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May 30, 2024 HB 24-1008
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0124
Rep. Duran; Froelich
Sen. Danielson; Kolker
Date:
Bill Status:
Fiscal Analyst:
May 30, 2024
Vetoed by Governor
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 would have expanded general contractor liability for wage claims involving
their subcontractors. It would have increased state expenditures and may have
increased state revenue on an ongoing basis beginning in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill would have required an appropriation of $99,986 to multiple
state agencies.
Fiscal Note
Status:
The final fiscal note reflects the enrolled bill. This bill was vetoed by the Governor on
May 17, 2024; therefore, the impacts identified in this analysis do not take effect.
Table 1
State Fiscal Impacts Under HB 24-1008
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures General Fund $99,986 $162,049
Centrally Appropriated $10,030 $34,171
Total Expenditures $110,016 $196,220
Total FTE 0.7 FTE 1.8 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $14,998 $24,307
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May 30, 2024 HB 24-1008
Summary of Legislation
Under the bill, a general contractor enter into a construction contract is liable for all amounts
owed to an employee, including the amounts owed by a subcontractor acting under, by, or for
the general contractor. 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 Personnel and
Administration (DPA) by about $110,000 in FY 2024-25 and $196,000 in FY 2025-26, paid from
the General Fund. Expenditures are shown in Table 2 and detailed below. Page 3
May 30, 2024 HB 24-1008
Table 2
Expenditures Under HB 24-1008
FY 2024-25 FY 2025-26
Department of Labor and Employment
Personal Services $44,568 $139,803
Operating Expenses $640 $2,304
Capital Outlay Costs $6,670 $13,340
Software Licenses $3,301 $6,602
Centrally Appropriated Costs
1
$10,030 $34,171
FTE – Personal Services 0.5 FTE 1.8 FTE
CDLE Subtotal $65,209 $196,220
Department of Personnel and Administration
Legal Services $44,807 -
FTE – Legal Services 0.2 FTE -
DPA Subtotal $44,807 -
Total Cost $110,016 $196,220
Total FTE 0.7 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
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.
The CDLE also requires 1.7 FTE beginning in FY 2025-26 for compliance investigation staff to
address an increase in the volume and complexity of construction-related complaints and
investigations (see Assumptions section above). Standard operating and capital outlay costs are
included and first-year costs assume a July 2024 start date.
Department of Personnel and Administration. The Department of Personnel and
Administration requires 350 hours of legal services (0.2 FTE) at a rate of $128.02 per hour in
FY 2024-25 provided by the Department of Law to address 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
May 30, 2024 HB 24-1008
Effective Date
The bill takes effect on July 1, 2025, assuming no referendum petition is filed.
Technical Note
The bill’s effective date precludes the CDLE from receiving an appropriation in July 2024 to
begin implementing the bill. The costs in this fiscal note assume the effective date will be
adjusted to allow for a full-year appropriation in FY 2024-25, prior to the other provisions taking
effect on July 1, 2025.
State Appropriations
For FY 2024-25, the bill requires General Fund appropriations of:
$55,179 to the Department of Labor and Employment, and 0.5 FTE; and,
$44,807 to the Department of Personnel and Administration, which is fully reappropriated to
the Department of Law, with 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.