The relationship between employers and employees in Colorado faces a potentially seismic shift in the next year, if a long list of priority bills for the Legislature’s new Democrat majority pass in their present form. The issues the Legislature is tackling – like pay equity and paid family and medical leave – are important ones that have broad political support. But how the bills are written will determine how easy or hard it will be for JeffCo businesses to comply with the new mandates.
The JCBL has been working with a broad coalition of other business groups to offer amendments to reduce the compliance expense and new liability that will come with the likely passage of new laws. Take, for example, the Equal Pay for Equal Work Act (SB19-085). The JCBL opposes discrimination in pay based on sex or any other non-work-related factor. We believe our members are paying their employees fairly and, if they are not, they should.
However, as introduced, SB85 was unworkable for businesses. The bill creates a new right for employees to sue their employer in court for a discriminatory pay disparity. As under federal law, the burden of proof is on the employer to show that any pay disparity is based on a legitimate business-related factor, but the available defenses in the state bill were insufficient. For example, a night shift employee could not be paid more than a day shift employee. Nor could an employee with more experience, education or training expect a higher wage. An employer would have had to pay the same salary in La Junta as it does in Jefferson County. The damage awards were greater under the original version of the bill than in any other state around the country.
Working with the sponsors of the bill, however, the business coalition was able to secure a number of amendments to the bill to address all of those concerns listed above and more. While we still have a couple issues to negotiate, we are hopeful to address the major business concerns as the bill moves through the Legislature. But even with those changes to the bill, this likely new law will require businesses to change the way they post new jobs, pay their employees and handle opportunities for promotion.
Meanwhile, the long-awaited Family and Medical Leave Insurance Program Act (FAMLI) was just introduced. SB19-188 imposes a tax on all employers and employees in the state to create a fund from which employees can file for wage replacement while taking leave from work for their own medical needs, the care of a new child, or to care for a sick relative or friend. The program is modeled after the federal unpaid Family and Medical Leave Act (FMLA), with which most employers are familiar. Like FMLA, employers are required to reinstate an employee taking leave to the same or equivalent job upon return from leave. But unlike the federal FMLA, the state FAMLI program will cover all employers, including small employers, who are exempt under the federal law. Colorado’s proposed bill goes beyond the FMLA on the reasons for taking leave, the duration of leave, and the definition of family member; and is more generous to the employee in time-on-the-job requirements for eligibility and job protection.
In fact, SB188 represents the most generous paid leave program passed by any state in the nation. The tax imposed on employers and employees to fund the program is uncapped and to be set annually by the director of the program without review or approval by committee, Legislature or voters. Putting aside the administrative burdens and business disruptions inherent in any mandated paid leave program, the risks of another large insolvent state fund is a very real concern.