Is 32 hours considered full time in Colorado?

Many Colorado employers provide employee benefits, pay differentials, job assignments and other important benefits on the basis of whether an employee works full time or part time. This can lead to a lot of questions about what is full time under Colorado employment law. These questions typically do not exist when employees work a forty hour workweek but usually arise when employees work thirty-two hours or some other slightly lower number. For example, you might wonder is 32 hours considered full time in Colorado. The answer depends upon to what issue the full time status relates. Today’s post will explore some of the common issues in determining full time status under Colorado employment law.

Basic rule for full time status in Colorado

Colorado labor and employment law does not contain an expansive definition of full time or part time status for employees. In general an employee is full time or part time based upon an employer’s own definition. Full time versus part time is often a dividing line for benefits or certain positions but that line is typically not drawn out of a federal or Colorado employment law.

However, several employment law statutes set minimum or maximum limits for how much an employee may or must work to obtain a specific status under the law. Examples include:

  • Employees must work 1000 hours within a calendar year to obtain FMLA eligibility which might informally be considered a full time employee;
  • Minors generally have limited maximum hours of work within a workweek and cannot be required to miss school hours for work;
  • Employees working in certain transportation jobs may be limited by how many travel hours they may complete in a day or week;

We will talk about some common statutory minimum hours for full time status under federal and Colorado employment law in greater detail although it is important to note that the term “full time” is not common statutory or regulatory language in federal and Colorado law.

When a labor law or employment law does not set a minimum or maximum hourly requirement it is generally up to the employer or an agreement between employees and employer to determine when full time status kicks in for particular benefits, job assignments, compensation and so forth. Many Colorado employers consider full time a forty hour workweek schedule but some draw the line at a smaller number. Some employers set the line at thirty-five or thirty-two hours, particularly in industries like restaurants and retail where employees might work flexible schedules or less than a five day workweek.

The best way to assess whether you are a full time employee in Colorado at thirty-two hours is to focus on the specific subject in which the full time status applies. Review your employer’s documentation and legal resources to determine the answer as it applies to that subject. You might be full time for some subjects and not for others. Applying a single rule to every workplace issue might result in misinforming yourself. Operating on misinformed positions could put your job at risk. As always, if legal issues are involved in your question you should consult employment lawyers in Colorado as soon as possible.

Overtime pay in Colorado

Overtime pay is not exactly a full time versus part time issue but it definitely deals with the work hours for an employee. Federal and Colorado overtime laws calculate overtime pay for all hours in the workweek exceeding forty hours of work for all nonexempt employees. For this purpose an employee can be considered a full time employee at forty hours under the statute. An employee working overtime hours is more than full time. An employer could begin paying overtime pay at thirty-two hours if it wishes but that is an extremely uncommon practice.

Employee benefits and full time status

Most employees care about full time status because employers make benefit plans available to full time employees but may not extend them to part time employees. When we think about employee benefits from an employment law perspective we can think of them in two categories. The differences in categories is important to how and when an employer may make benefits available to employees based on work hours.

Regulated benefit plans under federal and Colorado employment law

First are employee benefit plans regulated by law. For private employers this typically falls under ERISA, the federal law regulating many types of employee benefit plans including:

  • 401k plans
  • Defined benefit pension plans
  • 403b plans
  • Health care plans (e.g. health insurance)
  • Cafeteria plans (e.g. reimbursement benefits)
  • Certain long and short term disability benefits
  • Some severance benefits

Employees of federal and Colorado government agencies often offer similar benefits operated under a plan regulated by state or federal laws as applicable. Although the complex regulatory apparatus behind ERISA does not apply to these plans they still generally follow similar regulatory mechanisms.

Benefits regulated by ERISA or other laws must operate as a plan with established rules. The applicable laws often set requirements for eligibility to the plan. Often employers may establish rules for eligibility based upon hours or length of service with the employer within the permitted confines of the law. Often employers can set eligibility on completion of a certain number of work hours in a year which effectively makes many part time employees ineligible for benefits.

A specific weekly hour threshold exists in the Affordable Care Act. Under the ACA employers must make available compliant health insurance to all employees who regularly work at least thirty hours in a work week. For the purposes of the ACA an employee is full time if the employee works thirty hours in a regular work week. Employers cannot set a higher limit for full time like thirty-two hours or forty hours.

Other benefits or fringe benefits

Employers may offer other benefits not regulated by ERISA or other laws. For these benefits an employer can generally set whatever constraints on eligibility it wishes. (Employers cannot use an unlawful motivation to extend benefits, such as unlawful forms of employment discrimination or in retaliation for complaining about a minimum wage violation.) These benefits include:

  • Paid time off (e.g. vacation pay, sick pay, personal days)
  • Company car
  • Most bonus programs
  • Training programs
  • Company sport programs
  • Free tickets to events
  • Raffles

Employers can set limits for work hours, length of service, job title and so forth to make these benefits available. If an employer sets a threshold for work hours as a full time employee for these benefits it may do so and even set different standards for each benefit. Often employers try to target a specific number for consistency, such as fort hours or thirty-two hours for full time employment across benefits; but an employer is free to have a more confusing policy.

Unemployment benefits in Colorado and employment status

Colorado unemployment benefits require that employees work for a given length of time and earn a minimum of $2500 during that period. It does not require an employee to work any specific number of hours in a workweek or for an employer to designate employees as full time employees. So long as an employee meets the length of service and wage minimums then the employee qualifies for a claim. (Assuming the employee otherwise qualifies.)

Some employers as a matter of course pay severance benefits to employees designated as full time employees. Here the issue may be complicated because a severance plan may fall under ERISA regulation but does not necessarily fall under ERISA regulation. The best way to begin answering that question is to review the severance information available from your employer which may include ERISA language.

Do Colorado employees get paid for snow days?

With winter weather in full swing employees in Denver and other parts of Colorado wake up to a lot of snow and ice days. Employers make decisions to open for limited hours or to close entirely for those days. For some workers that can mean an extra day off; but for other employees that can mean losing work hours and badly needed pay. That can leave many employees wondering if work is closed on a snow day, do I get paid? The answer is sometimes depending upon the worker’s status as an employee or independent contractor and exempt or non-exempt. Let’s explore this answer for Colorado workers.

Exempt employees vs. Nonexempt employees

Rules for payment of wages to employees differ depending upon whether an employee is appropriately classified as an exempt or nonexempt employee under the Fair Labor Standards Act and Colorado employment law. Under federal and Colorado wage law an exempt employee is exempt from overtime pay and minimum wage rules. Exempt employees are generally salaried employees who meet one or more statutory exemptions.

An employee is not exempt merely because he or she receives pay on a salary basis or because the employer says the employee is exempt. Most nonexempt employees receive hourly pay on the basis of hours worked in the workweek; but there are employees properly classified as nonexempt who receive a salary. Many employers misclassify nonexempt employees as exempt employees which often results in unpaid overtime pay and minimum wage violations. If you believe you may be misclassified then you should talk to a Colorado unpaid wages lawyer right away.

Snow day pay for nonexempt employees in Colorado

Nonexempt employees are not entitled to pay for hours the employer closes a work site under federal or Colorado employment law. Nevertheless, you may receive wages for an inclement weather day under an employer’s voluntary policy or under a contracted benefit such as:

  • An employer’s elective policy to pay wages for an inclement weather day;
  • The employer allows employees to elect to receive vacation pay or other PTO instead of taking the snow day unpaid;
  • A collective bargaining agreement between your union and employer includes required paid time for inclement weather days;
  • An individual employment contract includes provisions requiring the employer to pay wages for inclement weather days.

You should review the employer’s handbook or any employment contract for these provisions.

Snow day pay for exempt employees in Colorado

The rules for salaried exempt employees under the Fair Labor Standards Act and Colorado employment law are more complex. Employers must pay salaried exempt employees within specific rules to maintain the exemption from overtime pay and minimum wage. If an employer violates these rules then the exemption is destroyed and the employer must pay the employee at least minimum wage plus overtime pay for applicable hours. One of these rules applies to situations where an employer closes for a partial or full day due to weather.

Under the Fair Labor Standards Act an employer generally must pay a salaried exempt employee for an entire week of pay if the employee worked any part of the workweek. Under this rule the employee must be willing to work but is unable to work due to conditions not caused by the employee. This certainly includes days the employer shuts down work, such as snow days. It also includes days in which weather prevents you from getting to the office but the employer is open. (By contrast, an employer can make deductions for narrow reasons, such as the salaried, exempt employee’s FMLA leave.) Although employers cannot deduct salaried exempt employee’s pay for snow days it may deduct the time the employer closes from the employee’s PTO bank.

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Independent Contractors in Colorado and snow day pay

Independent contractors are not employees and therefore only receive pay under the conditions of their contracts. Often contractors only receive pay for days they work or generally for performing services; therefore, it is not common for contractors to receive pay for snow days. Independent contractors must review the terms of their contracts to determine whether the contract gives them snow day pay.

However, it is common for employers to misclassify employees as independent contractors to avoid employee rights laws and wage requirements. Misclassified employees may have remedies against their employer including overtime pay and FMLA rights. If you believe your employer misclassified you as an independent contractor then you should talk to a Colorado unpaid wages lawyer right away.

What is considered a living wage in Colorado?

Living wage has been a growing issue in labor politics and economic discussions in this country, particularly as unions and other worker groups began aggressively championing raising minimum wage over the past few years. Living wages are of concern here in Colorado as rent and home prices soared over the past decade. When living costs in Denver and other Colorado cities exceed local wages it prices workers out of their homes. Rising costs partially drove the push to increase Colorado minimum wage; however, minimum wage often fails to provide a living wage for Colorado workers. Today’s post will explore what is considered a living wage in Colorado and some of the legal concerns that arise in the debate.

What is a living wage?

A living wage is the hourly rate an individual must earn to support his or her family when that person is the sole provider and works full time. Living wage is not the same thing as minimum wage. Minimum wage is a minimum amount an employer may pay to an employee covered by the minimum wage law for work. Living wage considers the costs to that family to meet their minimum needs for self-sufficiency where the family lives. These costs change across regions rather than assume equal costs across the board. Note that a living wage is not a calculation of the wage necessary to live comfortably or move up the economic ladder.

Typically economists calculate living wages in light of the size of the family supported by the sole provider. For example, a Colorado employee without a significant other or children needs to earn far less than an employee supporting a family of four. This is for obvious reasons. Feeding four people costs more than one. Therefore, living wage varies not only by location but also by the size of the family supported.

Living wage in Denver, for example, requires a single employee to earn $12.95 which is above the current minimum wage. If that employee supports another adult and two children that number rises to $28.01, almost three times minimum wage. See your local living wage calculated using this calculator from MIT.

Colorado labor law final paycheck infographic

Colorado minimum wage vs. living wage

Minimum wage laws began as a way to end sweatshops and require employers to pay a living wage. Generally over time minimum wage laws in the United States failed to keep up with living wage requirements. Federal minimum wage set by the Fair Labor Standards Act is far below the living wage calculated in most parts of the country. Twenty-nine states have state minimum wages higher than federal law, including Colorado. Amendment 70 to the Colorado Constitution set minimum wage on a stair step to 2020 when increases tie to inflation.

Employees earning the Colorado minimum wage may still not reach a living wage. Considerations for calculating living wage include home prices, rent costs, utilities, food, transportation and healthcare. Although these are basic costs they do not include many expenses that Colorado employees may face. Nor do they include other financial considerations like retirement savings or entertainment.

Considerations for Colorado living wage

A living wage is not uniform across Colorado. Basic family expenses vary considerably across the state. For example, rent and home prices in Denver are far more expensive than most rural parts of Colorado. As expenses increase, so too does the living wage required to afford those expenses. Living wage is not always a linear increase with the urban density. For example, the Colorado Springs metro area requires only a slight decrease from the Denver metro area. Generally, however, urban areas are more expensive than rural areas in Colorado.

An important issue in Colorado is that living expenses are increasing at a rapid rate compared to wages. Studies of government data reflect living expenses increased three times as fast as wages. You can easily see how this happened with the explosion of both home and rent costs compared to even the increase in Colorado minimum wage. This is not a Denver problem. Growth in other large Colorado cities like Greeley, Loveland and Pueblo face the same struggles. Urbanization is not the only factor driving higher living costs. Many mountain communities have high living wages due to expensive housing costs, particular around tourist destinations.

A living wage in Colorado

Colorado employees must consider their location and how local cost variance affects their ability to support their families. The size of the family and location are key issues in self-sufficiency. An individual employee in Colorado needs to earn between $10.75 and $13 hourly just to sustain basic living costs. Note that even the lowest cost area of the state is above the Colorado minimum wage. For a family of four the living wage ranges from $24.00 to $29.00 far above the state minimum wage.

Unfortunately two income households do not fare better on minimum wage. In Denver a two income household with no children needs two earners making $10.55 hourly which is still above minimum wage. In lower cost areas a two income household with no children earn a living wage at minimum wage but fall below if they have a child.

This demonstrates how financially precarious life can be for many Colorado families. Lost wages or a lost job can send a family already struggling to meet their basic needs into complete financial collapse.

Legal issues and a living wage in Colorado

Families earning at or below a living wage in Colorado often work jobs at or near minimum wage. They may rely upon working multiple jobs (full or part time) and earning overtime pay. An employer refusing to pay wages earned by employees can have substantial effect on the employees and their families.

Employers who pay non-exempt employees below minimum wage steal from their workers and violate federal and state minimum wage laws. Employees in this situation have rights under federal and state law to recover unpaid wages through administrative or judicial means.

The same happens when employers fail to pay overtime pay owed to non-exempt employees. Employees earn overtime pay under federal and state wage laws. This is a higher rate of pay than minimum wage or the employee’s regular rate of pay. Employees can recover unpaid overtime pay through Colorado administrative procedures or in court.

Employers also sometimes fail to pay wages at all. Some ways employers fail to pay wages owed include:

  • Not issuing paychecks at all;
  • Failure to pay a final paycheck;
  • Shifting hours from one workweek to another to turn overtime hours into regular pay hours;
  • Removing hours from timesheets;
  • Requiring employees to work off the clock during lunches or before/after shifts;
  • Deducting hours or pay for impermissible deductions.

If your employer failed to pay some or all of your wages then you have rights to recover unpaid wages and other relief under federal and state wage laws. These laws may allow you to recover liquidated damages doubling the amount of unpaid wages, out of pocket losses caused by the failure to pay wages, attorney’s fees and court costs.

Additionally, your employer may not retaliate against you for complaining about or reporting unpaid wages. If your employer terminates you or takes other legal action for complaining about unpaid wages or reporting unpaid wages to a government agency then you have rights to recover for lost wages and other harm.

If you believe any of these unlawful acts occurred to you then you should talk to an unpaid wage lawyer in Colorado right away. An employment lawyer can advise you on your rights and how to proceed to receive the wages you earned. Speak to an unpaid wage lawyer as soon as possible. Many wage claims have short periods that require you to act to preserve your claim. The longer you wait to talk to a lawyer the more you risk not receiving the wages you earned.

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Are paid 15 minute breaks required by law under Colorado labor law?

Colorado employees seek out the answer to this question with high frequency for good reason. Colorado is one of the states that has a labor and employment law that requires many employees to receive a paid break at work and gives employees legal remedies when employers refuse to provide legally required paid breaks. In this post we will discuss some of the legal issues around Colorado’s paid break law and when you might need to talk to an employment lawyer in Colorado if you do not receive paid breaks required by law. Before getting into those details, let’s get to a brief answer under Colorado law about paid 15 minute breaks. Under Colorado law, nonexempt employees are entitled to paid 10 minute breaks every four hours of work but not entitled to 15 minute paid breaks. Employee break laws involve both federal and state law so let’s take a look at how each affects employee rights to unpaid and paid breaks.

Federal law on paid breaks for employees

Federal law does not require paid breaks for employees but establishes minimum standards for whether breaks are paid or unpaid when they occur. The federal employment law that applies to most employees on the subject of breaks is the Fair Labor Standards Act. FLSA sets minimum wage conditions for covered, nonexempt employees in all states. Under the Fair Labor Standards Act, employees are not generally entitled to break periods at all. If, however, an employee receives a break period of less than twenty minutes then the employee must be paid for that break time. 

An important caveat under the FLSA applies to mothers who need break time to express milk. The PPACA created a specific break rule in this situation. The PPACA amended the FLSA under 29 U.S.C. section 207(r)(1) to require reasonable break time for mothers to express milk. This rule applies if:

  • The mother gave birth within the past year;
  • Is covered by the overtime protections of the FLSA;
  • The employer employees 50 or more employees; and
  • The employer cannot claim undue hardship to provide the required break time.

Under the FLSA amendment the break period for expressing milk does not have to be paid; however, if the employer provides breaks under twenty minutes and that break time is used for expressing milk then it must be paid like any other paid break under FLSA.

Federal law provides for a wide range of unpaid break or rest periods to employees under different circumstances. These include:

  • Family and Medical Leave Act (FMLA) covered leave;
  • Leave as an accommodation for a disability;
  • Required rest for transportation workers; and
  • Pregnancy leave under the Pregnancy Discrimination Act.

The FLSA does not require employers to provide unpaid rest periods for lunches but if an employer provides a rest period greater than twenty minutes then it is not required to pay for that time so long as the employee is truly relieved of all work on behalf of the employer.

Colorado labor and employment laws on paid breaks

Colorado law specifically requires paid and unpaid break periods for employees covered by the state wage law. Colorado has other state laws that require unpaid break periods for particular purposes like family leave or as an accommodation for a disability; but let’s focus on how Colorado law expands on the FLSA for both paid and unpaid break periods under the normal work day.

Like federal law, Colorado labor laws protect break periods for employees covered by the state wage law. If you are exempt from this law then state law does not require employers to provide typical break or lunch periods. Most employees are covered by Colorado wage law under the Colorado Wage Act, found in Title 8 of the Colorado Revised Statutes.

The rules for typical breaks under Colorado law arise under Colorado Minimum Wage Order 34 and require:

  • A paid 10 minute break in the middle of each four hour work period as practical as possible to place the break in the middle of the four hour work period;
  • An unpaid 30 minute break or lunch when the work schedule exceeds five consecutive hours, if practical;
    • If not practical then the employer must allow the employee an opportunity to each a meal of choice on the clock whether provided by the employer or employee.

An employer can require the employee to stay on work premises during the paid ten minute break but not during the longer unpaid lunch period.

Colorado employment law

Putting federal and Colorado paid break laws together

Note that the Colorado Wage Act and the current Minimum Wage Order do not require paid 15 minute break periods although fifteen minutes is the standard break period for many employers. If an employer provides a fifteen minute break period then it must be paid for covered employees under the FLSA; but the employer only has to provide a ten minute period for covered employees under the Colorado Wage Act. Putting the two together for an employee covered by both federal and state minimum wage laws:

  • The employer must provide a paid 10 minute break every four hours;
  • The employer may extend the break period to 15 minutes;
  • If the employer extends the break period to 15 minutes then it must be a paid 15 minute break.

If you work under an individual employment contract or a collective bargaining agreement, the contract or agreement may provide additional requirements for rest periods.

Remedies against a Colorado employer for violating paid break requirements

Although federal and Colorado wage laws overlap and work together to establish minimum paid break rules, the remedies under each law are unique to the requirements of the respective law.

Federal law

Federal law only requires employers to pay for breaks of twenty minutes or less so when employees take these breaks they must count as compensable time in the day worked. The employee’s break time must count within the work hours and receive minimum wage and overtime pay for all compensable work time within the work week. An employer who fails to count compensable breaks within the workweek is liable for unpaid minimum wage and overtime pay (as appropriate).

Colorado law

Colorado law is more expansive in its protections because breaks are required for nonexempt employees. If the employee receives the required ten minute breaks but the employer does not include the breaks within compensable time then the employer is liable to the employee for unpaid wages and overtime pay (as appropriate) for the ten minute breaks. Here, federal and Colorado law is similar.

However, if the employee does not receive the breaks then the employee can pursue the employer for claims related to this violation of the Minimum Wage Order. Employees may not have tremendous claims if the employer only does not provide the required paid ten minute breaks but an employee could nevertheless pursue a claim for the violation. If the employer takes disciplinary action against an employee who demands due paid breaks then the employee may have a stronger claim against the employer for the effects of the disciplinary action. Employees have successfully sued for wrongful discharge in violation of public policy when employers terminate employees in retaliation for demanding the legally required break periods.

Talk to an employment lawyer in Colorado about your employee break rights

If you believe you are not receiving required break periods or not being properly paid for your breaks then you should talk to a Denver employment lawyer right away. Wage-based claims carry a statute of limitations period that applies to each pay period so delay working on your potential claims may limit your right to recover due wages. An employment lawyer can help assess your situation and whether you have claims to pursue against your employer. Recall that some employees are exempt from the break rules under federal and Colorado law. Demanding breaks not required by law or by an employment contract could result in losing your job with recourse. An employment lawyer can help assess whether you are entitled to breaks and what next steps may be available to you.

Salary history not a defense to sex discrimination under Equal Pay Act according to the Ninth Circuit

The Equal Pay Act is a federal law that prohibits pay discrimination on the basis of sex. Unlike Title VII and state anti-discrimination laws that prohibit sex discrimination in the workplace, the EPA only applies to compensation disparity between the sexes. The federal Ninth Circuit issued its decision in a case involving the Equal Pay Act surrounding the use of salary history as a deciding factor in salary and wage rates. The Ninth Circuit ruled in Rizo v. Yovino that the use of salary history does not justify pay disparity between men and women, overturning its own precedent. This broad rule has employer-side employment lawyers around the country in a tizzy.

The details on Rizo v. Yovino

We won’t spend too much time on the facts in this case because the Ninth Circuit staked out a position far beyond the facts of the case but it helps to understand a little about how they got here. Rizo is a teacher hired as a math consultant with the Fresno School District. The school district sets pay on a salary system that sets a consultant’s starting salary as the consultant’s prior salary plus five percent. (Then the salary steps up at set intervals.) Rizo, a woman, discovered the male consultants had higher starting salaries. The school district uniformly applied its salary system so the difference in pay between men and women all arose from the use of past salary as a starting point on the salary track. Rizo sued, alleging the pay disparity violated the Equal Pay Act.

Equal Pay Act and pay disparity

The Equal Pay Act was enacted in 1963 as an amendment to the Fair Labor Standards Act to prohibit wage disparity between men and women. The statute requires employers to pay men and women equal pay for work of the same skill, effort, responsibility and work conditions unless one of four exceptions apply. The Equal Pay Act exceptions allowing wage disparity are:

  1. A seniority system;
  2. A merit system;
  3. A system which measures earnings by quantity or quality of production; or
  4. A differential based on any other factor than sex.

The last exception is a catchall exception that allows for any other nondiscriminatory pay system. The Fresno School District argued, as many employer-side employment lawyers do in blogs discussing this case, that the exception applies because the system does not use sex as a factor.

Not so fast, said the Ninth Circuit.

The Ninth Circuit’s new rule on the Equal Pay Act

The Ninth Circuit looked at the statutory language and the legislative history behind the Equal Pay Act, deciding that if the purpose of the statute is to close the wage gap between men and women then it hardly makes sense to allow one employer to perpetuate a prior employer’s wage differential. The majority explained:

In light of the clear intent and purpose of the Equal Pay Act, it is … clear that we cannot construe the catchall exception as justifying setting employees’ starting salaries on the basis of their prior pay. At the time of the passage of the Act, an employee’s prior pay would have reflected a discriminatory marketplace that valued the equal work of one sex over the other. Congress simply could not have intended to allow employers to rely on these discriminatory wages as a justification for continuing to perpetuate wage differentials.

The majority continued to clarify that the catchall exception, as many circuits agree, requires the nondiscriminatory factors to be job-related (not just business-related). It held that prior salary is not within the catchall because it does not act as a reasonable proxy of an applicant’s or employee’s skills or expertise. The majority continues:

Prior salary does not fit within the catchall exception because it is not a legitimate measure of work experience, ability, performance, or any other job-related quality. It may bear a rough relationship to legitimate factors other than sex, such as training, education, ability, or experience, but the relationship is attenuated. More important, it may well operate to perpetuate the wage disparities prohibited under the Act. Rather than use a second-rate surrogate that likely masks continuing inequities, the employer must instead point directly to the underlying factors for which prior salary is a rough proxy, at best, if it is to prove its wage differential is justified under the catchall exception.

The Ninth Circuit therefore established a rule that prior salary is almost never an acceptable factor to establish a wage differential between the sexes.

[W]e now hold that prior salary alone or in combination with other factors cannot justify a wage differential. To hold otherwise—to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum—would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.

The court left the door cracked for some situations in which prior salary might be an appropriate factor but did not specify in great detail what they are.

Bottom line: As far as the Ninth Circuit is concerned employers should not establish policies that rely on past salary as a factor to set initial wages or salary.

The impact?

Employer-side employment lawyers dumped an avalanche of blog posts last week bemoaning the outcome of this case. (You can read some here, here, here, here, here and here.) The Ninth Circuit’s holding is definitely broad as all of these lawyers complain but breadth by itself is not a reason why the holding is wrong. Prior salary has nothing to do with an employee’s qualifications to perform a given job. Whether an applicant was paid more than another could be a reflection of performance but the employer has no way to confirm the extent performance affected pay rate over other factors such as cost of living differentials, a seniority system, labor market conditions, or sex discrimination. An employer who adopts an applicant’s prior salary implicitly adopts all of the reasons–good or bad–for the wage disparity.

I suspect this broad interpretation will make its way to the Supreme Court because it disagrees with several circuits and even the EEOC. Given the conservative majority on SCOTUS I find it improbable that the majority will rule against giving employers the opportunity to make business-friendly salary decisions. For now, at least, employers within the Ninth Circuit should talk to their employment lawyers about their employment policies under this decision.

The decision in Rizo is part of a set of cases brought across several federal circuits over the catchall exception. Circuits around the country have taken a less than liberal position towards employers but, unsurprisingly, the Ninth Circuit provides employees the greatest help. Ultimately I expect the Supreme Court will adopt a position closer to the Tenth and Eleventh Circuits that allow employers to consider past salary as a factor but not as a sole factor justifying a wage differential.

How this affects Colorado employees

Like other appellate decisions discussed here outside of the Tenth Circuit this case has no direct impact on our employees. Nevertheless, the way the Supreme Court handles the rule set out in this case could change Equal Pay Act analysis in this circuit and require employers to make changes to policies. Enterprising employment lawyers might take up similar cases and see if the Tenth Circuit in Denver wants to agree with its colleagues in San Francisco but it’s highly unlikely.

Here the Tenth Circuit rule is that prior salary cannot by itself justify a wage disparity but prior salary can be a factor in setting wage and salary for employees. The court here sets a high burden on the employer to prove it meets the catchall exception. Its summary judgment standard for employers requires the employer to prove the prior salary policy not only could justify the wage disparity but that it does justify it. If the Supreme Court hears an Equal Pay Act case on prior salary it may rule otherwise; but for now employees have some protection from sex discrimination passing from one employer to the next in Colorado.

As always, if you believe your Colorado employer discriminates in pay on the basis of sex then you should talk to an employment lawyer right away. Delaying talking to an employment lawyer can result in losing opportunities to recover for discriminatory pay systems because each paycheck carries its own statute of limitations.