The General Assembly on Tuesday passed SB 85, the “Equal Pay for Equal Work Act,” which has been amended in both the Senate Judiciary Committee and the House Business Affairs and Labor Committee to address the concerns of the Colorado Chamber and its business allies.
Because of the amendments, the Chamber has changed its position from “opposed” to the introduced bill to “neutral” on the current version.
Next step for the bill is a final, recorded vote on Third Reading. Because the bill was amended in the House, it must return to the Senate for concurrence. If that happens, then the bill goes to Governor Jared Polis for his signature.
Representative Tracy Kraft-Tharp (D-Arvada) told the House Members during the Second Reading debate that her committee, the Business Affairs and Labor Committee, on April 17th added four amendments to “really try to level the playing field” for both workers and employers when addressing complaints of wage discrimination based on sex. The bill needs to be fair to both employers and workers, she said.
The amendments added to the bill would:
- Create a process in the Labor Division of the Colorado Department of Labor and Employment to mediate a complaint between an employer and a worker. If the employee is not satisfied with the outcome, he or she can then proceed to the Colorado Civil Rights Division (CCRD) to file a complaint. If the worker is still not satisfied with the CCRD’s actions to resolve the issue, then the worker can proceed to file a lawsuit in court.
- Create a “rebuttable presumption” for the employer to present evidence that it did not discriminate against a worker if it failed to keep accurate records pertaining to the employee’s claim.
- Provide a “safe harbor” clause for the employer that conducted a “thorough and comprehensive pay audit of its workforce” to specifically determine and remedy “unlawful pay disparities” within two years before the worker initiated a civil action.
The March 22nd Fiscal Note, issued March 22nd, reflects the amendments added in the Senate Judiciary Committee with this summary:
This bill modifies wage discrimination law and creates new provisions regarding transparency in wages and promotions. It removes the authority of the Department of Labor and Employment (CDLE) to enforce sex-based wage discrimination complaints and allows a person to commence a civil action in district court within two years of a violation. A person aggrieved by a violation may obtain relief for back pay for the entire time the violation continued for up to three years. A wage differential is allowed where the employer can demonstrate that the wage differential is based on a seniority or merit system, or a system that measures earnings by quantity or quality of production. Employers are prohibited from seeking the wage history of a prospective employee; discriminating or retaliating against a prospective employee for failing to disclose his or her wage history; or prohibiting an employee from disclosing wage information. Employers who violate sex-based wage discrimination law are liable for economic damages and equitable relief and the employee’s reasonable costs, including attorney fees and other legal expenses.
The bill also requires employers to make reasonable efforts to notify all current employees of promotion opportunities on the same day and prior to making a promotion decision. Employers are required to disclose an hourly wage rate or range for all job postings. The CDLE has the authority to enforce the wage and promotion transparency provisions and employers are subject to penalties of $500 to $10,000 per violation. If an employee who brings suit for wage discrimination also demonstrates a violation of the wage and promotion transparency provisions, the court may order appropriate relief, including a presumption that records not kept by the employer can be considered evidence that the violation was not made in good faith.
Loren Furman, Senior Vice President of State and Federal Relations with the Colorado Chamber, testified on the bill before the Senate Judiciary Committee on February 20th.
Loren strongly underscored the costly consequences of creating a new private right of action against an employer, which would only encourage a litigious environment between employees and employers. A more effective process, she said, would be to encourage an administrative process to resolve issues through an entity like the Colorado Civil Rights Division before taking them to court.
Loren applauded the overall goal of the bill and said she hoped to work with lawmakers to ensure that a new law results in good policy. “It’s always in the employer’s best interest to have strong working relationships between an employer and an employee, to treat them equally,” she said.
Ultimately, through the leadership of Judiciary Committee Chair Pete Lee (D-Colorado Springs) and agreement by the sponsors, the Committee passed the bill with several amendments that improved the bill significantly for the business community:
- Changing the requirement for employers to maintain records for back pay from six years to three years.
- Changing the effective date of the bill from January 1, 2020, to January 1, 2021, allowing more time for employers to come into compliance.
- Striking language to address concerns about the need to re-post a job if an applicant negotiates outside of the posted pay range.
- Establishing that, if an employer has operated in good faith, a court should not have the discretion to award liquidated damages.
- Expanding the factors considered for pay differentials to include geographic location, education, training, experience and travel.
- Expanding the definition of “substantially similar work.”
- Clarifying that workers have the option of seeking a wage-disparity claim through the Colorado Civil Rights Division.
For more information on SB-85 and the changes made by the Senate Judiciary Committee, read:
“Colorado Chamber & Business Community Secure Significant Changes to Equal Pay Bill to Reduce Expensive Litigation for Employers,” Colorado Chamber Capitol Report, February 22nd.