TITLE: CONCERNING THE ESTABLISHMENT OF PARAMETERS FOR COLORADO MINIMUM FAIR WAGES.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues General Fund
State Expenditures General Fund Cash Fund Cash Fund Exempt	$1,769,664 $577,363 $5,914	$1,767,484 $577,363 $5,914
FTE Position Change	0.5 FTE	0.5 FTE
Other State Impact: None
Effective Date: July 1, 1999
Appropriation Summary for FY 1999-2000:General FundCash FundCash Fund Exempt Department of Labor and Employment:$29,846 Department of Natural Resources:$563$22,810$5,914 Department of Higher Education:$1,681,780$420,445 Department of Personnel:$57,475$134,108 Total$1,769,664$577,363$5,914
Local Government Impact: None

The provisions of this bill creates the “Colorado Minimum Fair Wages Act”. It prohibits employers from employing workers for an oppressive and unreasonable wage and requires the Director of the Department of Labor and Employment to investigate if there is a reason to believe a substantial number of employees are being paid an oppressive and unreasonable wage. It authorizes the director to determine what an oppressive and unreasonable wage is for an occupation.

It establishes the minimum fair wage rate at $6.50 per hour beginning July 1, 1999. Beginning July 1, 2,000, the bill provides that the minimum fair wage rate be adjusted annually to establish a minimum fair wage of not less than the changes in the consumer price index. It allows the director to establish a lower minimum fair wage rate for minors and occupations declared exempt by the director, including professional service, agricultural and farm work, or work in which an employee receives compensation other than wages.

The increase in the minimum wage would have a significant impact on state agencies which employ persons covered by the minimum wage rate at a rate less than the minimum rates contained in the bill. The following programs would be impacted.

FISCAL IMPACT OF INCREASING COVERED STATE EMPLOYEES’ WAGES
EMPLOYEE CLASSIFICATIONS IMPACTED	FY 1999/00	FY 2000/01
Miscellaneous State Employees:(30/70 GF/CF)	$191,583	$191,583
Work-Study Students: (80/20 GF/CF)
State Bd. of Agriculture	266,423	266,423
U. Northern Colorado	254,210	254,210
State Colleges	761,648	761,648
Community Colleges	401,153	401,153
Colorado School of Mines	54,450	54,450
Area Vocational Schools	148,095	148,095
Private Schools	216,248	216,248
Seasonal Employees:
Department of Natural Resources (GF, CF, CFE)	29,286	29,286
TOTAL	$2,323,096	$2,323,096

The change which adds oppressive and unreasonable wages to the criteria which the director is required to investigate could result in additional requests being submitted to the director for investigation. There have not been any requests for several years under the current provisions. However, it is believed that this change in wage criteria will broaden the scope of current investigations to include the gathering of data beyond the employer’s workplace. The change in wage criteria will not result in any significant increase in the number of requests; however, it will increase the complexity of those currently being conducted. The director will be required to determine what occupations, if any, will be exempt from the Colorado minimum fair wage. It is estimated that the division will require an additional 0.5 FTE and $29,846 General Fund appropriation in FY 1999/00 and $27,666 in FY 2000/01 to implement the provisions of the bill, as detailed in Table 1.

To the extent that local governments employ persons covered under the minimum wage rate provisions, the personal services costs for these employees would increase. The amount of the increase cannot be accurately estimated at this time.

The fiscal note implies that the Department of Labor and Employment should be appropriated $29,846 and 0.5 FTE out of the General Fund in FY 1999/00. Out of this amount, the Department of Law will require $514 CFE. In addition, the Department of Natural Resources should be appropriated $563 GF, $22,810 CF, and $5,914 CFE; the Department of Higher Education should be appropriated $1,681,780 GF and $420,445 CF; and the Department of Personnel should be appropriated $57,475 GF and $134,108 CF to be allocated to state agencies whose employees earn less than the $6.50 minimum wage.

Table 1. Required Expenditures of the Department of Labor and Employment
	FY 1999-2000	FY 2000/2001
Personal Services	$19,683	$19,683
Operating Expenses	7,599	7,469
Legal Expenses: 10 hours/year	514	514
Non-recurring Expenses	2,050
Total Expenses	$29,846	$27,666