The Colorado Wage Transparency Act was created to prohibit employers from taking adverse actions against employees who discuss their wages with other employees or individuals outside of the business. The reasoning behind the Colorado Wage Transparency Act is that many employers have policies that prohibit employees from disclosing salary information to their co-workers. These policies are problematic under both Federal and state laws.
What Set the Stage for the Colorado Wage Transparency Act?
Under the National Labor Relations Act (“NLRA”), private sector employees have the right to participate in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” This has been interpreted to give employees the right to have conversations about the terms and conditions of their employment, including salary. Thus, the National Labor Relations Board, which is responsible for enforcing the NLRA, has sued private employers for firing non-supervisory employees for discussing wages with other employees.
In 2014, President Barack Obama signed an Executive Order providing that Federal contractors “will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant to another employee or applicant.”
Colorado and several other states have also enacted laws to promote pay transparency by prohibiting policies against pay disclosure. In 2008, Colorado enacted the Wage Transparency Act, which provides:
24-34-402.Discriminatory or unfair employment practices.
Specifics about the Colorado Wage Transparency Act
(1) It shall be a discriminatory or unfair employment practice:
(i) UNLESS OTHERWISE PERMITTED BY FEDERAL LAW, FOR AN EMPLOYER TO DISCHARGE, DISCIPLINE, DISCRIMINATE AGAINST, COERCE, INTIMIDATE, THREATEN, OR INTERFERE WITH ANY EMPLOYEE OR OTHER PERSON BECAUSE THE EMPLOYEE INQUIRED ABOUT, DISCLOSED, COMPARED, OR OTHERWISE DISCUSSED THE EMPLOYEE’S WAGES; TO REQUIRE AS A CONDITION OF EMPLOYMENT NONDISCLOSURE BY AN EMPLOYEE OF HIS OR HER WAGES; OR TO REQUIRE AN EMPLOYEE TO SIGN A WAIVER OR OTHER DOCUMENT THAT PURPORTS TO DENY AN EMPLOYEE THE RIGHT TO DISCLOSE HIS OR HER WAGE INFORMATION. THIS PARAGRAPH (i) SHALL NOT APPLY TO EMPLOYERS WHO ARE EXEMPT FROM THE PROVISIONS OF THE ‘NATIONAL LABOR RELATIONS ACT,’ 29 U.S.C. SEC. 151 ET SEQ.
While many employers think that they may prohibit employees from discussing wage or salary issues, these policies may be unlawful and any adverse employment actions arising from the enforcement of such policies may be actionable. Employers are advised to proceed with caution and consult with legal counsel before taking action against any employee for disclosing or inquiring about pay information in the workplace.