Is Colorado “Equal Pay” Law Excluding Remote Workers?

Is Colorado “Equal Pay” Law Excluding Remote Workers?

A new state law in Colorado attempted to close gender pay gaps. Instead, the “Equal Pay for Equal Work Act” is excluding Colorado candidates from remote work positions.

The main issue with SB 19-085, passed in the Colorado State Legislature in 2019, is how it requires transparency with information on salaries and benefits, “Employers are required to disclose the hourly or salary compensation or a range of hourly or salary compensation for all job postings.”

Colorado State Senator Jessie Danielson said that forcing employers to post the salary range and benefits for jobs will protect candidates from being hired for much less than their predecessors.

Now large and small companies are finding creative ways to circumvent the law in what someone correctly summarized as “Unintended consequences: A law designed to help Colorado job hunters ends up hurting them instead.”

As the American workforce and economy shift how employees are working due to the Covid-19 pandemic, Colorado lawmakers may be cutting their citizens out of consideration for the growing remote work movement.

Nike, IBM, and Johnson & Johnson are among the large companies that specifically state a remote worker may not live in Colorado and apply for remote work positions. Nike’s job postings go as far as saying any candidate from Colorado must relocate. Drizly, an alcohol delivery and e-commerce company, lists two different job postings; one for candidates in Colorado and one for the rest of the country.

Other big companies like Amazon are citing a salary range, noting the new Colorado state law as the reason, according to The New York Post.

Even California, with its highly progressive labor laws, has no requirement for posting the salary range for private companies. According to the Shouse Law Labor Group, employers are required to provide a pay scale for a position if asked.

Proponents argue that companies want to hire candidates on the cheap, and a posted pay range ensures fairer pay. Opponents say that forcing companies to list a salary range is anti-competitive and could give their competitors insight into their salary and benefits structure.

Both arguments have merit, but should lawmakers be pushing policies that effectively alienate their workforce? With over nine million open jobs and a switch to remote work that could become permanent for some firms, states like Colorado could be hampering their economic recovery with the unintended consequences of legislation like the Equal Pay for Equal Work.

That could spell trouble with remote work growing more than 400 percent in the past decade, especially in industries like tech, SaaS, and AI.

California has worn the crown for years for unintended consequences in the workforce imposed by state lawmakers: think AB5 and the crushing of the gig economy or any number of bills that make the California Chamber of Commerce’s annual “Job Killers” list. To preserve good job opportunities for those who work remotely, Colorado’s law should not emulate similar policies from the Golden State.

Evan Harris is the media relations and outreach manager at PRI.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.