Only 3 employers fined for violating Colorado’s new pay transparency law

As it grew over the past year, no one at Monigle Associates was paying much attention to emails from the Colorado Department of Labor and Employment. The letters began last July. This notice came in December:

NOTICE OF PENALTY FOR FAILURE TO COMPLY WITH DIVISION ORDERS AND ORDER TO RESPOND

The Denver brand firm was not in compliance with a new state law that requires job listings to include wages. Some listings did not share wages. Others had no maximum amount, just a + sign, as in “Salary range: $70,000 – 95,000+.” And some openings offered “full benefits” but no description of what those benefits were. They were all rapes.

Monigle paid the $8,000 fine and unknowingly became the first company to do so as part of the Colorado Equal Pay for Equal Work Act. The law, which came into effect on January 1, 2021, was intended to help close the gender pay gap where women earn less than men for the same job.

Last year, the labor department warned hundreds of employers that wages must be listed in jobs and that Coloradans should not be excluded from remote work opportunities. But other, less publicized elements of the law have created confusion or additional work for businesses. Most complied after a warning. Three, including Monigle, were fined.

Chalk Monigle’s fine up to a hiring spree, a new applicant tracking system and, like many small businesses, a small human resources team that made it difficult to keep track of the complexities of new labor laws, said Nichole Albertsmeier, chief financial officer. and company administration. official.

“We are very aligned with the spirit of the act and transparency. It directly aligns with our desire to continue to foster an equitable work environment,” said Albertsmeier. “We literally had 67 open internal positions. And we hired 61 people in (2021). And we have a staff of 1 ½ people in (human resources)”.

Equal Pay Violations

There is a online form to report wage transparency violators. The state labor department also hired a temporary worker last year to investigate complaints against companies that had deliberately excluded Colorado applicants. He is still employed there, the labor department said. While the agency was more lenient last year when the law took effect, the state has notified more than 200 businesses of violations and is now issuing fines.

By numbers, these include:

  • 129 — Compliance Assistance Letters for Remote Jobs
  • 122 — Opportunity to cure letters that provide employers with an opportunity to cure blatant violations, sent in response to a complaint of any type of violation (not limited to remote work)
  • 3 — Employers fined
    • Monigle, $8,000 (paid)
    • SpotOn Transact LLC, $34,500 (not yet due)
    • Advanced Circuits Inc., $2,000 (waived after serving)

Aaron Batilo, the Commerce City engineer who created ColoradoExcluded.com to crowdsourcing violations, he said he’s received between 600 and 700 job offers at 200 companies, but there isn’t much activity anymore.

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While the state department of labor says most businesses comply after learning of a violation, the Equal Pay law continues to create confusion for employers across the state.

Sherman & Howard, one of Denver’s oldest law firms, has seen inquiries decline, but “we still get calls on a daily basis,” said Beth Ann Lennon, an attorney who advises multiple international and national employers on all employment matters. . problems.

And they are not always questions about Colorado law, but similar legislation in other states.

“With the way that Colorado wrote the Equal Pay for Equal Work Act, they were at the forefront when it comes to what is called the transparency part of the law, the posting requirements,” Lennon said. “Many states are following his example.”

Other states, like California, had equal pay laws, but Colorado is considered the more aggressive due to the requirement to publish salaries publicly, according to the Society for Human Resource Management. Other states left it up to job seekers to apply for wages, so the information was not widely known. But even California is now working on reforming its law.

“The Colorado law really started a conversation among employers,” said Andrea Johnson, director of state policy and workplace initiatives at the National Women’s Law Center. “And a few years later, we now have a different job market, a tighter job market where employers are starting to provide value ranges voluntarily, even if they’re not in a state with a law, because they know it helps attract candidates.” .

Similar pay transparency laws have been passed in eight states, including Connecticut, Maryland, Nevada and New York. The Rhode Island law goes into effect in January.

But the laws add additional concerns for employers who have operations, or at least one worker, in multiple states.

“Most employers want to make sure that they pay people properly and that there is no pay gap,” Lennon said. “A real practical problem here is that unfortunately, in my opinion, many of these laws were not fully thought out or well written and there are unintended consequences. Being the employer trying to navigate how you can meet what is expected of you has been a particularly onerous challenge.”

In Colorado, there is also a rule that companies should share promotion opportunities with existing employees, even if few are qualified. This level of transparency creates discomfort for companies that, for example, want to move a senior partner into a specific role, something that has been done for years to reward top performers. Now they must disclose the promotion to all workers.

“All those opportunities should be published. You should have the payment and benefits information there,” Lennon said. “We have a whole team of managers and executives who have been running their companies (like this) for decades, saying, ‘This person has been doing really well. Let’s promote them and give them more responsibility’… and make that decision without ever publishing it. … That is now a violation of the law.”

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get to pay equity

However, from a worker’s perspective, having additional knowledge of what a job will actually pay creates a starting point that helps workers in the long run, even if it’s not an instant fix for the pay gap, said Michelle Jones, President of BPT Staffing at Centennial. , which locates IT workers of color.

“At least it helps you figure out what roles to apply for,” Jones said. “It gives you a floor and I think for the most part people are in the middle, or if they feel super competent and know we have a shortage of tech talent, they’ll say, you have to be in the upper range or I’m not even interested. ”.

Only 3 employers fined for violating Colorado's new pay transparency law MICHELLE JONES 06302022016
Michelle Jones, center, founder and president of BPT Staffing, helps workers of color find jobs in the technology/IT industry. Working out of the Village Workspace, Jones spends a few moments visiting with the space’s owners during an ice cream social hosted for its patrons. (Kathryn Scott, special for The Colorado Sun)

Companies need to go beyond pay transparency if they really want to address pay equity. Jones suggests auditing your own salaries. If they notice in their salary audits that a Hispanic business analyst at one level is being paid less than a male business analyst at a lower level, that should raise a red flag that something isn’t quite right, he said.

“They need to see where the really big gaps are and ask why they are there. Because if the gap is that big, they probably don’t need to hire that person. Maybe they’re not acting. Maybe they’re not getting the skills they need and that’s why the gap exists,” he said. “It’s almost better to give that person the opportunity to go somewhere else to earn a higher salary than to knowingly keep them on staff and pay other people 30% more for the same work.”

David Seligman, who supported the new law as executive director of Towards Justice, said there is evidence pay transparency is working in Colorado. Workers have greater bargaining power as employers are desperate to fill vacancies. Some of that has to do with competition for workers as businesses reopen in the pandemic. But the state’s median salary has grown faster than the rest of the nation.

According to US and state data from the Bureau of Labor Statistics, average hourly wages in Colorado increased 11.5% between January 2021 and May 2022, while US wages grew 6 .7%. In dollar terms, that’s $34.62 an hour in Colorado as of May, compared to $31.95 in the US.

“The way we know the law is working is that there was some initial resistance from the employer to disclosing the salary,” Seligman said. “That resistance comes from a desire not to undermine women or people of color who might not otherwise take such an aggressive position when it comes to negotiating higher wages, but because when you start disclosing the wage, employers lose some of their competitive advantage. .”

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In other words, he added, employers already have an idea of ​​what they’re willing to pay and how much their competitors are making. But they are trying to find out how much the prospective worker will accept.

“They lose the advantage of an information asymmetry that employers often have, which means that we have an idea of ​​what we are going to pay and what our competitors are paying, but we are not going to reveal that to workers in the hope that they can negotiate their salaries or they will be able to hire someone with a low offer,” Seligman said.

Women are still paid less than men even though profits have been made over the years. And not knowing the true top hurts women and people of color who haven’t been in the room before and prevents them from getting to pay equity in the first place, Jones said. And if pay ranges aren’t honest, that doesn’t really help pay equity.

“I had a company tell me, ‘Put $56 to $100 an hour, but if he’s a good fit, we’re willing to go up to $150.’ So I said, ‘Let’s put in $150 because the first question they (companies) ask is where do you want to be in terms of salary?’ If you shoot for $70, you’ll never see that $150,” Jones said. “You are almost forced to choose where you are going to go and you are afraid that you will overdo it and lose your job.”

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Only 3 employers fined for violating Colorado's new pay transparency law

Johnson of the National Women’s Law Center said that ideally a federal law would help employers across the country establish uniform policies for all workers rather than change by state. And that equips job seekers with the information you input, rather than learning later that a less-experienced colleague is earning much more.

“This is not a complicated regulatory regime or a complex benefit,” Johnson said. “It’s just telling employers that they know what they’ve budgeted for a position. Now be transparent about it. There are so many bottom line benefits to transparency, especially in terms of attracting candidates and retaining talent. … We know that when salary ranges are available to applicants, it helps close gender pay gaps.”


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Only 3 employers fined for violating Colorado's new pay transparency law

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