HOUSE BILL 24-1467
BY REPRESENTATIVE(S) Bird and Sirota, Taggart, Amabile, Brown,
Daugherty, Epps, Mauro, Young, McCluskie;
also SENATOR(S) Zenzinger and Bridges, Kirkmeyer, Buckner, Exum,
Fields, Hinrichsen, Mullica, Priola, Roberts, Will.
C
ONCERNING MODIFICATIONS TO THE STATE EMPLOYEE TOTAL
COMPENSATION PHILOSOPHY
, AND, IN CONNECTION THEREWITH ,
REQUIRING THE DIRECTOR OF PERSONNEL TO ESTABLISH A STEP PAY
SYSTEM FOR STATE EMPLOYEES IN THE STATE PERSONNEL SYSTEM
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Legislative declaration. (1) The general assembly
finds and declares that:
(a) State employees are valued partners in the work of the state;
(b) State employees should receive compensation based on a pay
system that provides predictable salary increases;
(c) Pay and pay schedules for classified employees should be
aligned with the state's total compensation philosophy and step pay per the
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. partnership agreement with the certified employee organization pursuant to
section 24-50-1102.
SECTION 2. In Colorado Revised Statutes, 24-50-104, amend
(1)(a)(I), (1)(a)(II), (1)(c)(I), (1)(c)(II) introductory portion, (1)(c)(II)(C),
(1)(c)(IV), (1)(c.5)(I), (1)(j)(II)(A), (4)(a), (4)(b)(I), (4)(c), (5)(d), and
(5)(e); repeal (1)(c)(I.1), (1)(c)(I.2), (1)(c)(I.3), (1)(c)(I.5), (1)(c)(I.7),
(1)(c)(I.9), (1)(c)(II)(D), (1)(c)(II)(F), (1)(c.5)(II), and (1)(c.7); and add
(1)(a)(II.5) and (1)(c)(II)(H) as follows:
24-50-104. Job evaluation and compensation - state employee
reserve fund - created - study - report - definitions - repeal. (1) Total
compensation philosophy. (a) (I) It is the policy of the state to provide
innovative total compensation that meets or exceeds total compensation
provided by public or private sector employers or a combination of both, to
officers and employees in the state personnel system to ensure the
recruitment, motivation, and retention of a qualified and competent
workforce. For purposes of this section, "total compensation" includes, but
is not limited to, salary, group benefit plans, retirement benefits, merit
STEP
pay, incentives, premium pay practices, and leave as specified in statute or in policies of the state personnel director. For purposes of this section, "group benefit plans" means group benefit coverages as described in section 24-50-603 (9). Any monetary components of total compensation are subject to available appropriations by the general assembly.
(II) The state personnel director shall establish technically and
professionally sound survey methodologies to assess total compensation
practices, levels, and costs. Except as provided in subsection (1)(a)(III) of
this section, for purposes of this subsection (1)(a), to determine and
maintain salaries, state contributions for group benefit plans, and merit
STEP
pay that meet or exceed total compensation provided by public or private sector employment or a combination of both, the state personnel director shall quadrennially review the results of appropriate surveys by public or private organizations, including surveys by the state personnel director set forth in subsection (4)(b)(I) of this section. Any surveys provided on a confidential basis shall not be revealed except to the state auditor's office and the private firm conducting the audit required in subsection (4)(b) of this section. The state personnel director shall adopt appropriate procedures to determine and maintain other elements of total compensation, including the payment of incentive awards to employees in the state personnel system.
PAGE 2-HOUSE BILL 24-1467 The state personnel director's review and determination of total
compensation practices shall not be subject to appeal except as otherwise
authorized by law or state personnel director procedures.
(II.5) W
HEN ESTABLISHING PAY PLANS IN ACCORDANCE WITH
SUBSECTION
(5) OF THIS SECTION AND RECOMMENDING COMPENSATION FOR
STATE EMPLOYEES IN ACCORDANCE WITH SUBSECTION
(4) OF THIS SECTION,
THE STATE PERSONNEL DIRECTOR SHALL DEVELOP , AFTER NEGOTIATIONS
WITH THE CERTIFIED EMPLOYEE ORGANIZATION PURSUANT TO SECTION
24-50-1112, AN EQUITABLE PAY STRUCTURE FOR EMPLOYEES IN THE STATE
PERSONNEL SYSTEM THAT PROVIDES CONSISTENT AND PREDICTABLE SALARY
INCREASES IN COMPLIANCE WITH ANY FEDERAL OR STATE LAWS AND KEEPS
THE STATE EMPLOYEE WORKFORCE COMPETITIVE WITH MARKET
COMPENSATION
. THE REQUIREMENTS OF THIS SUBSECTION (1)(a)(II.5) DO
NOT APPLY TO EMPLOYEES OF THE STATE AUDITOR
, IN ACCORDANCE WITH
SUBSECTION
(1)(h) OF THIS SECTION.
(c) (I) The state personnel director shall establish a merit
STEP pay
system in order to provide periodic salary increases for employees in the
state personnel system;
EXCEPT THAT THE STEP PAY SYSTEM DOES NOT
APPLY TO EMPLOYEES OF THE STATE AUDITOR
, IN ACCORDANCE WITH
SUBSECTION
(1)(h) OF THIS SECTION. The purpose of the merit
STEP pay
system is to provide salary increases for employees based on performance
evaluations and salary placement within the appropriate salary range. The
state personnel director shall develop the merit pay system so that a merit
pay increase is based on the relationship of performance rating distribution
and salary range distribution. The merit pay system must include the
following characteristics:
(A) Salary range is divided into quartiles, except as set forth in
subparagraph (I.1) of this paragraph (c);
(B) The lowest quartile or distribution zone in relation to the
midpoint has the highest rate of merit pay, and the rate for each successive
quartile or distribution zone is less than the preceding quartile or
distribution zone, except as provided in sub-subparagraph (E) of this
subparagraph (I);
(C) Performance evaluations are divided into three performance
categories, except as set forth in subparagraph (I.1) of this paragraph (c);
PAGE 3-HOUSE BILL 24-1467 (D) The highest performance category has the highest rate of merit
pay, and the rate for each lower performance category is less than the
preceding category, except as provided in sub-subparagraph (E) of this
subparagraph (I); and
(E) Employees who receive an unsatisfactory performance
evaluation are not eligible for merit pay.
(I.1) On or after September 1, 2015, the state personnel director
shall review the effectiveness of the use of quartiles for salary range and
three performance categories in the merit pay system. Based on the review,
the state personnel director may adjust the number of distribution zones or
performance categories to be used in the system. Thereafter, the state
personnel director shall conduct a biennial review of the distribution zones
and performance categories and may adjust the number of distribution zones
or performance categories based on the review. The minimum number of
distribution zones the state personnel director may establish is three, and the
maximum number is six.
(I.2) If a state department or institution of higher education has a
performance review system that has a different number of performance
categories than the number used by the state personnel director in the merit
pay system, the state personnel director shall establish a method for
converting the departmental or institutional categories into the categories
used in the merit pay system.
(I.3) Based on professionally sound survey methodologies, the state
personnel director shall establish annually one or more priority groups of
employees that have priority to receive merit pay based on available
moneys. The priority groups must be based on length of service, relation to
the salary range midpoint, performance, recruitment, retention needs, and
other factors established by the director. The amount of merit pay that an
employee in the state personnel system may receive depends first on the
employee's priority group and then on the amount of merit pay, if any,
associated with the employee's performance category and salary range.
(I.5) (A) Except as set forth in sub-subparagraph (B) of this
subparagraph (I.5), the merit pay system applies uniformly across state
departments and institutions of higher education subject to the provisions
of subparagraph (I.9) of this paragraph (c). For each state fiscal year the
PAGE 4-HOUSE BILL 24-1467 state personnel director shall determine the appropriate merit pay rates that
apply to all state departments and institutions and the priority group or
groups that receive merit pay.
(B) Notwithstanding any provision of this section to the contrary, an
institution of higher education may enact its own merit pay system, so long
as the system is consistent with the provisions of this subsection (1).
(I.7) An employee who is at or above the maximum amount for his
or her salary range is not eligible for a merit pay salary increase, but is
eligible for a merit pay payment that is nonbase building.
(I.9) Merit pay is subject to available appropriations. Except as set
forth in subparagraph (II) of paragraph (j) of this subsection (1), the general
assembly shall appropriate any moneys for merit pay in the annual general
appropriation act in suitable personal services line items or other line items
that include salary appropriations.
(II) In addition to any other requirements set forth in this paragraph
(c), SUBSECTION (1)(c)(II), the department of personnel shall develop the
merit STEP pay system so that it:
(C) Is developed with input from employees in the state personnel
system, managers, and other affected parties;
AND
(D) Emphasizes planning, management, and evaluation of employee
performance; and
(F) Prohibits a forced distribution of performance ratings.
(H) MINIMIZES EMPLOYEE PAY DISRUPTIONS RESULTING FROM
IMPLEMENTATION OR MODIFICATION OF STEP PAY
.
(IV) Each state department and institution of higher education shallensure that it has a performance review system that can be used to
implement a merit pay system. The state personnel director shall encourage
state departments and institutions of higher education to implement
performance evaluations of employees that are as objective as possible and
that, as soon as possible and wherever feasible, include an assessment from
multiple sources of each employee's performance. Such sources shall
PAGE 5-HOUSE BILL 24-1467 include, where applicable, the employee's self-assessment; the employee's
superiors, subordinates, and peers; and any other applicable sources of an
employee's performance. The state personnel director shall adopt
procedures to establish a process to resolve employee disputes related to
performance evaluations that do not result in corrective or disciplinary
action against the employee. Each program established by a state
department or institution of higher education pursuant to this subparagraph
(IV) shall be SUBSECTION (1)(c)(IV) IS subject to the director's approval.
(c.5) (I) The state personnel director shall provide for the evaluation
of employee performance. Each employee shall be evaluated at least once
a year. The evaluation of performance shall be used as a factor in
compensation, promotions, demotions, removals, reduction of force, and all
other transactions as determined by the state personnel director in which
considerations of quality of service are properly a factor.
(II) A supervisor, including a supervisory state employee not within
the state personnel system, who does not evaluate subordinate employees
in the state personnel system as required by this paragraph (c.5) on at least
an annual basis shall be suspended from work without pay for a period of
not less than one workday. The provisions of this subparagraph (II) shall
only apply to supervisors who are state employees.
(c.7) In addition to the periodic salary increases authorized by
paragraph (c) of this subsection (1), the performance review component of
the merit pay system established pursuant to subparagraph (IV) of
paragraph (c) of this subsection (1) shall be used for the purpose of
determining eligibility for a performance-based award permitted pursuant
to section 24-38-103 (1.5). The award shall be in addition to any other
compensation authorized by law, and it shall not affect the compensation
that the employee is entitled to receive in subsequent years.
(j) (II) (A) The state employee reserve fund is hereby created in the
state treasury, which consists of money transferred pursuant to subsection
(1)(j)(IV) of this section. Money in the fund is continuously appropriated
for the purpose of providing merit pay to employees as
provided in this
subsection (1). No money from the fund shall be expended without the
approval of the director of the office of state planning and budgeting.
(4) Quadrennial compensation process. (a) The purpose of the
PAGE 6-HOUSE BILL 24-1467 quadrennial compensation process is to determine any necessary
adjustments to state employee salaries, state contributions for group benefit
plans, and merit
STEP pay. The quadrennial compensation survey, based on
an analysis of surveys by public or private organizations, including surveys
by the state personnel director, shall include a fair sample of public and
private sector employers and jobs, including areas outside the Denver
metropolitan area. In order to establish confidence in the selection of
surveys, the state personnel director shall meet and confer in good faith with
management and state employee representatives.
(b) (I) On October 1, 2025, and on October 1 of each fourth year
thereafter, the state personnel director shall prepare a quadrennial
compensation report based on the analysis of surveys conducted pursuant
to subsection (4)(a) of this section. The purpose of the quadrennial
compensation report shall be to reflect all adjustments necessary to maintain
the salary structure, state contributions for group benefit plans, and merit
STEP pay FOR THE UPCOMING FISCAL YEAR. The state personnel director shall
also include a detailed analysis of salary ranges for all employees in the
state personnel system and how employees' salaries are distributed within
these ranges. The state personnel director shall also publish the report.
Notwithstanding the requirement in section 24-1-136 (11)(a)(I), the
requirement to submit the report required in this subsection (4)(b)(I)
continues indefinitely. The state auditor is responsible for contracting with
a private firm to conduct a performance audit of the procedures and
application of data, including any survey conducted by the state personnel
director. Beginning January 1, 2005, through January 1, 2021, and
beginning on January 1, 2026, the audits shall be conducted every four
years. A report shall be submitted to the governor and the general assembly
by the December 30 immediately following the completion of the audit.
(c) By September 15, 2017, and by September 15 of each year
thereafter through September 15, 2021, and on or before October 1, 2022,
and on or before October 1 of each year thereafter, the state personnel
director shall submit recommendations and estimated costs for state
employee compensation for the next fiscal year, covering salaries, state
contributions for group benefit plans, and merit
STEP pay, to the governor
and the joint budget committee of the general assembly. The
recommendations shall reflect a consideration of the results of the
quadrennial compensation survey, fiscal constraints, the ability to recruit
and retain state employees, appropriate adjustments with respect to state
PAGE 7-HOUSE BILL 24-1467 employee compensation, and those costs resulting from implementation of
section 24-50-110 (1)(a). The recommendations for state contributions for
group benefit plans shall specify the annual group benefit plan year
established pursuant to section 24-50-604 (1)(m). The recommendations
submitted to the governor and the joint budget committee COMPENSATION
REPORT
shall include the results of the surveys of public or private
employers and jobs. The state personnel director shall also publish such
recommendations
REPORT. This subsection (4)(c) is exempt from the
provisions of section 24-1-136 (11), and the periodic reporting requirements
of this section are effective until changed by the general assembly acting by
bill.
(5) Pay plans. (d) In the medical pay plans, there are no
anniversary-based merit
STEP increases. The salaries in such pay plans are
based on the negotiation of an annual contract between the employee and
the department head or the state auditor, when appropriate, and the amount
of such salaries may increase, decrease, or remain unchanged from year to
year. Any employee dismissed for failure to perform under such contract
may only appeal directly to the state personnel board.
(e) In the pay plans for the senior executive service and those
positions specified in section 13 (2)(a)(XI) of article XII of the state
constitution, there are no anniversary-based merit
STEP increases. The
salaries in such pay plans are based on policies set forth by the state
personnel director. The amount of such salaries may increase, decrease, or
remain unchanged from year to year.
SECTION 3. In Colorado Revised Statutes, amend 8-47-205 as
follows:
8-47-205. Salaries of employees of division. All deputies,
statisticians, accountants, clerks, experts, and other employees of the
division shall receive such compensation as may be fixed by law. The
salaries so fixed shall be paid monthly
from the fund appropriated for the
use of the division after approval by the director.
SECTION 4. In Colorado Revised Statutes, 8-1-103, amend (2) as
follows:
8-1-103. Division of labor standards and statistics - director -
PAGE 8-HOUSE BILL 24-1467 employees - qualifications - compensation - expenses. (2) All employees,
except experts, shall have been for one year prior to such employment or
appointment bona fide residents of this state and, while in the employ of the
division, shall receive such compensation as is fixed by the state personnel
system laws of this state, such compensation to be paid monthly
from funds
appropriated for the use of the division. All expenses incurred by the
division and its employees pursuant to the provisions of law shall be paid
from funds appropriated for its use upon the approval of the director. The
traveling expenses of the director or of any employee of the division
incurred while on business of the division outside this state shall be paid in
the manner prescribed in this subsection (2), but only when such expenses
are authorized in advance.
SECTION 5. In Colorado Revised Statutes, 24-38-103, repeal (1.5)
as follows:
24-38-103. Agency authority and incentives for budget savings.
(1.5) Beginning with the 2004-05 fiscal year, an agency that achieves cost
savings, as an alternative to the transfer authorized pursuant to subsection
(1) of this section, may transfer fifty percent of the amount of the cost
savings from one item of appropriation made to the agency in the general
appropriation act or any supplemental appropriation act to the item for
personal services in the appropriation made to the same agency for the
purpose of paying performance-based awards to employees of the agency.
The award shall be awarded in the fiscal year in which the cost savings are
achieved. and shall be made consistent with the performance review done
in accordance with the merit pay system identified in section 24-50-104
(1)(c.7). Prior to the end of the state fiscal year in which a transfer is made
pursuant to this subsection (1.5), an agency shall submit written notice to
the joint budget committee, the office of state planning and budgeting, and
the state controller of the amount of the cost savings achieved by the agency
during the state fiscal year.
SECTION 6. In Colorado Revised Statutes, 24-50-109.5, amend
(2) as follows:
24-50-109.5. Fiscal emergencies - emergency orders. (2) With the
advice and assistance of the state personnel director, the governor shall take
such actions as necessary to be utilized by each principal department and
each institution of higher education, including the Auraria higher education
PAGE 9-HOUSE BILL 24-1467 center established in article 70 of title 23, C.R.S., to reduce state personnel
expenditures in the event of a fiscal emergency. Such actions shall include,
but need not be limited to, separations, voluntary furloughs, mandatory
furloughs, suspension of increases in salary and state contributions for
group benefit plans, suspension of merit
STEP pay, job-sharing, hiring
freezes, forced reallocation of vacant positions, or a combination thereof.
Any suspension of salary increases or increases in state contributions for
group benefit plans shall apply statewide to all employees in the state
personnel system. If mandatory furloughs are utilized in any principal
department or institution of higher education, including the Auraria higher
education center established in article 70 of title 23, C.R.S.,
such furloughs
shall be implemented by each appointing authority so that all employees
under such authority, regardless of status, position, or level of employment,
are furloughed for the same length of time, consistent with section 24-2-103
(2). Employees of the following agencies and employees with duties as
described shall not be subject to mandatory furlough: The Colorado state
patrol, correctional officers, police officers, employees of the department
of human services providing hands-on care, and employees providing
hands-on nursing care.
SECTION 7. In Colorado Revised Statutes, 24-50-110, amend (1)
introductory portion and (1)(b) as follows:
24-50-110. Budget control - personal services. (1) In order to
provide controls and proper identification of personal services costs
necessary to carry out the policy of the state regarding compensation of state
employees, the following administrative and fiscal procedures shall
apply:
(b) In their annual budget requests, the heads of all principal
departments of state government shall set forth separately the projected
costs of personal services arising from anticipated classification reviews,
promotions, and other increases in compensation or bonuses for employees
in their departments. The costs of personal services shall include any merit
STEP pay.
SECTION 8. In Colorado Revised Statutes, 24-75-112, amend (1)
introductory portion and (1)(b) as follows:
24-75-112. Annual general appropriation act - headnote
definitions - general provisions - footnotes. (1) As used in the annual
PAGE 10-HOUSE BILL 24-1467 general appropriation act, the following definitions and general provisions
shall apply for the headnote terms preceding and specifying the purpose of
certain line items of appropriation:
(b) "Centralized appropriation" means the appropriation of funds to
an executive director of a department or a central administrative program
intended for subsequent allocation and expenditure at and among a
department's divisions, programs, agencies, or long bill groups in order to
reflect the amount of such resources actually used in each program or
division. Such centralized appropriations may include salary survey, merit
STEP pay or anniversary increases, senior executive service, shift
differential, group health and life insurance, capital outlay, ADP capital
outlay, information technology asset maintenance, legal services, purchase
of services from computer center, multiuse network payments, vehicle lease
payments, leased space, financed purchase of an asset, certificate of
participation, payment to risk management and property funds, short-term
disability insurance, utilities, communications services payments,
amortization equalization disbursements, supplemental amortization
equalization disbursements, administrative law judge services, and
centralized ADP. As provided in subsection (1)(l) of this section, capital
outlay is included within the appropriation for "operating expenses".
SECTION 9. Safety clause. The general assembly finds,
determines, and declares that this act is necessary for the immediate
PAGE 11-HOUSE BILL 24-1467 preservation of the public peace, health, or safety or for appropriations for
the support and maintenance of the departments of the state and state
institutions.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 12-HOUSE BILL 24-1467