As anticipated, the Colorado Department of Labor and Employment (CDLE) issued an Interpretive & Formal Opinion (INFO) – “Transparency in Pay and Opportunities for Promotion and Advancement”.  While the INFO is helpful in some respects, CDLE continues to take a hardline on the definition of “promotional opportunity”.

We continue to digest the guidance but the highlights include clarifying that a “promotional opportunity” exists “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties, or access to further advancement.”

Further to this point, the INFO states that:

  • A vacancy in a new position exists when an employer:

(1) adds a position; or

(2) gives an existing employee a new position, including by changing their title, and/or materially changing their authority, duties, or opportunities.

  • A vacancy in a new position includes a lateral job change, or a promotion along a fixed, in-line career trajectory, for which a current employee is eligible.

Based on the following CDLE example, it is difficult to imagine an instance not covered by the Rules:

An employer automatically advances every Apprentice 1 to an Apprentice 2 when the employee passes a competency test. An Apprentice 2 has more advanced duties, higher pay, and access to future promotions unavailable to an Apprentice 1. This advancement is a promotion to a new position because the employer is creating an Apprentice 2 position each time it advances an Apprentice 1. However, if the promotion is promised in writing upon hiring in conformity with EPT Rule 4.2.5(B) , it may be exempt from the duty to provide notice of the promotional opportunity to other employees.

The INFO further confirms that while multi-state employers need not include compensation or benefits in notices to Colorado employees for positions outside of Colorado, it must notify Colorado employees of such promotional opportunities.

We will continue to digest the INFO guidance and provide updates soon.

We have learned that the Colorado Department of Labor & Employment anticipates publishing next week additional guidance on the Equal Pay Transparency rules’ promotional posting requirements.  In response to a request for clarification around in-line promotions, the CDLE informed us:

We believe your questions will be addressed by a forthcoming Interpretive Notice & Formal Opinions (“INFO”), which we expect to release next week. In addition to addressing your questions, this INFO will provide other clarification on the manner and timing of promotional opportunity notices.

We are anxiously awaiting this additional guidance and hope it will clarify the ambiguities and address the concerns raised by the EPT rules.  We will be sure to let you know when the “INFO” has been published.

The deadline for employers to comply with California’s pay data reporting requirement (Senate Bill 973) and submit pay data to the Department of Fair Employment and Housing (DFEH) is March 31, 2021.

The DFEH has launched an information page that provides needed clarity on certain obligations and has issued additional guidance on the pay data report’s contents — largely confirming certain assumptions and clarifying other requirements.

Submission will resemble EEO-1 Reports. Employers will report on its workforce by choosing a single pay period between October 1 and December 31 of each “Reporting Year,” referred to as the “Snapshot Period.” The submission will include the number of employees by race, ethnicity, and sex in each of the 10 EEO-1 Job Categories (following the EEO-1 Instruction Booklet) and within each of the “pay bands” used by the U.S. Bureau of Labor Statistics Occupational Employment Statistics classifications (even though California has a higher minimum wage):

$19,239 and under
$19,240 – $24,439
$24,440 – $30,679
$30,680 – $38,999
$39,000 – $49,919
$49,920 – $62,919
$62,920 – $80,079
$80,080 – $101,919
$101,920 – $128,959
$128,960 – $163,799
$163,800 – $207,999
$208,000 and over

The submission also will include:

  1. Total number of hours worked by each employee in each pay band;
  2. “Reporting Year,” “Snapshot Period,” “Report Type (establishment or consolidated),” and total number of reports submitted by the employer;
  3. Employer’s name, address, headquarters’ address (if different), Employer Identification Number, North American Industry Classification System (NAICS) Code, and Dun and Bradstreet Number;
  4. Number of employees inside and outside of California;
  5. Number of establishments inside and outside of California;
  6. Whether the employer is a state contractor;
  7. Name and address of the employer’s parent company or companies, if applicable;
  8. For a multiple-establishment employer’s establishment reports, the establishment’s name, address, number of employees, and major activity;
  9. For a multiple-establishment employer’s consolidated report, the names and addresses of the establishments covered by the consolidated report;
  10. Any clarifying remarks;
  11. Certification that the information is accurate; and
  12. Information on a company contact for the submission.

Multi-establishment employers file multiple reports. Multi-establishment employers must file multiple reports — a consolidated report and one for each establishment.

Employees outside California “count” toward 100-employee threshold. Both California and non-California employees count toward determining if an employer meets the 100-employee threshold. Temporary employees on payroll also “count” toward the 100-employee threshold. Moreover, an employer meets the 100-employee threshold by employing 100 or more employees during the “Snapshot Period” or by regularly employing 100 or more employees during the reporting year. Employers may not cherry-pick their snapshot period to avoid the reporting requirement.

Employers may exclude out-of-state employees from the submission. Not all employees must be included in the pay data reporting. Only “employees assigned to California establishments” must be included, but employers “may report to DFEH on its establishments and employees” outside of California. Employees teleworking from other states but “assigned to” a California establishment must be included in the report for their assigned establishment. Employees teleworking in California but assigned to establishments in other states must be reported in an establishment report covering only “those employees teleworking from California and who are assigned to a single establishment outside of California or all employees assigned to that establishment outside of California.” The DFEH provides the following example:

If an employer has one establishment in California with 50 employees (with three workers telecommuting from Nevada during the Snapshot Period) and one establishment in Nevada with 50 employees (with three workers telecommuting from California during the Snapshot Period), the employer would submit (1) an establishment report for their California establishment that covers all 50 employees, including those teleworking from Nevada; (2) an establishment report for their Nevada establishment that covers either only the employees teleworking from California or all 50 employees assigned to the Nevada establishment; and (3) a consolidated report that includes either all 53 employees in/assigned to California or all 100 employees.

According to the guidance, this flexibility is intended to permit employers to comply in the manner that is least burdensome.

DFEH anticipates option to report non-binary employees. The DFEH also contemplates reporting in a manner that permits California employers to report females, males, and non-binary employees separately.

The DFEH is expected to release additional guidance before the March submission deadline.

Jackson Lewis attorneys will continue to monitor California’s pay data reporting and other pay equity issues. If you have questions about compliance with SB 973 or related pay data reporting contact a Jackson Lewis attorney to discuss.

As anticipated, the Colorado Department of Labor and Employment has released final administrative rules implementing the new Colorado Equal Pay for Equal Work Act.  The final rules reflect comments received in writing and during a live, virtual, public hearing held on November 2, 2020.

Of primary concern to employers were the proposed rules’ job posting requirements for promotional opportunities and compensation disclosure.  The good news is the final rules are dramatically reduced in scope and address many of the concerns received in written comments and during a live, virtual, public hearing held on November 2, 2020.

Of primary concern to employers were the proposed rules job posting requirements for promotional opportunities and compensation disclosure requirement.  Both the scope and the content of the required postings were topics of discussion during the public comment period.  Positively, the final rules provide clarity around what constitutes a “promotional opportunity” and limit the requirement to include compensation information in postings to only those jobs to be performed in, or that are advertised in, Colorado.

Specifically, the final rules:

  • Explain a promotional opportunity which is required to be announced to current employees “exists when an employer has or anticipates a vacancy in an existing or new position . . .“;
  • Clarify that “reasonable efforts” to announce the promotional opportunity are satisfied by posting where employees can access either online or in hard copy and are told where to find the postings or announcements;
  • Provide exceptions to the promotional posting requirement for (1) compelling confidentiality needs, (2) automatic promotion after a specified initial “trial” hiring period, and (3) temporary, acting or interim hires;
  • Clarify that the promotion posting requirements DO NOT apply to employees outside of Colorado; and
  • Clarify that the compensation posting requirements DO NOT apply to jobs to be performed outside of Colorado or postings outside of Colorado.

These rules offer peace of mind to nationwide employers who have been struggling to develop and implement processes and procedures to comply with the requirements of the new law.  However, there are still some ambiguities in the new language that may create questions.  We will keep you updated on developments and interpretations.

At the end of California’s 2020 legislative session, Governor Newsom signed Senate Bill 973 (SB 973), which created pay data reporting requirements for employers starting in March 2021. However, the new legislation left some uncertainty for employers in several areas.

The Department of Fair Employment and Housing (DFEH) promised in mid-October that it would be issuing a Frequently Asked Questions page to assist with compliance. On November 2, it did so—at least partially.  The current page includes additional information on whether the pay data may be released publicly (DFEH may release it, but only in aggregated form) and data privacy and protections (DFEH may not release individually identifiable information publicly).

Please find the rest of this article in our California Workplace Law Blog.

On November 2, 2020, the Colorado Department of Labor and Employments’ Division of Labor Standards and Statistics held a public hearing to solicit comments about Colorado’s proposed Equal Pay Transparency Rules.  The proposed rules will implement Colorado’s New Equal Pay for Equal Work law that goes into effect January 1, 2021.  The hearing focused on the rules concerning pay information in job postings and announcements of promotional opportunities.  The Division is continuing to collect written comments and will publish final rules on or before November 10th.

The comments presented during the hearing were focused on the following primary themes:

  • Providing clarity around the term “promotional opportunity.”  Specifically, that the rules should clarify that such an opportunity should only include competitive promotions and not “in line” or experience-based progressions.
  • The rules regarding required postings are impractical in that they do not contemplate the need for confidential job searches or use of executive search firms.
  • The rules could put Colorado-based companies at a competitive disadvantage as compared to non-Colorado companies, and will require disclosures of proprietary compensation strategies to competitors who may not be under same rules.
  • The rules could lead to national employers shifting work away from Colorado and/or restricting remote work so that employees could work anywhere, but Colorado.
  • The proposed requiring compensation and benefit information on job postings outside of the state and/or for jobs that will be performed outside the state exceed the Department of Labor and Employment’s authority and the rules should be limited to jobs located in Colorado.

There was also a discussion of the potential legal challenges being contemplated by employers, including potential violations of the U.S. Commerce Clause based on conflicting state laws.

The Division has received a lot feedback on these proposed rules (verbal and written).  We will be watching closely for the final rules to be published on or around November 10.

On September 29, 2020, The Colorado Department of Labor and Employment published proposed Equal Pay Transparency Rules (“EPT Rules”) providing guidance for implementation of the state’s new Equal Pay for Equal Work Law set to go into effect January 1, 2021.  They also published a corresponding Statement of Basis, Purpose, Specific Statutory Authority and Findings.

The proposed rules address two general areas of the new pay law:

  1. Complaint, Investigation and Appeal Procedures

The proposed rules seek to set out the process for investigation procedures and protections and provides in depth detail for the process of complaint filings, service and deadlines, determinations and appeals.  The rule draws primarily from the Wage Protection Act Rules that govern the wage complaint process in Colorado.

  1. Job Posting Requirements

One of the most debated areas of the new law centers around the unique obligation for Colorado employers to provide compensation information and description of benefits on their job postings as well as make opportunities for promotions known to their employees.

The proposed rules provide additional guidance around the how employers can comply with the compensation disclosure requirement by instructing that

“Employers must include the following compensation and benefits information in each posting: (1) the hourly rate or salary compensation (or a range thereof) that the employer is offering for the position, including any bonuses, commissions, or other forms of compensation that are being offered for the job; and (2) a general description of all employment benefits the employer is offering for the position, including health care benefits; retirement benefits; any benefits permitting paid days off, including sick leave, parental leave, and paid time off or vacation benefits; as well as any other benefits that must be reported for federal tax purposes; but not benefits in the form of minor perks.”

The proposed rules go on to explain that

“[a] posted compensation range may extend from the lowest to the highest pay the employer in good faith believes it might pay for the particular job, depending on the circumstances. An employer may ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.”

With respect to promotional opportunities, the propose rules suggest that to comply with the requirement to make “reasonable efforts” to announce, post or otherwise make known all opportunities for post or otherwise make known all opportunities for promotion to all current employees . . .” the communication

“must be in writing and include at least (A) job title, (B) compensation and benefits per Rule 2.2, and (C) means by which employees may apply for the position.”

The proposed rule includes a description of “reasonable efforts” and explicitly states employers “may not limit notice to those employees it deems qualified for the position, but may state that applications are open to only those with certain qualifications.”

In the last section, the proposed rules provide much needed guidance on application of the notice requirement to positions to be performed outside of Colorado.  In the proposed rules the Department takes the position that for a role to be performed in Colorado “if the employer accepts applicants from outside Colorado, it must notify all of its employees in any state for whom the job would be a promotion” as well as include compensation and benefits on the posting.  The rules also proposes that if a Colorado employer has a job that can be performed anywhere (e.g. remote) or outside of Colorado, but posts the job by electronic means accessible in Colorado it must include compensation and benefits in the postings. The company must also notify its employees for whom the job would be a promotion.  Essentially, if a Colorado employee (or resident) can apply for the position (even if the role is outside of Colorado) the posting must comply with the transparency regulations.

As a reminder, these are proposed rules and subject to revision based on public comment.  As currently scheduled, the rules will be finalized just prior to the law’s January 1 effective date.  We will continue to monitor and report on any developments and the final rules when published.

In a continued effort to reduce gender and racial pay gaps, on September 30, 2020, California Governor Gavin Newsom signed into law Senate Bill 973, which creates massive pay reporting requirements for employers.  In 2021, certain California employers will be required to submit annual information on its employees’ pay data by gender, race, and ethnicity to the state’s Department of Fair Employment and Housing (DFEH).  A similar bill was introduced last year (following the EEOC’s court battle), but it failed to clear the necessary hurdles before the end of the legislative session. This year, however, it crossed the finish line.

Please find the rest of this article on our California Workplace Law Blog.

In the next chapter of the EEO pay data collection story, the EEOC announced today it has contracted with the National Academies of Sciences, Engineering, and Medicine’s Committee on National Statistics (CNSTAT) to, “conduct an independent assessment of the quality and utility of the EEO-1 Component 2 data for FY 2017 and 2018.”

This is not an unexpected move and in large part, anticipated, especially after remarks by Commissioner Victoria Lipnic and others after the Agency collected the data as required by court order last year.

Please find the rest of this article on our Affirmative Action & OFCCP Law Advisor.

Virginia has adopted a pay transparency law that prohibits employers from discharging or taking any other retaliatory action against an employee for discussing wages or compensation with another employee. The new law was passed on April 22, 2020, and becomes effective on July 1, 2020.

Please find the rest of this article on the Jackson Lewis publications page here.