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Equal Pay, Minimum Wage, and the Newest Colorado Employment Laws

By Larry Lee

Colorado lawmakers have had a busy legislative session. Six new employment laws were enacted in the state addressing equal gender pay, criminal history inquiries, felony convictions for wage violations, local government rule for minimum wage, garnishments and a study of a family and medical leave insurance program. Here’s the highlights and effective dates.

 

Colorado the 10th State to Pass Equal Pay for Equal Work

Effective January 1, 2021

Governor Polis signed the Equal Pay for Equal work Act (SB19-085) on May 22, 2019, which prohibits an employer from discriminating between employees on the basis of gender/sex, or on the basis of gender/sex plus another protected status, by paying one employee a wage rate less than the rate paid to an employee of a different sex for substantially similar work.

“Substantially similar work” is determined without regard to job title and based on a composite of skill, effort, and responsibility. Shift work may also be considered. Colorado is the tenth state in the U.S. to pass an equal pay law that is more demanding than federal law.

The law, however, has five exceptions to be considered. A different rate may be paid when it is based on a system of seniority, a merit system, a system measuring for earnings by quantity or quality of production, geography locale where the work is performed; education, training or experience, or travel, if it is a regular and necessary condition of the work performed.

Prior wage history may not be relied upon to justify a disparity in current wage rates. In other words, employers are prohibited from seeking prior wage history as well as “discriminating” or “retaliating” based on a prospective employee’s failure to disclose wage history. Finally, employers may not prohibit an employee from discussing their wage rate, otherwise it may be considered unlawful retaliation.

Violations of this equal pay law are liable for back pay for up to three years as well as liquidated damages in an equal amount to compensate the employee for the delay in receiving amounts due. If, however, the employer’s pay disparity was shown to be have made in good faith, then the employer does not have to pay liquidated damages. This defense can be successfully support by a comprehensive pay audit performed within the previous two years.

Since this law takes effect the beginning of 2021, employers should plan for and conduct pay audits sooner than later. If the results of the audit show pay disparities between employees that are performing substantially similar work, and no exception applies, then it would be best to immediately address and resolve the differences.

 

Limiting Criminal History Inquiries

Effective September 1, 2019, for employers with 11 or more employees, and effective September 1, 2021, for all employers.

The Limits on Job Applicant Criminal History Inquiries law (HB19-1025) prohibits employers from stating on a job application or advertisement for an employment position that a person with a criminal history may not apply for the job. Further, employers may not inquire about or require disclosure of an applicant’s criminal history on an initial application form.

The employer may inquire later in the hiring process as well as obtain a job applicant’s publicly available criminal background report at any time.

There are three exceptions that allow employers to publish statements geared towards applicants with criminal histories: 1) when a law prohibits a person who has a particular criminal history from being employed in a particular job; (2) when the employer designates a position for participation in a program to encourage employment of people with criminal histories; or (3) when the employer is required by law to conduct a criminal history record check for a particular position.

At the minimum, it would be best for employers to delete out any criminal history questions from its job application as well as ensure that its job advertisements comply.

 

Criminal Penalties for Wage Violations

Effective Jan. 1, 2020

Penalties for Failure to Pay Wages (HB19-1267), was signed into law by Governor Polis. The act dictates that those employers that willfully refuse to pay a wage claim or falsely deny the validity of a wage claim in an amount over $2,000 may be liable for felony theft.

The penalty for employer theft ranges from $50 to $1 million, depending upon the circumstances of the crime and the amount stolen.

This provision generally applies to those employers covered by the federal Fair Labor Standards Act (FLSA). Such employers have an annual dollar volume of sales or business of at least $500,000 or are engaged in interstate commerce.

 

Local Government Minimum Wages

Effective Jan. 1, 2020

HB19-1210 permits local governments to set local minimum wages for employees expected to perform four or more hours of work in any given week physically within the local government’s jurisdiction.

Local minimum wage rates may exceed the state minimum rate (currently $11.10 per hour) by up to $1.75 or 15 percent each year. If 10 percent of local governments enact a higher rate, additional increases are prohibited pending action by the legislature.

 

Wage Garnishment Reform

Effective Jan. 1, 2020

Wage Garnishment Reform (HB19-1189), signed into law on May 20, 2019, modifies the amount subject to garnishment from 25 percent to 20 percent of the individual’s disposable weekly earnings, and from 30 times to 40 times the amount an individual’s disposable earnings for a week exceed the state or federal minimum wage.

Currently, the cost of court-ordered health insurance for a child provided by an individual is deducted from the individual’s disposable earnings subject to garnishment. Under this new law, any health insurance that is provided by the individual’s employer and voluntarily withheld from the individual’s earnings may also be deducted from their disposable earnings subject to garnishment.

The new law applies to all writs of garnishment issued on Jan. 1, 2020 or thereafter, regardless of the date of judgment that is the basis for the writ of garnishment.

 

Family and Medical Leave

Pending consideration after further study by a task force

The highly-publicized FAMLI Family Medical Leave Insurance Program (SB19-188) signed into law on May 30 orders a task force to further study the issues and report the legislature by Jan. 8, 2020. The bill as passed retains the original bill’s timeline for the program to be funded by 2023 and benefits to be paid starting in 2024.

Larry Lee provides employers with the best practical and compliant solutions to difficult workplace issues. He can be reached at llee@joneskeller.com.

 

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