The Colorado legislature has passed the Ensure Equal Pay for Equal Work Act, amending the Equal Pay for Equal Work Act (EPEW) to clarify and enhance an employer’s obligations relating to the announcement of a promotional opportunity.  The effective date is January 1, 2024.  Why does this matter to Michigan employers?  Because Michigan is seemingly taking all of the progressive employment initiatives throughout the country and trying to pass them into law before the next election cycle. 

The initial law, passed in 2021, required that all job postings, regardless if they’re posted internally or externally, must include three things:

• The hourly or salary pay -- either an exact amount or a range -- offered for the position.
• A general description of the bonuses or other compensation components tied to the job.
• A general description of the company’s benefits, including health care, retirement, and paid time off. The posting does not need to detail premium costs or coverage specifics, but should, at a minimum, describe the nature of the benefits, i.e. this job comes with two weeks’ vacation time.

Hiring managers don’t need to list every employee perk, just the benefits that are tax-reportable.

The original law also provided that employers make a “reasonable effort” to notify employees of promotions.  It required that notice of a promotional opportunity be made in writing, is available on the same day to all employees for whom it would be a promotion, and is posted with enough advance notice to allow employees a reasonable amount of time to apply for the position.

The amended law provides more information for compliance for the promotion requirements. Specifically, the law makes definitions for the terms “career development,” “career progression,” “job opportunity,” and “vacancy.” The term “promotional opportunity” is not defined or used in the Act.

“Job opportunity” is defined as “a current or anticipated vacancy for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts.” Job opportunities do not include “career development” or “career progression” (as was the case under the original law). A “vacancy” is “an open position, whether as a result of a newly created position or a vacated position.”

“Career development” is defined as a “change to an employee’s terms of compensation, benefits, full-time or part-time status, duties, or access to further advancement in order to update the employee’s job title or compensate the employee to reflect work performed or contributions already made by the employee.”  “Career progression” means “a regular or automatic movement from one position to another based on time in a specific role or other objective metrics.”

The amended law also adds new requirements for employers.  For each job opportunity, employers must disclose to employees, in good faith:

• The hourly or salary compensation or the range of the hourly or salary compensation;
• A general description of the benefits and other compensation applicable to the job opportunity; and
• The date the application window is anticipated to close.

Further, within 30 days after a candidate is selected to fill a job opportunity begins working in the position, employers will need to make reasonable efforts to announce, post, or otherwise make known to the employees with whom the selected candidate is intended to regularly work, at a minimum:

• The name of the candidate selected for the job opportunity;
• The selected candidate’s former job title if selected while already employed by the employer;
• The selected candidate’s new job title; and
• Information on how many employees may demonstrate interest in similar job opportunities in the future, including identifying individuals or departments to whom the employees can express interest in similar job opportunities.

In positions with career progression, employers must disclose and make available to all eligible employees the requirements for career progression, along with each position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement.

These requirements are becoming onerous for employers, as much as the intent is to make promotions more transparent.  Regulations are expected by July 1, 2024.  For employers in Colorado, it will make them wonder whether they should continue operations in the state.  For non-Colorado employers who have employees in the state, they must abide by the law. 

So, in part this law will impact Michigan employers with employees in Colorado.  However, it is now a law that the current Michigan legislature might try to replicate.

Source:  Jackson Lewis 5/19/23, CBIZ