Colorado Pay Transparency. Single-State Compliance.
Summit Mountain Co-op. Denver. Monday, 8:47 AM MT.
An interactive scenario about a CDLE notice over missing posting ranges, a Director role filled without the unique Colorado promotional opportunity notice, and the Equal Pay for Equal Work Act's quiet rule that "market rate" is not a defence.
One state. Four overlapping rules. One day to make three decisions.
VP of People at Summit Mountain Co-op. A 480-person outdoor retail co-op headquartered in Denver. Every employee is in Colorado.
Your pay bands have not been updated in 18 months. This morning, the Colorado Department of Labor & Employment opened a compliance review of your latest annual pay data report. Within the hour, a senior engineer will email you invoking SB 23-105.
This is a decision-driven scenario. You will face three real decisions that a VP of People encounters when Colorado's Department of Labor & Employment comes knocking, and your choices shape how the story unfolds.
The 4 Stakeholder Bars (top right)
Each bar starts at 50%. Your decisions shift them. There’s no perfect answer. only trade-offs.
Colorado Stack
Colorado has the strictest pay transparency framework in the country. SB 23-105, the Equal Pay Act, the Promotional Opportunity Notice, and the salary-history ban work together. Your decisions must account for all four.
Legal References
Law references appear throughout. Click them to read the relevant statute.
SB 23-105. Compensation Range in Postings.
Every posting must include the pay (or range) AND a description of benefits. Applies to roles performable in Colorado, including remote-eligible. No employee threshold. Penalties: $500 to $10,000 per posting, per violation.
C.R.S. 8-5-203. Promotional Opportunity Notice.
Unique to Colorado. As amended by SB 23-105, employers must make reasonable efforts to give notice of job opportunities that current employees can apply for, with compensation range and how to apply, AND give post-selection notice of the candidate selected. Filling a role internally without announcing the opportunity is a separate violation.
C.R.S. 8-5-102. Equal Pay for Equal Work.
Standard is substantially similar work (skill, effort, responsibility). "Market rate" is not a defence. Permissible: seniority, merit, production-based earnings, geography, education/training, travel. Negotiation outcome and prior salary do not qualify.
C.R.S. 8-2-122. Salary History Ban.
Cannot ask for, rely on, or use a candidate's prior salary. Even if volunteered. Cuts inherited gender bias at the point of hire.
You're halfway through your first coffee when Legal forwards you an email marked URGENT. RESPONSE REQUIRED.
"Dear Mr. Vega, our review confirms at least fourteen (14) current listings lack the compensation range and benefits description required by SB 23-105 and C.R.S. 8-5-201."
"Separately, a Director of Operations role was filled internally on March 1, 2026 without notice to other employees as required by C.R.S. 8-5-203 (Promotional Opportunity Notice). We are opening a parallel inquiry."
"Penalties under SB 23-105 run $500 to $10,000 per violation, with each posting and each Notice failure a separate violation. Respond in ten (10) business days with (1) remediation plan and (2) documentation of the Promotional Opportunity Notice process for the Director fill."
"Sincerely, Investigator T. Kowalski, CDLE Division of Labor Standards & Statistics"
Before you can finish reading, Jordan Reeves, Head of Recruiting, calls from down the hall.
"Marcus, I just saw the CDLE letter. Fourteen postings. I counted them. They're right. None of them have a pay scale."
You "How did fourteen postings go live without ranges?"
Jordan "Because nobody built a check into the ATS. The template defaults to 'competitive compensation.' Most hiring managers don't override it."
You "And our pay bands? They're 18 months old."
Jordan "Worse. Our L5 engineering band on file says $95K to $125K. We hired three people last quarter at $130K to $142K because the market moved. The posted range, if we put one up, doesn't match what we've actually been paying."
You "So if we publish the band on the postings, we're publishing a number that contradicts our offer letters."
Jordan "And the CDLE letter mentions the Director of Operations fill. The CDLE wants documentation of the Promotional Opportunity Notice for that role. There wasn't one. We never announced the opening to staff, and we never sent the post-selection notice of who got it. That's two misses under 8-5-203. We have ten business days. What do we tell them?"
Fourteen non-compliant postings under SB 23-105, plus a parallel inquiry into a Director-level fill that bypassed the C.R.S. 8-5-203 Promotional Opportunity Notice. Each day a non-compliant posting stays live is a continuing violation.
Ten business days to respond. Your pay bands are 18 months stale.
How do you respond?
"Update every pay band to current market, compliant pay scales on every active posting within 48 hours. Then respond to the CDLE with a corrective action plan AND a privileged pay equity audit run through outside counsel."
Jordan "The audit will show six current employees below the new minimum of their own band. And probably the Promotional Opportunity Notice failure."
You "We find it before the CDLE does. Privileged audit, then remediation."
By Friday the updated postings are live. Senior Deputy Director Alvarez's office acknowledges receipt and notes the voluntary audit will be weighed in mitigation.
SB 23-105 penalties are per-employee, per-posting; proactive remediation is a mitigating factor. A privileged audit run through outside counsel surfaces C.R.S. 8-5-102 exposure before a plaintiff's attorney does, while attorney-client privilege protects the working papers from civil discovery.
"Fix the 14 postings. Respond to the CDLE addressing exactly the posting violation. The pay gap finding is a separate matter we'll evaluate internally."
Jordan "What if the CDLE asks for the bona fide factor documentation? They specifically requested it in the letter."
You "We send what we have. We don't manufacture documentation we don't have."
Your response addresses the 14 postings. Senior Deputy Director Alvarez's office writes back: "Your response is silent on the C.R.S. 8-5-102 wage-disparity finding and on the bona fide factor documentation requested in our original correspondence. Please advise within ten days whether Summit Mountain Co-op intends to provide this documentation, or whether we should proceed under our independent investigative authority."
Responding only to what was asked is technically permissible. But the CDLE asked for two things: the posting remediation AND bona fide factor documentation under C.R.S. 8-5-102. Answering only the easy half signals to the regulator that the harder half is the part you cannot defend. The follow-up letter is worse than the original because now you have demonstrated awareness of the gap without willingness to address it.
"Outside counsel asks for a 30-day extension. We need time before committing to a plan."
Jordan "And the 14 postings live right now without a pay scale?"
You "They stay up. I don't want to post ranges we'll have to change in two weeks."
Senior Deputy Director Alvarez's office denies the extension: "Each day a non-compliant posting remains active is a continuing violation under SB 23-105. We are escalating Summit Mountain Co-op's file to the formal investigative track."
A candidate screenshots a still-live posting. LinkedIn: "Summit Mountain Co-op under CDLE investigation. Postings are STILL up." 800 likes. By midday, three class-action firms are advertising to Summit Mountain Co-op's Denver employees.
SB 23-105 treats each day a non-compliant posting stays live as a continuing violation. Requesting an extension while postings remain up does not pause the clock. It runs it. The CDLE can also escalate to formal investigation under C.R.S. 8-5-301, at which point the timeline is no longer yours.
You've responded to the CDLE, or at least started to. While you were drafting, this landed in your inbox from Lauren Mitchell, Senior Engineer.
"Hi Marcus, Under Colorado SB 23-105, I'm formally requesting the pay scale for my current position (Senior Software Engineer, L5). I understand the company is required to provide this upon request. Thank you."
You pull up the compensation file for Senior Software Engineers (L5) in Denver:
| Employee | Title | Years | Rating | Salary |
|---|---|---|---|---|
| Lauren Mitchell | Sr. Software Engineer | 4.5 | Exceeds | $118,400 |
| Brian Kowalski | Sr. Software Engineer | 3.5 | Meets | $142,000 |
| Gap | −16.6% | |||
Same title. Same level. She has a year more experience and better ratings. He was hired during the Q3 2024 talent crunch at a 20% market premium. Everyone knew it was a market adjustment. The question is whether "the market" is a valid explanation.
Under Colorado's Equal Pay for Equal Work Act, it's not.
Summit Mountain Co-op's legal team has listed three reasons for the $23,600 gap between Lauren and Brian. Under Colorado's Equal Pay for Equal Work Act, which of these can legally justify a pay difference?
Click each to mark it LEGAL or ILLEGAL, then submit.
0 of 3 marked
"Thanks Marcus. I'll be direct."
She shares her screen: three performance reviews, her offer letter, and the text of SB 23-105.
"A Stripe recruiter quoted me $145K for the same role two weeks ago. I ran the numbers and started asking questions."
"Based on conversations, I believe I'm significantly below at least one male colleague at the same level. He was hired after me. Lower ratings."
"Under SB 23-105, I'm formally requesting the pay scale for my position."
Lauren has invoked SB 23-105. Colorado law requires you to provide the pay scale for her position. But your L5 band is 18 months old and doesn't reflect the premiums you paid during the talent crunch. Whatever number you share will either confirm her suspicion or create a new problem.
"Lauren, I'm going to update our L5 band to reflect current market rates. I'll have the updated pay scale to you by end of week. And I'm going to be straight with you. I think you're right that there's a gap worth looking into."
Lauren "I appreciate that. But Marcus, when I get that pay scale and see where I sit versus where Brian sits, we both know what the next conversation is going to be."
You "I know."
Lauren "I don't want to leave Summit Mountain Co-op. I want Summit Mountain Co-op to be the kind of company that fixes this without me having to hire a lawyer."
She pauses.
Lauren "But I will hire one if I have to."
SB 23-105 requires employers to provide the pay scale for the position. Sharing an outdated band that doesn't match what you're actually paying creates discoverable evidence of a broken system. Updating first is more work.but it's defensible work.
"Lauren, here's the L5 pay scale: $95,000 to $125,000."
A pause.
Lauren "The max is $125K?"
You "That's the current band on file, yes."
Lauren "Then how is someone at the same level making more than $125K? Because I know they are. Either the band is wrong, or someone is being paid outside the system. Both of those are problems."
She's right. Brian's $142K blows through the top of the band. You've just given Lauren proof that Summit Mountain Co-op's compensation framework is broken.or selectively applied.
Sharing a pay scale that doesn't match reality creates worse evidence than sharing nothing. If Lauren's lawyer later discovers Brian is paid $17K above the band maximum, the outdated scale becomes Exhibit A: proof that the company doesn't follow its own rules.
"Lauren, let me pull the data together properly. Can I get back to you in two weeks?"
Lauren "Two weeks for a number you should already have?"
She's polite. You can hear the Stripe offer ticking in the background.
Lauren "I'll wait. But Marcus, the fact that it takes two weeks tells me something about how this company thinks about pay."
She accepts Stripe's offer eleven days later. No complaint. She just leaves. And she tells the other three women on the engineering team why.
Under Colorado’s Equal Pay Act, Lauren had the right to know the pay scale. Taking two weeks signals that pay data isn’t managed. Under SB 23-105, maintaining current scales is a recordkeeping requirement, not optional.
Tom Brennan modeled three scenarios. Click each card for the breakdown.
Under C.R.S. 8-5-102, "market rate" is not a defence. Back pay plus equal liquidated damages is the floor. SB 23-105 posting violations remain open.
Posting fix clears the SB 23-105 finding. Privileged audit surfaces C.R.S. 8-5-102 exposure first. CDLE weighs voluntary remediation in mitigation.
A class-action attorney has already tagged Summit Mountain Co-op employees on LinkedIn. Lauren has consulted counsel. SB 23-105 posting violations are public record.
Before the CFO meeting, reflect. There's no right answer.but where you stand shapes how you lead. Click on the grid to place yourself.
Tom Brennan, the CFO, has run the numbers.
Brennan "If we update every pay band to current market and level up everyone who's below the new minimum, that's $2.1 million annually. That's 1.8% of revenue."
"If we adjust only the people who've formally complained. Lauren today, maybe two or three more. That's $280K. A fraction."
"I know which number the board will prefer. And I'm guessing you're about to tell me why the smaller number is actually the more expensive one."
You "Lauren alone: if she files under the Colorado Equal Pay for Equal Work Act, we're looking at the salary differential times every year she's been underpaid.that's roughly $94K in back pay. Plus liquidated damages equal to that amount. Plus her attorney's fees. And 'market rate' is explicitly not a defense in Colorado."
Brennan Long pause. "How many more Laurens are there?"
You "I don't know yet. That's the problem."
He looks at the spreadsheet again. "Present your options at the leadership meeting tomorrow."
Brennan wants targeted fixes. $280K. Your General Counsel just told you a class action attorney has been advertising on LinkedIn, tagging Summit Mountain Co-op employees in posts about Colorado pay equity rights. Three more employees have filed SB 23-105 pay scale requests this week.
The CEO is in the room. She'll back whoever makes the stronger case.
"The full audit will cost us $2.1 million in remediation, phased over twelve months. Here's what it buys: a defensible position if the CDLE investigates our Colorado pay data report. A response to the class action attorney circling our employees. And a story we can tell candidates.we fixed it before anyone made us."
Brennan "I don't love the number. But I like the alternative less. The last company the CDLE went after settled for $15 million."
The CEO nods. "Do the audit. Under privilege. And Marcus. I want a timeline on my desk by Friday."
A privileged pay equity audit, conducted under attorney-client privilege with outside counsel, lets you find and fix gaps before they become lawsuits. The key: the audit itself may be protected from discovery. Individual complaint-by-complaint fixes are not.
"Two tracks. Track one: resolve Lauren's case now. Market adjustment, back pay differential, done. Track two: commission a pay equity analysis over Q2. Full remediation starts next comp cycle."
Brennan "When you say 'pay equity analysis'.does that create documents that a plaintiff's attorney can subpoena?"
You "If we run it through outside counsel, it's privileged."
Brennan "Then run it through outside counsel. And make sure Lauren signs something."
Lauren accepts the adjustment. She doesn't sign a release.her lawyer tells her not to. The analysis reveals 11 more employees with similar gaps. You're back in Brennan's office in six months with a bigger number.
Running the pay equity analysis through outside counsel creates attorney-client privilege. meaning the analysis itself may be protected from discovery in litigation. This is smart legal strategy. But privilege protects the document, not the underlying facts. When the analysis reveals 11 more gaps, those employees still have the same rights Lauren exercised under Colorado’s Equal Pay Act. Privilege buys time and strategic control. it doesn’t eliminate the obligation to remediate.
"Right approach. Handle the squeaky wheels. We don't go looking for problems."
Narrator Six weeks later, Lauren's attorney files a CDLE complaint naming 12 employees: Lauren plus 11 other women in Denver, all L4 or L5, all paid below male comparators.
"Our clients, twelve current and former employees of Summit Mountain Co-op's Denver office, have filed a CDLE complaint alleging systemic violations of the Colorado Equal Pay for Equal Work Act (C.R.S. 8-5-102). We are also evaluating claims under SB 23-105."
The complaint-by-complaint approach lasted six weeks.
A CDLE complaint naming 12 employees turns an individual dispute into a systemic discrimination claim. Under Colorado’s Equal Pay for Equal Work Act (C.R.S. 8-5-102), each employee can recover the full differential for up to four years, plus interest and attorney’s fees. The complaint also opens SB 23-105 enforcement.
Read the draft Compensation Policy. Click any section with a violation.
Some sections are compliant. Submit when done.
Summit Mountain Co-op Inc.
Compensation Policy 2026. Draft for Review
Section 2. Job Posting Policy.
"Pay scales will be included in job postings for positions physically located in Colorado. Fully-remote roles, roles where the hiring manager has not finalised the band, and confidential executive searches may use 'competitive compensation' language at the recruiter's discretion."
Section 3. Workforce Demographics
Total headcount: 2,200 across 5 states. Gender split: 61% male, 39% female. Breakdown by level, function, and location available in the HRIS.
Section 4. Pay Setting Methodology
"Compensation is determined by market benchmarking, individual negotiation, and prior salary history where available and legally permitted."
Section 5. Pay Scale Disclosure
"Pay scales will be provided to Colorado employees upon written request to their HRBP. Requests will be processed within 30 business days."
Section 8. Pay Discussion Policy
"Employees may discuss their own compensation with colleagues. However, sharing compensation data of other employees obtained through HR system access or managerial authority is prohibited and may result in disciplinary action."
0 section(s) flagged
SB 23-105. Compensation range and benefits in every posting. No employee threshold. Reaches remote-eligible roles performable in Colorado.
C.R.S. 8-5-203. Promotional Opportunity Notice. Announce each job opportunity employees can apply for, then give post-selection notice of who was chosen. Colorado-unique.
C.R.S. 8-5-102. Equal pay for substantially similar work. "Market rate" is not a defence.
C.R.S. 8-2-122. Salary history ban. Cannot ask. Cannot use, even if volunteered.
C.R.S. 8-5-104. Employees may discuss their own wages. Discipline for doing so is independent exposure.
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