With much fanfare, CO legislators met in a special session to focus on…
I was surprised to see the headline on the front page of the Wall Street Journal. Big companies are hiring for remote positions that can be performed in any state across the U.S. except one: Colorado. 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. Why are companies prohibiting CO residents? What does this mean for real estate?
What is in the new law?
The Wall Street Journal last week reported that big national employers — like Johnson & Johnson, McKesson Corporation and Cardinal Health — all have posted remote-work jobs with a disclaimer that the job cannot be done from Colorado. The newspaper’s headline was “Many Companies Want Remote Workers — Except From Colorado,” stoking criticism from opponents of the measure who say burdensome government regulation is costing Coloradans jobs.
The legislation, aimed at ensuring women are paid equally to men, was a priority for Democrats three years ago. It was a first-in-the-nation policy that also requires that companies post internal advancement opportunities, and it creates a mechanism for people to file complaints with the state if they believe they are being underpaid because of their gender.
Why are many major companies avoiding Colorado?
Across the internet, an array of job listings state the work can’t be done in Colorado. At Johnson & Johnson, roles recently posted for a commercial finance senior manager and a senior manager in operations include this caveat: “Work location is flexible if approved by the Company except that position may not be performed remotely from Colorado.” At commercial real-estate giant CBRE Group Inc., an ad for a project management director notes in bold: “This position may be performed remotely anywhere within the United States except the State of Colorado.”
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.
What does this mean for real estate?
It does not seem like this new law alone will have much impact on real estate. There is a trend towards more back to the office or hybrid work and therefore companies with offices in Colorado will have to comply with this rule anyways. Companies outside the state are limiting postings of remote work in Colorado but not enough to make a meaningful impact on real estate.
Although, the current impact on real estate and businesses is low, the long-term impact could be large. We have seen over the last several years many companies move from high regulation states like California to places like Colorado, Texas, or Georgia due to the more favorable business climate. As regulations like the pay equity law pile on, businesses will rethink Colorado and opt for places like Salt Lake City, Boise, Austin, Atlanta, Nashville, etc…
The lack of advertising of jobs in Colorado highlights an up-and-coming trend that we will see more often. In the past, most employees came into the office so whatever the local or state rules were companies were beholden to them. Now the paradigm has shifted. Companies that have remote workers now have more say on where the person is located. Colorado’s law highlights how government intervention can have unintended consequences. Fortunately, the gender equity law currently will have no impact on Colorado real estate, but if additional measures/regulations are passed there could be sizable impacts.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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