A Colorado law’s unintended consequence

What a law is intended to do and what it actually does are often two different things. Politicians would do well to remember that even the most well-intentioned political interventions create unintended consequences. Want-to-be remote workers in Colorado learned that the hard way.

The coronavirus pandemic is waning, but it may have long-lasting effects on American life. One of those is an increase in remote work. Many employers discovered that allowing employees to work from home didn’t lower productivity, but did reduce expenses such as utilities and office space. Many workers enjoy the flexibility. Working from home gave them the ability to help with their children or parents.

Perhaps the greatest advantage is that an employee can work from anywhere there’s an internet connection. That can be life-changing for workers in expensive metropolitan areas. But there’s a curious caveat that has begun popping up in some remote job listings, The Wall Street Journal reported last week. Some postings indicate that the job may be performed anywhere but Colorado.

For instance, the Journal noted, job listings at Johnson & Johnson denote the possibility of working from home “except that position may not be performed remotely from Colorado.” A job advertisement from the CBRE Group Inc. similarly stated, “This position may be performed remotely anywhere within the United States except the state of Colorado.”

The companies appear to be responding to a new Colorado law — intended to reduce the perceived gender pay gap — that requires companies to list the expected pay for new open positions, even if someone is applying to work remotely for an out-of-state company. Many major employers consider salary information proprietary.

This is classic government. First, politicians fixate on a disparity, even though many pay differences are the result of factors other than discrimination. Since 1963, it has been illegal to pay a woman less for doing the same work as a man. The so-called gender pay gap doesn’t identify individual instances of discrimination. It’s determined by comparing salaries in the aggregate. That doesn’t account for differences in experience, line of work or other salient elements.

Then, politicians pass a nice-sounding law without considering how companies will change their behavior in response.

Finally, the unintended consequences hurt the very people politicians claim they want to help. There’s a lesson here for Nevada legislators who feel drawn to weighing businesses down with new regulations.

But look on the bright side. Colorado politicians did succeed in closing the gender pay gap. All potential remote workers in Colorado are now more likely to be earning zero.