, PC. Sean represents both employers and employees in federal and state court as well as administrative proceedings before the EEOC and the Colorado Civil Rights Division. He also regularly counsels clients, performs employee compensation audits, and reviews employment handbooks to ensure compliance with federal, state, and local employment laws.