Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 12-0425.01 Gregg Fraser x4325 HOUSE BILL 12-1145 HOUSE SPONSORSHIP Bradford, SENATE SPONSORSHIP (None), House Committees Senate Committees Economic and Business Development A BILL FOR AN ACT Concerning the modification of state personnel total compensation policies. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill makes the following changes to the total compensation laws affecting state employees: A statutory provision specifying that state employees are typically hired at the minimum rate in a pay grade unless there is a showing of recruiting difficulty or other unusual condition is amended to specify that employees are typically hired at the mid rate. References to the "annual compensation report" and "annual compensation survey" are changed to the "total compensation report" and "total compensation survey". The total compensation report of the state personnel director is required to be published every 2 years instead of every year. A provision governing the manner in which holidays and paid leave are counted for certain employees performing essential services is repealed. The children of employees are considered dependents for group benefit purposes up to the age of 26, unless the United States supreme court finds the federal "Patient Protection and Affordable Care Act" to be unconstitutional, in which case the current statutory provisions defining children as dependents will be reinstated. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 24-50-104, amend (1) (e), (1) (f), (4) (a), (4) (b) (I), (4) (c), (5) (b), and (6) (a) as follows: 24-50-104. Job evaluation and compensation. (1) Total compensation philosophy. (e) The state personnel director shall sustain an employee's base salary in the event such employee's position is placed in a lower pay range due to an allocation of such employee's position, a system maintenance study of all positions in a class, a general job evaluation study of the state personnel system, or the annual total compensation survey for a period not to exceed three years from the effective date of such placement. (f) Initial hiring shall typically be at the minimum mid rate in the pay grade. On a showing of recruiting difficulty or other unusual condition, the appointing authority may authorize the appointment of a person at a higher base salary within the pay grade. (4) Total compensation process. (a) The purpose of the annual total compensation process is to determine any necessary adjustments to state employee salaries, state contributions for group benefit plans, and performance awards. The annual total 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) The state personnel director shall prepare an annual a total compensation report based on the analysis of surveys conducted pursuant to paragraph (a) of this subsection (4). The purpose of the annual total compensation report shall be to reflect all adjustments necessary to maintain the salary structure, state contributions for group benefit plans, and performance awards for the upcoming fiscal year. 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, 2003, such audits shall be conducted every two years, and beginning January 1, 2005, the audits shall be conducted every four years. A report shall be submitted to the governor and the general assembly by the June 30 immediately following the completion of the audit. (c) By August 1, 2003, and by August 1 of each year thereafter, the state personnel director shall submit the annual total compensation report and recommendations and estimated costs for state employee compensation for the next fiscal year covering salaries, state contributions for group benefit plans, and performance awards, to the governor and the joint budget committee of the general assembly. The recommendations shall reflect a consideration of the results of the annual total compensation survey, fiscal constraints, the ability to recruit and retain state employees, appropriate adjustments with respect to state 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 annual total compensation report shall include the results of the surveys of public or private employers and jobs for prevailing total compensation and the reasons for any deviation from prevailing total compensation in the recommendations submitted to the governor and the joint budget committee. By August 1, 2012, and by August 1 of each even-numbered year thereafter, the state personnel director shall also publish such the total compensation report. (5) Pay plans. (b) No employee in any pay plan may exceed an established maximum salary amount for such plan, except as provided in paragraph (e) of subsection (1) of this section. The maximum monthly salary for any employee whose position is assigned to a nonmedical pay plan in effect prior to July 1, 1991, shall be calculated based on the 1991 maximum of five thousand seven hundred ninety-four dollars, plus the subsequent adjustments made under this paragraph (b) since July 1, 1991; except that classes in the medical pay plan requiring licensure as a physician or dentist shall be subject to a maximum monthly salary calculated on the basis of the 1991 maximum of seven thousand eight hundred twelve dollars, plus the subsequent adjustments made under this paragraph (b) since July 1, 1991. Effective July 1, 2010, the maximum monthly salary in the medical pay plan shall be seventeen thousand nine hundred twenty-seven dollars, plus any subsequent adjustments made under this paragraph (b). Such amounts shall be adjusted by the state personnel director in accordance with the change in the employment cost index for the preceding calendar year or the percentage increase in state general fund appropriations in relation to such appropriations for the preceding fiscal year, whichever is greater. In no event shall such amounts exceed the maximum found in the market as determined by the annual total compensation survey. The maximum monthly salary for the senior executive service plan shall not exceed the maximum monthly salary of any nonmedical pay plan by more than twenty-five percent. (6) Job evaluation. (a) System maintenance studies involving the assignment of classes to increased pay grades shall be incorporated into the annual total compensation request reported to the general assembly and shall be effective on July 1 of each year unless otherwise ordered by the governor acting pursuant to section 24-50-109.5. SECTION 2. In Colorado Revised Statutes, 24-50-104.5, amend (1) as follows: 24-50-104.5. Compliance with federal laws. (1) The state personnel director shall establish the general criteria and processes necessary for the state personnel system to fully comply with all applicable federal employment laws. Holidays and periods of authorized paid leave falling within a regularly scheduled workweek shall be counted as work time in determining overtime for employees performing essential law enforcement, highway maintenance, and other support services directly necessary for the health, safety, and welfare of patients, residents, and inmates of state institutions or state facilities. SECTION 3. In Colorado Revised Statutes, 24-50-603, amend (5) (a); and add (5) (a.5) as follows: 24-50-603. Definitions. As used in this part 6, unless the context otherwise requires: (5) "Dependent" means: (a) (I) An employee's legal spouse; (II) Each unmarried child of an employee's children, including adopted children, stepchildren, and foster children, through the end of the month in which the child turns nineteen twenty-six years of age; for whom the employee is the major source of financial support or for whom the employee is directed by court order to provide coverage; each unmarried child nineteen years of age, through the end of the month in which that child is no longer a full-time student in an educational or vocational institution, but no longer than through the end of the month in which the full-time student turns twenty-four years of age, and for whom the employee is the major source of financial support or for whom the employee is directed by court order to provide coverage; or (III) An employee's unmarried child of any age who has either a physical or mental disability, as defined by the carrier, not covered under other government programs, and for whom the employee is the major source of financial support or for whom the employee is directed by court order to provide coverage; (a.5) Notwithstanding the provisions of subparagraph (II) of paragraph (a) of this subsection (5), if the director sends notice to the revisor of statutes that the provisions of the federal "Patient Protection and Affordable Care Act", Pub.L. 111-148, allowing individuals to remain on their parents' health care plan until the individual turns twenty-six years of age have been found unconstitutional or otherwise unenforceable by the United States supreme court, then "dependent", for purposes of said subparagraph (II), shall mean each of an employee's unmarried children, including adopted children, stepchildren, and foster children, through the end of the month in which the child turns nineteen years of age, for whom the employee is the major source of financial support or for whom the employee is directed by court order to provide coverage and each of an employee's unmarried children nineteen years of age, through the end of the month in which that child is no longer a full-time student in an educational or vocational institution, but no longer than through the end of the month in which the full-time student turns twenty-four years of age, and for whom the employee is the major source of financial support or for whom the employee is directed by court order to provide coverage. SECTION 4. In Colorado Revised Statutes, 24-50-604, amend (3) as follows: 24-50-604. Powers and duties of the director. (3) The director shall have the authority to adopt procedures to determine benefit eligibility requirements and the percentage of the state contribution to health benefits for all employees, as defined in section 24-50-603 (7), who work less than full time, are governed by the rules established pursuant to subsection (2) of this section, and are hired on or after January 1, 2005. The director shall include any proposed changes to the group benefits policy in the annual total compensation report and recommendations submitted to the governor and the joint budget committee of the general assembly pursuant to section 24-50-104 (4) (c). SECTION 5. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 8, 2012, if adjournment sine die is on May 9, 2012); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2012 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.