Page 1 July 19, 2023 SB 23-111 Legislative Council Staff Nonpartisan Services for Colorado’s Legislature Final Fiscal Note Drafting Number: Prime Sponsors: LLS 23-0483 Sen. Rodriguez Rep. Woodrow; Titone Date: Bill Status: Fiscal Analyst: July 19, 2023 Signed into Law Anna Gerstle | 303-866-4375 anna.gerstle@coleg.gov Bill Topic: PUBLIC EMPLOYEES' WORKPLACE PROTECTION Summary of Fiscal Impact: ☒ State Revenue ☒ State Expenditure ☐ State Transfer ☐ TABOR Refund ☒ Local Government ☒ Statutory Public Entity The bill establishes certain rights for public employees and associated enforcement procedures. The bill increases state revenue and expenditures, and potentially increases costs for certain local governments and statutory public entities, on an ongoing basis. Appropriation Summary: For FY 2023-24, the bill requires and includes an appropriation of $151,751 to the Colorado Department of Labor and Employment. Fiscal Note Status: This fiscal note reflects the enacted bill. Table 1 State Fiscal Impacts Under SB 23-111 Budget Year FY 2023-24 Out Year FY 2024-25 Revenue - - Expenditures General Fund $151,751 $254,890 Centrally Appropriated $17,717 $37,930 Total Expenditures $169,468 $292,820 Total FTE 1.2 FTE 2.2 FTE Transfers - - Other Budget Impacts General Fund Reserve $22,763 $38,233 Page 2 July 19, 2023 SB 23-111 Summary of Legislation The bill specifies that public employees have the right to: discuss or express views on workplace issues and employee rights and representation; engage in protected, concerted activity for the purposes of mutual aid or protection; participate in the political process while off-duty without discrimination, intimidation, or retaliation; speak with members of the public employer’s governing body about conditions of employment; and form or join, or refrain from participating in, an employee organization. A public employer must not discriminate against an employee for engaging the in rights listed above, interfere with the administration of an employee organization, or discriminate against an employee who has joined an employee organization or has filed a complaint related to the bill. The bill does not codify the right to recognize or negotiate a collective bargaining agreement. Definition of public employer. Under the bill, a public employer includes the following: a municipality or a city and county; a county with a population of less than 7,500; school districts and charter schools; a district, business improvement district, or special district that is a political subdivision of the state, a county, or municipality; the Colorado School for the Deaf and the Blind; a state institution of higher education; the Office of the State Public Defender; the University of Colorado Hospital Authority and Denver Health and Hospital Authority; majority and minority caucus staff for the House of Representatives and the Senate; a Board of Cooperative Services (BOCES); firefighters; and Joint Budget Committee Staff (JBC), Legislative Council Staff (LCS), the staff of the Chief Clerk of the House of Representatives, and Senate Services Staff; however, these employers may limit employee participation in the political process to the extent necessary to maintain their nonpartisan role. A public employer does not include state employees, except for those specified above, a political subdivision of the state that operates a mass transportation system, or a public employer with fewer than eight employees. No public employer may waive the bill’s provisions. Enforcement. An aggrieved party must file a claim for a violation within six months of knowing about the violation. The Division of Labor Standards and Statistics (DLSS) in the Colorado Department of Labor and Employment (CDLE) is charged with enforcing the rights under the bill and must create a process to review and investigate complaints, at the discretion of the division director. DLSS may also promulgate rules, publish guidance for employers, or provide alternative dispute resolution at its discretion. Beginning July 1, 2024, CDLE may adjudicate unfair labor practices and issue decisions. A party may appeal CDLE’s decision to the Colorado Court of Appeals, whose review Page 3 July 19, 2023 SB 23-111 must be limited to whether CDLE exceeded its jurisdiction or abused its discretion. Enforcement costs must be paid from the General Fund. State Revenue The bill increases state revenue to the Wage Theft Enforcement Fund from any fines collected. Overall, any revenue is expected to be minimal, as the Colorado Wage Act encourages the DLSS to waive most fines assessed against employers if the employer complies with the law, and DLSS has never levied a fine for an unfair labor practice. Any revenue from court filing fees is also expected to be minimal. State Expenditures The bill increases state expenditures in CDLE by $169,468 in FY 2023-24 and $292,820 in FY 2024-25, paid from the General Fund. It also increases workload for Judicial Department, and potentially costs for the Legislative Department, institutions of higher education, Department of Education, and Office of the State Public Defender. Expenditures are shown in Table 2 and detailed below. Table 2 Expenditures Under SB 23-111 FY 2023-24 FY 2024-25 Department of Labor Personal Services $83,263 $181,414 Operating Expenses $4,118 $8,506 Capital Outlay Costs $6,670 $6,670 Legal Services $57,100 $57,100 Travel Costs $600 $1,200 Centrally Appropriated Costs 1 $17,717 $37,930 FTE – Personal Services 0.9 FTE 1.9 FTE FTE – Legal Services 0.3 FTE 0.3 FTE Total $169,468 $292,820 Total FTE 1.2 FTE 2.2 FTE 1 Centrally appropriated costs are not included in the bill's appropriation. Department of Labor. CDLE requires 0.9 FTE in FY 2023-24 and 2.0 FTE in subsequent years to handle complaints filed under the bill. The fiscal note assumes approximately one complaint for every 3,800 employees, for a total of 75 complaints per year; however, investigations are at the discretion of the division director and the fiscal note assumes that most of the investigation work will not occur until FY 2024-25 when CDLE may adjudicate claims and issue decisions. A supervisor will handle management of all complaints, outreach, questions and rulemaking on an ongoing basis. In the first year only, a policy advisor will handle the rulemaking process. In subsequent years, each complaint will require work from a compliance investigator and an administrative law judge. Standard capital Page 4 July 19, 2023 SB 23-111 outlay costs, operating expenses including software licenses, and staff travel costs are also required. Staff costs in the first year are prorated for a September 1, 2023, start date in the first year, and prorated for the General Fund pay date shift in each position’s first year. Department of Law. CDLE requires 540 hours annually for general counsel, rulemaking, and investigation support. Legal services are provided by the Department of Law at a rate of $105.74 per hour; the required hours equate to 0.3 FTE. In addition, the Department of Law may incur additional costs to provide legal counsel for institutions of higher educations, due to the number of employees across institutions that are covered by the bill. The exact cost cannot be estimated, as it depends on where institution complaints may occur, and the associated workload. As a result, any additional legal services hours for institutions of higher education will be requested through the annual budget process. Department of Personnel and Administration. Because the Department of Personnel and Administration (DPA) manages the employee benefit plans for institutions of higher education, legislative staff, the Colorado School for the Deaf and the Blind, and the Office of the State Public Defender, the DPA may have workload and costs to the extent that state agencies covered by the bill choose to engage with employee organizations acting on behalf of employees. Because state agencies are not required to engage with employer organizations, the costs are assumed to be accomplished within current appropriations. Any additional resources needed will be requested through the annual budget process. Specified state agencies. The bill increases costs by an indeterminate amount for any state entity included as a public employer in the bill to respond to complaints. This includes state institutions of higher education; LCS, OLLS, and House and Senate staff in the Legislative Department; the Colorado School for the Deaf and the Blind in the Department of Education; and the Office of the State Public Defender. The fiscal note assumes that this workload will not require a change in appropriations and that any additional resources needed will be requested through the annual budget process. Judicial Department. The bill increases workload in the trial courts in the Judicial Department by a minimal amount to handle any appeals of CDLE decisions. No change 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, which include employee insurance and supplemental employee retirement payments, are shown in Table 2. Local Government and Statutory Public Entity Similar to the state agency impacts listed above, the bill increases costs for municipalities, counties with a population of 7,500 or less, special districts, and the Denver Health and Hospital Authority to respond to any complaints filed for violations of the bill’s provisions. Cost will vary among each public employer depending on the number of complaints received. Page 5 July 19, 2023 SB 23-111 Effective Date The bill was signed into law by the Governor on June 6, 2023, and takes effect on August 7, 2023, assuming no referendum petition is filed, except that CDLE’s authority to adjudicate complaints and issue decisions takes effect July 1, 2024. State Appropriations For FY 2023-24, the bill requires and includes an appropriation of $151,751 from the General Fund to the Colorado Department of Labor and Employment, and 0.9 FTE. Of that amount, $57,100 is reappropriated to the Department of Law, with an additional 0.3 FTE. State and Local Government Contacts Counties Education Higher Education Joint Budget Committee Staff Judicial Labor Law Legislative Council Staff Legislative Legal Services Personnel Public Defender School Districts Special Districts 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.