Colorado Pay Transparency Law: What Employers Need to Know
The most aggressive pay disclosure law in the U.S. is forcing organizations to re-evaluate how—and where—they hire.
Pay transparency law reshapes job postings
Effective January 1, 2021, Colorado enacted the Equal Pay for Equal Work Act, requiring employers to disclose compensation ranges and benefits for all job postings that could be performed in Colorado—even remote roles. This new pay transparency law is the most aggressive of its kind in the U.S., reshaping job posting strategies nationwide.
If your company has even one employee in Colorado, you’re now subject to these disclosure rules. Employers must list:
-
Salary range: A good-faith range the company is willing to pay
-
Additional compensation: Any bonuses, commissions, or incentives
-
Benefits: A general description of health care, retirement, PTO, and any other tax-reportable benefits
This requirement doesn’t just apply to in-state offices. If a remote job could be filled by a Colorado resident, these disclosures are mandatory.
Why Colorado’s pay transparency law matters for HR leaders
Colorado’s law presents both compliance and strategic challenges:
-
Remote reach: The remote work boom means most companies must evaluate whether job ads are technically “Colorado-eligible.”
-
Privacy concerns: Requiring salary transparency in postings removes discretion HR departments have traditionally used to manage internal equity, negotiation, and competitive positioning.
-
Recruiting implications: Disclosing salary ranges can dissuade candidates or lead to internal comparisons that create dissatisfaction—especially if nuances like geography, performance, or tenure aren’t clearly communicated.
While the law aims to support equal pay, it may inadvertently cause issues. For example, surveys from Payscale and SHRM show that employees often misunderstand legitimate pay variances, especially when full context is missing.
How some companies are reacting
Several companies have opted to exclude Colorado residents from remote job listings altogether. Public examples include:
-
Johnson & Johnson
-
DigitalOcean
-
Drizly
This “Colorado exclusion” tactic is controversial. While it may reduce compliance risk, it also narrows the talent pool and may affect employer brand perception.
Instead of exclusion, some businesses are investing in compensation strategy updates and tools like SimplyMerit to streamline transparency, fairness, and equity across their workforce.
Action framework: HR response checklist
HR leaders should assess their exposure and implement the following:
-
Audit existing job postings: Identify any that may be accessible to Colorado residents.
-
Update job templates: Build in fields for salary ranges and benefits summaries.
-
Educate hiring managers: Ensure they understand the law and how to communicate pay ranges.
-
Review pay bands: Confirm they are defensible, consistent, and aligned with your compensation philosophy.
-
Consult legal counsel: Especially for multi-state or remote-first organizations.
If in doubt, comply by default. The penalties—and reputational risks—can outweigh short-term friction.