New Year Brings New Regulations for Business Community
2020 was hard in so many ways. The pandemic challenged us in ways we couldn’t have anticipated: many of us went remote, started to provide services and goods online, navigated lower revenues and grappled with how to keep our employees and customers safe during a global pandemic. On top of the vast health and economic challenges we experienced this year, it was also a year with a lot of policy changes for employers and the business community. As we usher in 2021, we want to highlight a few key changes going into effect on the first of the year.
Equal Pay for Equal Work Act. The Equal Pay for Equal Work Act goes into effect on Jan. 1, 2021. This is critical for you to know because it impacts how you post jobs and pay employees. The law prohibits employers from paying different wages to employees who perform substantially similar work on the basis of sex — a policy long supported by our employers. What that means to you is that you may need to audit pay for your employees. In addition, you may not ask the salary history of a prospective employee or rely on their wage history for determining their pay. How you post jobs may need to change, too. You must include compensation scales and general descriptions of benefits in your Colorado job postings. You can view our webinar and read more about the rulemaking for this law here. Our investor and partner, Employers Council, has a guide to assist employers in complying with these new requirements as well.
Paid Sick Leave. While the federal requirements for paid sick leave expire Dec. 31, 2020, a new state law regarding paid sick leaves takes effect starting Jan. 1, 2021. Companies with 16 or more workers need to provide at least one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours per year. In 2022, this will extend to employers of any size. An employee begins accruing paid sick leave when the employee's employment begins, may use paid sick leave as it is accrued, and may carry forward and use in subsequent calendar years up to 48 hours of paid sick leave that is not used in the year in which it was accrued. The law also requires additional paid sick leave for companies of any size during public health emergencies like the pandemic.
Unemployment Insurance. Starting Jan. 1, 2021, the premium rate structure for unemployment insurance will be shifting from the third lowest rate to the second highest rate based on a reserve ratio between 0.000 to 0.0004. The specific rate an employer will pay is based on their experience rating, which varies among employers. The solvency surcharge has been suspended for 2021 and 2022 but will likely return in 2023, however your rates are still likely to change due to the rate changes. For more information and to reach out directly with questions, visit the Colorado Department of Labor and Employment website.
Minimum Wage. The statewide minimum wage is set to increase on Jan. 1, 2021, with an additional increase for the City and County of Denver. The state will increase to $12.32 per hour while businesses that operate in Denver will increase to $14.77 per hour. Tip credits of up to $3.02 per hour are allowed for both the state and the city minimum wages.
Paid Family Leave will begin collecting premiums in January 2023. While the collection of this employment tax is a few years out, we want you to know that we are already working with the state on how this ballot issue will be implemented. Colorado voters approved Proposition 118 this past November, requiring that employers provide 12 weeks of paid time off for childbirth and family emergencies. While premium collection doesn’t begin until 2023 and the program will launch in 2024, it’s important for employers and employees to start preparing for this change. We are working with state lawmakers and officials to provide input on setting up the billion-dollar-a-year program, hoping to ensure the program is fiscally secure, it has a clear and efficient opt-out process, and the system is in place for private insurers to enter the market to increase the likelihood that employees and employers can have more competitive rates and benefits.
We know what a challenging year this has been. We are so grateful for how hard our employers have worked to keep employees on payroll and companies viable. We are looking to a future where we can see each other again and get more employees back to work following broad distribution of a vaccine. We are also hopeful of the potential for added relief for the many who are struggling right now.
We will continue to devote our efforts to supporting you and your employees and we wish you all a New Year that brings health, success and happiness.
Thank you for investing in us and making this work possible.
Kelly Brough is the president and CEO of the Denver Metro Chamber.
On Jan. 1, 2021, Colorado’s Equal Pay for Equal Work Act will go into effect, impacting every employer in the state. A rulemaking hearing is scheduled for early November regarding implementation of this law and providing additional specifics for employers. While we have heard from a number of our employers regarding this law, we want to invite all of you to share any concerns or issues that we should seek to clarify during the hearing process.
Below is a summary of the law:
The law aims to increase pay transparency as a strategy for closing the gender pay gap. It imposes significant new notice and recordkeeping requirements and encourages companies to regularly self-audit their compensation practices.
Employers will no longer be able to ask the salary history of a prospective employee or rely on their wage history for determining the employee’s pay. Only in limited circumstances can an employer justify pay differentials based on gender, such as:
The law also includes requirements pertaining to how employers must post jobs and maintain records, including employers with employees outside Colorado. Employers are required to post all job openings and promotions within the company and disclose the hourly or salary compensation and benefits associated with the position.
While the law passed in the 2019 legislative session, the details are currently being hammered out in a rulemaking process in the Division of Labor Standards and Statistics, which is part of the state’s Department of Labor and Employment. A public hearing is set for Monday, Nov. 2 at 9 a.m. Learn more about the hearing and read a copy of the proposed rules and instructions for submitting your own comments.
As mentioned above, we’ve heard from several members who are concerned about potential unintended consequences of various details that will be considered in the rulemaking, including job-posting requirements. We are working with legal counsel and concerned members to capture feedback to submit in the hearing. Please reach out to us directly if you have concerns that you would like to have represented in the rulemaking process by emailing Dorothy Jones at Dorothy.Jones@denverchamber.org.
To learn more about the Equal Pay for Equal Work Act, you can view our all-member webinar or review this overview document from Employers Council.
As we start the New Year, we want to ensure you’re aware of some of the regulatory changes that come with it.
Here are four issues we think are critical for businesses of all sizes and industries to be aware of.
Overtime threshold changes. As of Jan. 1, employers must now pay overtime for any employees earning less than $35,568 annually who work more than 12 hours in a day or more than 40 hours in a week, increasing from the previous level of $23,660 per year.
While employers had time to prepare for this federal increase, under a newly proposed Colorado rule, that threshold could then increase again to $42,500 on July 1 – and then by $3,000 each year until 2026, when it will be $57,500 a year. Our members have concerns with that level, which we shared with the Colorado Department of Labor and Employment. We urged them to delay the July increase; consider a more modest increase over time or tie it to economic indicators; and to consider rural Colorado and the economic diversity of our state. We’ll keep you updated on any changes.
Minimum wage increases for state and Denver workers. Jan. 1 also marked an increase in the minimum wage rate in Colorado and the City and County of Denver. State minimum wage increased from $11.10 to $12 and from $8.08 to $8.98 for tipped employees, as required in the state constitution. Meanwhile, minimum wage in Denver increased to $12.85 per hour.
New penalty for wage theft. The penalty for wage theft greater than $2,000 is now a felony as of Jan. 1. The amended law applies to employers who are subject to the federal Fair Labor Standards Act, as well as foreign labor contractors and migratory field labor contractors or crew leaders (excluding federal, state and local government entities). Also, an employee can now include someone who performs labor or services for the benefit of an employer.
Equal Pay for Equal Work Act goes into effect in 2021. Now is the time to start preparing your business for a number of changes outlined in 2019’s Senate Bill 85. The law forbids discrimination between genders based on pay; requires that companies post all job openings internally and list a salary range for the position; and forbids employers from asking about salary history.
Our investor and partner Employers Council has been tracking these and other regulation changes. Read the Employers Council blog post to learn about all the employment laws that are changing for 2020.
And, as the legislative session kicks off this week, we’ll be tracking more issues that can have an impact on your business. Don’t miss any of them by signing up for our policy alert.
Kelly Brough is the president and CEO of the Denver Metro Chamber.
