Colorado Employer Update: Big Changes Ahead in 2021

By Lenora Plimpton

There are big changes ahead for Colorado Employers as two new employment laws take effect. On January 1, 2021, Colorado’s Equal Pay for Equal Work Act takes effect. Also on January 1, 2021, the new Healthy Families and Workplaces Act will take effect. These laws have significant impacts on Colorado employers and failure to comply can be very costly.

The Healthy Families and Workplaces Act, SB-20-205, was signed by the Governor and made into law on July 14, 2020. It takes effect for Colorado employers with 16 or more employees on January 1, 2021, and for all Colorado employers the following year, on January 1, 2022.  It allows sick workers to stay home for 48 hours of paid sick leave (i.e. six work days). Employees, both full time and part-time accrue this benefit at a rate of one hour of paid sick leave for every 30 hours on the job. This law allows employees to earn one hour of paid sick leave for every 30 hours worked, capped at 48 hours per year. Also of note is that the new law also broadens the two weeks sick leave mandated by the Families First Coronavirus Response Act to businesses with more than 500 employees (businesses that were previously exempt). The law prohibits retaliation and has detailed provisions relating to providing notice to employees. Additionally, the law allows for a private right of action

On equal pay, Colorado law previously was very bare bones: it simply prohibited “discrimination in the amount or rate of wages or salary in any employment in this state solely on account of . . . sex.” C.R.S. 8-5-102 (2019). The new law is significantly more thorough.

First: it makes it easier for an employee to show wage discrimination. The provides that an employer “shall not discriminate between employees on the basis of sex, or on the basis of sex in combination with another protected status” by “paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work.” C.R.S. § 8-5-102(1). It is worth noting that the law now defines “sex” as “an employee’s gender identity”—which is very interesting and essentially unprecedented. C.R.S. § 8-5-101(8). Also, strangely enough, as written, this law, as written appears not to prohibit paying a different rate to employees for substantially similar work if those employees share the same gender identity. In other words, among employees who share a gender identity (which would include cis-gendered individuals as well as transgender individuals), there can be no pay discrimination under the Equal Pay for Equal Work Act. Discrimination against a transgender or nonbinary person is of course still prohibited under the Colorado Anti-Discrimination Act as well as Title VII (and such discrimination would include pay discrimination).

If there is a “wage differential,” the employer is not liable for discrimination if the employer can demonstrate that the differential is based on (1) a “seniority system”; (2) a “merit system”; (3) a “system that measures earnings by quantity or quality of production”; (4) the “geographic location where the work is performed” (5) “education, training, or experience,” but only “to the extent that they are reasonably related to the work”; or (6) “travel,” but only if the travel is a “regular and necessary condition of the work.” But this is not all—even if the wage differential is based on one of these permissible factors, the employer must also demonstrate that it has applied the factor “reasonably,” that the factor “accounts for the entire wage rate differential,” and “that prior wage rate history was not relied on” to justify the disparity. C.R.S. § 8-5-102(1)

Some Next Steps for Colorado Employers:

– Conduct a “thorough and comprehensive pay audit” of your workforce, “with the specific goal of identifying and remedying unlawful pay disparities” by the end of 2020, and then at least once every two years.

– Make sure you are compliant with extensive and complicated new notice and workplace poster requirements of both laws.

– Update your employee handbook to reflect the requirements of these new laws.

– Review your sick leave policy and make sure it is compliant with the new leave requirements.

– Speak to a knowledgeable Colorado employment attorney at Fortis Law Partners with any questions or for help readying your business for these new requirements.

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