Coloradans Need Not Apply
A law seeking to help the state's workers seems to be having the opposite effect.
Axios has “re-reported” and thus drawn my attention to a WSJ report that a wave of companies are advertising for open positions but actively discouraging people from Colorado from applying. While my first thought was the state’s liberal marijuana laws, the actuality is more sinister.
At issue is a new Colorado law that requires companies with even a few employees in the state to disclose the expected salary or pay range for each open role they advertise, including remote positions. The rule’s aim is to narrow gender wage gaps and provide greater pay transparency for employees. To avoid having to disclose that information, though, some employers seeking remote workers nationwide are saying that those living in Colorado need not apply.
After listing several job announcements doing just that, they go on to explain:
Businesses have argued, in part, that Colorado’s rules are overly burdensome administratively for employers. The Rocky Mountain Association of Recruiters, a trade group, sought an injunction against the pay transparency rules earlier this year. Last month, a federal judge denied that request, allowing the rules to stand.
While I’m open to persuasion, given by lack of experience running a major business, I’m highly skeptical that having to disclose how much a job pays is “burdensome administratively.” Certainly, the federal government manages to do so. But I’m also skeptical that Colorado has a right to legislate the behavior of companies not located in Colorado, even if people from Colorado wind up applying for the job. More on that later.
While labor and legal experts say there is nothing technically stopping Coloradans from still applying and being eligible for such jobs, the disclaimers are likely to discourage people wanting to work remotely from the state from pursuing such opportunities.
“You can’t stop the internet essentially at a state line. Anyone can apply for anything,” said Laura A. Mitchell, a Denver based principal at the law firm Jackson Lewis P.C. “The question comes down to whether or not an employer would actually consider that candidate for the role.”
I would imagine the companies in question would be happy to have and consider applicants from Colorado and are simply hoping that the language keeps them out of the law’s purview.
The job-posting language is also drawing scrutiny from Colorado officials. The state’s Department of Labor and Employment recently opened an investigation into a complaint about at least one company’s remote job posting excluding Colorado residents, said Scott Moss, director of the department’s division of labor standards and statistics, who declined to name the company or who filed the complaint.
I am far from an expert on labor law but would be surprised, indeed, if it were legal for a company to openly refuse to hire Coloradans. Granting that state residency isn’t a protected class under federal law, it certainly violates the spirit of the Commerce Clause.
A number of states, including California, have enacted legislation in recent years that ban employers from asking for an applicant’s salary history or added requirements for employers to disclose pay ranges upon request. One difference in Colorado’s Equal Pay for Equal Work Act—which went into effect in January—is its provision that employers publicly disclose compensation and benefits for each job posting in the state.
Okay . . . so that may indeed be burdensome. I absolutely support greater salary transparency as a public policy goal but it seems unreasonable to require the disclosure of that much information in every job announcement. But I’m only going by what’s in the news report and there may be cheap, easy ways (such as posting on the company website) for companies to meet the burden. And, indeed, that seems to be the case.
In the remote-work era where jobs can conceivably be done anywhere, that has led to some confusion, state officials say. Colorado has told employers they don’t need to disclose compensation for roles to be performed entirely outside of the state. Nor do the pay-disclosure requirements apply to remote jobs posted by a company that doesn’t have any Colorado employees. But if an employer does have a presence in Colorado, it would need to post salary information—even for a remote job—Mr. Moss said.
Again, it strikes me as unreasonable for states to be able to impose restrictions on companies who don’t have facilities in the state if they’re merely doing business there via mail-order/online retail or the like. And, certainly, having remote workers who happen to live in the state seems inadequate.
Many companies now do include pay information specific to Colorado on remote job postings. A listing for a software development engineer on a “work-from-anywhere” team at Amazon.com Inc., for instance, notes that the range for the position in Colorado is $116,400 to $160,000 a year, but overall compensation could vary. Amazon’s listing cites Colorado’s Equal Pay for Equal Work Act as its reason for including the compensation information.
Again, I only know what’s in the report here but if including a very large salary range and huge caveat meets the intent of the law, it’s not obvious that it’s 1) particularly burdensome for employers or 2) all that helpful for would-be workers.
Well, on the one hand, it’s hard to imagine it being ok to exclude Coloradans. And it also doesn’t seem right for one state’s standards to set the bar for employers in every state, just because the Internet exists.
Are any of the companies involved significant ones? Because as far as I’m concerned, any of these companies that refuse to hire in Colorado is a big red flag that you don’t want to work for that company no matter where you’re from.
Well, there seems to be not quite enough information to have a non-knee-jerking opinion.
As I do, on a multinational level, one could say it rather depends on the terms and the potential conflict of legal obligations as well as potential complexity (possilby not additional however) in tracking the legal (tax one presumes) residency of an employee which depending on specifics of tax law of a jurisdiction is not necessarily the same as what company has on ordinary record. Depending on specific reporting obligations already existing.
While it all seems rather simple to the commentariat who have no obligations and love to take grand moral stances, for a business one would be rather concerned about administrative and overhead burden in understanding and tracking a legal obligation. Potential unknown legal risk arising from conflict of privacy versus disclosure laws, which even if not generating direct liability certainly generates potential legal costs and compliance costs…
If the law is poorly written or for specific sectors has potential conflict with other obligations, entirely rational to eliminate an unknown risk by simply not hiring.
Insofar as USA has the well-deserved reputation for being the land of interminable litigation, it generates risk aversion in this area.
Central governments with rigid payscales do indeed provide a certain salary transparency, of course at the well known price of inflexibility – and a mechanical, punching-the-clock approach- and as well off-loading incentive compensation into non-salary perks and the like.
Some private sector entities do have pay scales ressembling the bureaucratic government approach of course.
Coloradans Need Need Apply, huh?
“Coloradans Need Need Apply.” Should that be “Coloradans Need Not Apply”?
When I worked for MegaCorporation, Inc, I was a manager in California. The state required me to take specific training as a manager of people in that state, a requirement my company had to comply with in order to employ people in California.
I’m not seeing how this is different. In order to do business within a state – including employing citizens of that state, one must comply with the labor laws of the state.
On topic 2, having a sense of a salary band–even one that wide–is very helpful for workers.
The reality is, at least in tech, one’s biggest pay jumps come when changing employers (and rarely through internal promotion). That is a system that benefits folks with negotiating skills.
And there is significant evidence that, due in part to the externally created phenomena of “imposter syndrome”, the ability to confidently negotiate isn’t trained equally (with women and folks from under-represented groups typically suffering the most). And the long term income loss of switching jobs and always starting at the low end of a pay band over a career can be huge. This is one of the reasons why banning the asking of one’s previous salary is really useful (which matches what you will learn in a negotiation class–you never anchor a negotiation on the low end).
The challenge is that depending on the organization, what’s expected of a “software engineer” and their level of compensation can vary pretty widely. So having transparent pay bands is an important move towards leveling the negotiation field.
What will need to be watched is, if remote working trends continue, how major orgs will deal with the issue of cost-of-living. It is entirely possible that will cause pay bands to grow. Or they may have to begin releasing regional or state-by-state pay bands.
@Tony W:
Sure, which is why these companies are actively discouraging Colorado applicants – they don’t want to deal with a law they don’t care for.
They could have been a little less public about that discouragement and just have directed managers not to hire residents of Colorado (which is entirely legal IMO). Geography isn’t remotely a protected class.
@HarvardLaw92:
The way I’m reading it, that wouldn’t work. The company has to disclose the salary & benefits in the job posting. Which means if someone from Colorado wants to apply, the info has to be in the ad.
Or am I misreading the requirement?
@Mu Yixiao:
I have my doubts that any court is going to uphold a requirement that a company comply with state level labor law with respect to recruitments which are not germane to / external to that state, or indeed employees not located within the geographical boundaries of the state.
If I post an announcement that explicitly excludes Coloradans from eligibility, which technically speaking I’m perfectly within my legal rights to do, then the state no longer has a locus from which to assert authority. The limits of its labor jurisdiction extend no further than employees and facilities physically located within the state.Taking the reading of the CO statute as presented implies that the State of Colorado, for example, somehow has a basis for exercising extraterritorial jurisdiction with regard to an advertisement I might make for a position geographically located in Wisconsin simply because I have one employee located in Denver. It’s gross overreach that’s just waiting IMO for a test case to eviscerate it.
Colorado-Americans are the new Irish-Americans.
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