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February 6, 2024 HB 24-1008
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0124
Rep. Duran; Froelich
Sen. Danielson; Jaquez Lewis
Date:
Bill Status:
Fiscal Analyst:
February 6, 2024
House Business & Labor
Colin Gaiser | 303-866-2677
colin.gaiser@coleg.gov
Bill Topic: WAGE CLAIMS CONSTRUCTION INDUSTRY CONTRACTORS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill expands general contractor liability for wage claims involving their
subcontractors. It increases state expenditures and may increase state revenue on an
ongoing basis beginning in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $256,094 to the Colorado
Department of Labor and Employment.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1008
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures General Fund $256,094 $148,709
Centrally Appropriated $42,195 $34,171
Total Expenditures $298,288 $182,880
Total FTE 2.4 FTE 1.8 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $38,414 $22,306
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February 6, 2024 HB 24-1008
Summary of Legislation
Under the bill, a general contractor and a subcontractor that is the direct employer of an
employee are jointly liable for debts owed based on a wage claim or investigation. The bill
requires that a subcontractor that receives a written demand for payment forward the demand
to the general contractor within three business days. Subcontractors that fail to do this will be
fined $2,000, paid to the general contractor, plus any other owed amounts.
The bill also allows a general contractor to require that a subcontractor provide pay data and
contact information for employees of the subcontractor, plus an affidavit attesting to whether
the contractor has participated in a civil or administrative proceeding within the last five years
and the outcome of the proceeding.
Assumptions
The Division of Labor Standards & Statistics (DLSS) in the CDLE receives an average of 353 wage
complaints per year against construction industry employers. Because the bill will add a second
liable party to construction-related wage complaints, the fiscal note assumes the bill will
increase the volume of construction complaints by 5 percent, or 18 complaints per year.
The bill will also increase the time required for investigations. Currently, complaint-based
investigations in the construction industry take an average of 55 hours. The bill adds a second
liable party to these complaints, which adds an estimated 10 percent more work to the
investigation. The fiscal note assumes the average investigation time will increase by 5.5 hours.
State Revenue
The bill may increase state revenue from fines and filing fees beginning in FY 2024-25. These
revenue streams are subject to TABOR.
Labor and Employment. The bill may increase fine revenue to the Wage Theft Enforcement
Fund in the CDLE, as the bill may lead to an increase in the number of complaints. The fiscal
note assumes an additional 18 construction-related complaints as a result of the bill. Because
the CDLE may waive fines to encourage the employer to pay the employee all wages and
penalties, any increase in revenue is expected to be minimal.
Judicial Department. The Judicial Department may see a small increase in revenue from
additional case filings as a result of the bill. Any revenue impact is expected to be minimal.
State Expenditures
The bill increases state expenditures in the CDLE and the Department of Law by about $300,000
in FY 2024-25 and $183,000 in FY 2025-26, paid from the General Fund. Expenditures are shown
in Table 2 and detailed below.
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February 6, 2024 HB 24-1008
Table 2
Expenditures Under HB 24-1008
FY 2024-25 FY 2025-26
Department of Labor and Employment
Personal Services $175,458 $139,803
Operating Expenses $2,816 $2,304
Capital Outlay Costs $20,010 -
Software Licenses $6,602 $6,602
Centrally Appropriated Costs
1
$42,195 $34,171
FTE – Personal Services 2.2 FTE 1.8 FTE
CDLE Subtotal $247,080 $182,880
Department of Law
Legal Services $51,208 -
FTE – Legal Services 0.2 FTE -
Law Subtotal $51,208 -
Total Cost $298,288 $182,880
Total FTE 2.4 FTE 1.8 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Labor and Employment. The Division of Labor Standards and Statistics in the CDLE requires
1.7 FTE annually for compliance investigation staff to address an increase in the volume and
complexity of construction-related complaints and investigations (see Assumptions section
above). The CDLE also requires 0.5 FTE in FY 2024-25 and 0.1 FTE in FY 2025-26 and ongoing to
stand up the program, update labor law guidance publications and outreach presentations,
update internal documents to comply with the bill’s requirements, and translate updates to
outreach materials into Spanish. Standard operating and capital outlay costs are included and
first-year costs assume a July 2024 start date.
Department of Law. The Department of Law requires 400 hours of legal services (0.2 FTE) at a
rate of $128.02 per hour in FY 2024-25 only to provide general counsel and legal support
addressing a variety of current state construction contracts that would need to be redrafted
based on the requirements of this bill.
Judicial Department. The bills may increase the number of construction-related wage claims
and increase workload for the trial courts in the Judicial Department. Any workload increase is
absorbable within existing resources.
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. Page 4
February 6, 2024 HB 24-1008
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature. It applies to wage claims and investigations that begin on or after that date.
State Appropriations
For FY 2024-25, the bill requires the following General Fund appropriations:
$204,886 to the Department of Labor and Employment, and 2.2 FTE; and
$51,208 to the Department of Law, and 0.2 FTE.
State and Local Government Contacts
Judicial Labor Law
Personnel Regulatory 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 the General Assembly website.