Page 1
April 6, 2023 SB 23-105
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated March 17, 2023)
Drafting Number:
Prime Sponsors:
LLS 23-0061
Sen. Danielson; Buckner
Rep. Gonzales-Gutierrez; Bacon
Date:
Bill Status:
Fiscal Analyst:
April 6, 2023
Senate Second Reading
Bill Zepernick | 303-866-4777
bill.zepernick@coleg.gov
Bill Topic: ENSURE EQUAL PAY FOR EQUAL WORK
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☒ Statutory Public Entity
The bill requires the Colorado Department of Labor and Employment to investigate
and take enforcement action regarding complaints alleging violations of state pay
equity laws, and makes updates to job posting and employee notification requirements
for employers when hiring and promoting staff, including to specify that such posting
and notices are not required in instances of career development or career progression.
The bill increases state expenditures, minimally impacts state revenue, and impacts
workload for local governments and other public entities on an ongoing basis.
Appropriation
Summary:
For FY 2023-24, the bill requires and includes an appropriation of $412,438 to multiple
state agencies.
Fiscal Note
Status:
This revised fiscal note reflects the introduced bill, as amended by the Senate
Business, Labor, and Technology Committee and the Senate Appropriations
Committee.
Table 1
State Fiscal Impacts Under SB 23-105
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund $412,438 $935,011
Centrally Appropriated $102,925 $276,414
Total Expenditures $515,363 $1,211,425
Total FTE 3.5 FTE 9.7 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $61,866 $140,252 Page 2
April 6, 2023 SB 23-105
Summary of Legislation
The bill makes several changes to state law related to the enforcement of pay equity statutes and the
requirements on employers when filling positions and promoting staff, as outlined below.
Investigation and enforcement. The bill requires the director of the Department of Labor and
Employment (CDLE) to investigate and mediate complaints regarding violations of Colorado’s pay
equity statutes, follow leads regarding such violations, order compliance and relief upon finding a
violation, and promulgate rules to enforce these provisions of law. In addition, the bill extends the
maximum period for which a person pursing a wage discrimination complaint may receive back pay
to six years, from three years under current law. The bill excludes employees of the State of Colorado
from the CDLE investigations process. The CDLE will be required to begin investigating complaints
by January 1, 2024, and to begin mediation of complaints starting July 1, 2024.
Hiring and promotion. Under current law, employers are required to provide notice to all employees
about opportunities for promotion and include salary and benefit information when posting a job
opening. This bill defines “promotional opportunity” and “job opportunity,” and requires employers
to send notice of both types of opportunities to employees, not only promotional opportunities.
Career development and progression. The bill defines “career development” and “career
progression” and specifies that the job posting and employee notification requirements under current
law and under the bill do not apply to these situations. For positions with career progression, the
employer must disclose the requirements for career progression to eligible employees, including the
terms of compensation, benefits, status, duties, and access to further advancement.
Application window and competitive hiring. In cases where the employer is interviewing
candidates, or formally or informally considering more than one candidate, for a job opportunity or
promotion opportunity, the job posting and the notice to employees must state the date when the
application window is closing, which must be at least five days after the notice is given.
Notice to employees when filling job and promotion opportunities. Lastly, after a selected
candidate for a job or promotional opportunity begins work, the bill requires the employer to provide
notice to employees who will regularly be working with the selected candidate within 30 days of the
person starting work in the position. Information in the notice must include the candidate’s name and
former title if previously employed with the employer, as well as how an employee can demonstrate
their interest in similar positions in the future, including contacts to whom an employee can express
their interest.
Background
Senate Bill 19-085 removed the authority of the CDLE to take enforcement action for gender-based
wage discrimination complaints and instead allowed a person to pursue a civil action within two years
of an alleged violation and authorized the CDLE to establish rules to accept and mediate these types
of complaints. The CDLE did not establish such a process and does not currently accept these type of
complaints. CDLE currently enforces other provision of SB 19-085, including requirements around
pay transparency in job postings and notifications regarding promotion opportunities, which are
expanded by the current bill. Page 3
April 6, 2023 SB 23-105
State Revenue
The bill may increase state cash fund revenue from employer penalties to the Wage Theft Enforcement
Fund. Overall, any revenue is expected to be minimal as the Colorado Wage Act encourages the CDLE
to waive most fines assessed against employers if the employer complies with the law. Any revenue
reduction from court filing fees is also expected to be minimal.
State Expenditures
The bill increases state expenditures by about $0.5 million in FY 2023-24 and $1.2 million in FY 2024-25
and future years, paid from the General Fund. These costs, summarized in Table 2, are for the creation
of a new wage discrimination investigation and enforcement unit in the CDLE, as well as central
human resource support and training in the Department of Personnel and Administration (DPA). The
bill also impacts workload for human resource staff and hiring managers across state agencies and
institutions of higher education. These impacts are discussed in more detail below.
Table 2
State Expenditures Under SB 23-105
FY 2023-24 FY 2024-25
Department of Labor and Employment
Personal Services $197,633 $555,536
Operating Expenses $9,451 $25,788
Capital Outlay Costs $33,350 -
Legal Services $42,296 $95,166
Document, Evidence, and Translation Services $7,500 $15,000
Travel $2,360 $4,720
Centrally Appropriated Costs
1
$80,543 $221,376
FTE – Personal Services 2.1 FTE 6.2 FTE
FTE – Legal Services 0.2 FTE 0.5 FTE
CDLE Subtotal $373,133 $917,586
Department of Personnel and Administration
Personal Services $97,813 $234,751
Operating Expenses $2,025 $4,050
Capital Outlay Costs $20,010 -
Centrally Appropriated Costs
1
$22,382 $55,038
FTE – Personal Services 1.2 FTE 3.0 FTE
DPA Subtotal $142,230 $293,839
Total Costs $515,363 $1,211,425
Total FTE 3.5 FTE 9.7 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Page 4
April 6, 2023 SB 23-105
Department of Labor and Employment
To create a new investigation and enforcement unit for wage discrimination complaints, the CDLE
will have costs of about $373,000 FY 2023-24 and $918,000 in FY 2024-25 and future years for additional
staff, legal services, various document, evidence, and translation services, and travel costs, as
described below. These costs are assumed to be paid from the General Fund.
Assumptions. According to the CDLE, between 2,000 to 3,000 pay discrimination lawsuits are filed
annually. It is assumed that a significant portion of these cases will pursue enforcement actions
through the new process established in this bill, whether in addition to, or in place of, pursing a civil
action. The exact number of complaints is unknown, nor is the criteria that the CDLE will use to
prioritize cases. Generally, it is assumed that the CDLE will focus its resources on complaints
involving allegations of systemic wage discrimination and/or larger numbers of employees.
Staffing. Based on the assumptions above, the CDLE will require about 6.2 FTE on an ongoing basis
for staff in the new unit. This staff will include a unit manager, program assistant, and compliance
investigators. Given the nature of this work, an economist is also required to process and evaluate
wage data. These investigative and administrative staff are assumed to start on January 1, 2024. In
the first year, staffing is prorated to 2.1 FTE based on assumed staff start dates. In addition, an
administrative law judge and legal assistant are required to mediate cases, issue enforcement orders,
and respond to appeals. These legal staff are assumed to begin in FY 2024-25, based on the bill’s
July 1, 2024, start date for mediation and the assumption that initial investigations will take several
months before requiring enforcement orders or appeals.
Standard operating and capital outlay costs are included for this staff, as well as licenses for standard
software used by the Division of Labor Standards and Statistics. Personal services costs are prorated
for the General Fund paydate shift in the first year.
Legal services. It is estimated that the CDLE will require about 400 hours of legal services in the first
year and 900 hours in the second and future years, provided by the Department of Law at a cost of
$105.74 per hour. In the first year, legal services will include support for rulemaking; ongoing legal
service needs reflect the need for both general counsel and complaint-specific support. The
Department of Law requires reappropriated funds and 0.2 FTE in FY 2023-24 and 0.5 FTE in
FY 2024-25 for this work.
Other costs. The CDLE will have a variety of other costs to operate the unit, including cost for
document management, evidence processing, postage, and translation and interpretation services.
Together, these items are estimated to cost around $15,000 per year. In addition, staff travel will cost
around $4,700 per year, based on staff reimbursement for 8,000 miles of travel in a personal vehicle.
Costs are prorated for a half-year impact in the first year.
Department of Personnel and Administration
The DPA will have costs of about $142,000 and 1.2 FTE in FY 2023-24 and $290,000 and 3.0 FTE in
FY 2024-25 and future years to support state agencies and provide training on the requirements of the
bill. These costs are assumed to be paid from the General Fund.
Page 5
April 6, 2023 SB 23-105
Staffing. Specifically, the DPA will require HR and training staff to train state agencies and
supervisors on the requirements of the bill regarding employee notices. The DPA will also provide
additional support and analysis for agencies involved in wage discrimination complaints under
current law (which may be filed through the courts or the state personnel system, even if state
employees are excluded from the new CDLE process under the bill). By expanding the length of time
that an employee may seek redress for alleged wage discrimination, additional work is required to
gather and analyze data to respond to the complaint. Standard operating and capital outlay costs are
included for these staff, and costs are prorated for a January 1, 2024, start date and the General Fund
pay date shift.
Risk management costs. By extending the maximum period that a person may receive back pay from
three years to six years, persons with a successful wage discrimination claim against a state agency
will be able to recoup a larger settlement. Such employment settlements are paid from the Risk
Management Fund in the DPA, which is supported by common policy assessments paid by state
agencies based on prior settlements and actuarial analysis. Given that the current two-year statute of
limitation on wage discrimination complaints is not changed by the bill, it is assumed that larger
settlements, if they are incurred, will not impact the Risk Management Fund for several years, and
will be addressed through the annual budget process as more information becomes available based
on the number of cases, case outcomes, and the agencies involved.
Statewide Human Resource Impacts
The bill impacts all state agencies and institutions of higher education regarding hiring and promotion
of employees. These impacts are described below.
Posting and notice requirements. The bill increases workload for state agencies and institutions to
ensure that all job opportunities are shared internally and to send the required notice to specified
employees within thirty days after filling the position. To the extent that some state agencies are
currently posting or sending notice to employees about staff changes that are classified as “career
progression” or “career development” under the bill, workload will be decreased and may offset some
of the estimated staff time for other duties under the bill. Given the timeline for providing notice, and
the fact than many agencies and institutions already communicate this type of information to
employees after making hiring and promotion decisions, the overall impact is assumed to be minimal
and no change in appropriations is required.
Career progression. It is assumed that the various aspects of the state personnel system, including
pay plans and descriptions of classified positions by level, are sufficient for state agencies to meet the
disclosure requirements of the bill concerning career progression. Workload may increase to the
extent that individual departments develop more detailed information for their staff about the
requirements for career progression.
Judicial Department
The bill may reduce civil cases filings with the trial courts as a result of the CDLE hearing process.
However, given that filing a lawsuit and a complaint with the CDLE may both occur, it is assumed
that no reduction in appropriations is required.
Page 6
April 6, 2023 SB 23-105
Centrally Appropriated Costs
Pursuant to a Joint Budget Committee policy, certain costs associated with this bill are addressed
through the annual budget process and centrally appropriated in the Long Bill or supplemental
appropriations bills, rather than in this bill. These costs include employee insurance, supplemental
employee retirement payments, and, in the case of the CDLE, indirect cost assessments and leased
space for new staff. These costs are shown in Table 2 above.
Other Budget Impacts
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve. Based on this fiscal note, the
bill is expected to increase the amount of General Fund held in reserve by the amounts shown in
Table 1, decreasing the amount of General Fund available for other purposes.
Local Government and Statutory Public Entity Impacts
Similar to the state impacts described above, local governments—including counties, municipalities,
special districts, and school districts—and statutorily created public entities—such as PERA, Connect
for Health Colorado, Pinnacol Assurance, the Colorado Housing Finance Authority, to name only a
few—will have increased costs to adjust hiring processes for job and promotional opportunities, to
ensure than required information is included and shared with employees. In addition, local
governments will be required to address any employee wage complaints filed with the CDLE. To the
extent local governments and public entities no longer post jobs and provide notice in situations
classified as career progression and career development under the bill, workload may decrease and
offset other impacts under the bill.
Effective Date
The bill takes effect January 1, 2024, assuming no referendum petition is filed. The provisions of
Section 8-5-201, C.R.S., as amended by the bill, apply to promotions, career progressions, and career
developments that take place on or after this effective date.
State Appropriations
For FY 2023-24, the bill requires and includes the following appropriations:
$292,590 to the CDLE from the General Fund, and 2.1 FTE. Of this amount, $42,296 is
reappropriated to the Department of Law for legal services, with an additional 0.2 FTE; and
$119,848 to the DPA from the General Fund, and 1.2 FTE
Page 7
April 6, 2023 SB 23-105
Departmental Difference
The DPA estimates that the bill requires 8.0 FTE, including three human resource specialists, three
data management analysts, and two trainers. The fiscal note assumes that the work required of the
department can be conducted with fewer staff.
State and Local Government Contacts
All State and Local Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.