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June 6, 2023 SB 23-105
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0061
Sen. Danielson; Buckner
Rep. Gonzales-Gutierrez; Bacon
Date:
Bill Status:
Fiscal Analyst:
June 6, 2023
Signed into Law
Bill Zepernick | 303-866-4777
bill.zepernick@coleg.govv
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 employees. 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:
The fiscal note reflects the enacted bill.
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
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June 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 hiring employees, 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 instead requires employers to provide notice to employees for job opportunities, as
defined in the bill, rather than for promotional opportunities, with some exceptions. The bill outlines
information that must be included in these notices, including information about salary, wages,
benefits and other compensation, and the anticipated date when the application window will close.
For employers physically located outside of Colorado who employee fewer than 15 remote workers
in Colorado, the notification requirements only apply to remote job opportunities through July 1, 2029.
The CDLE must promulgate rules on notification requirements for temporary, interim, and acting
positions that require immediate hire.
Career development and progression. The bill exempts “career development” and “career
progression” from the job posting and employee notification requirements under current law and
under the bill. 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.
Notice to employees when filling job. Lastly, after a selected candidate for a job opportunity begins
work, the bill requires the employer to provide a notice to employees who will regularly be working
with the selected candidate within 30 days of the person starting work in the position. 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. The employer is not required to share information
about a selected candidate if it would violate the candidate’s privacy rights or place their health or
safety at risk.
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. It also 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 Page 3
June 6, 2023 SB 23-105
around pay transparency in job postings and notifications regarding promotion opportunities, which
are expanded by the current bill.
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
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June 6, 2023 SB 23-105
Table 2
State Expenditures Under SB 23-105 (Cont.)
FY 2023-24 FY 2024-25
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.
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 pay date shift in the first year.
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June 6, 2023 SB 23-105
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 $294,000 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.
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, individuals 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.
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June 6, 2023 SB 23-105
Statewide Human Resource Impacts
The bill impacts all state agencies regarding employee hiring practices. 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.
Institutions of Higher Education
Similar to the state agency and DPA impacts above, institutions of higher education will have
increased workload and costs under the bill to adjust hiring practices, provide information on career
progression, respond to wage discrimination complaints, as well as to potentially pay higher
settlements or awards for back pay in such cases. Costs will vary significantly by institution, primarily
depending on the number of employees. Larger institutions will likely require additional HR staff. It
is assumed that any costs to institutions of higher education will be addressed using institutional
revenue.
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.
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.
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June 6, 2023 SB 23-105
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 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. Costs for settlements and awards in employment
discrimination cases may also increase from the extended period for which back pay may be awarded
in these cases.
Effective Date
The bill was signed into law by the Governor on June 5, 2023, and 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.
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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.
The University of Colorado System estimates that it will have costs of $1.7 million per year for an
additional 14 FTE across its campuses and within its central administration. The fiscal note assumes
that any increase in HR staffing will be less than this amount, given the amendments to the bill to
reduce its scope and the potential for offsetting reductions in workload from modified requirements
for career progression and development.
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.