(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, 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. 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 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. 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) When 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. (III) (A) The methodologies used for purposes of determining and maintaining compensation for state law enforcement officers employed by the Colorado state patrol shall be the same as the methodologies established pursuant to subsection (1)(a)(II) of this section; except that the amount of salary shall be at least ninety-nine percent of the actual average salary provided to the top three law enforcement agencies within the state that have both more than one hundred commissioned officers and the highest actual average salary. (B) As used in this subparagraph (III), "state law enforcement officer" means the chief and any commissioned or noncommissioned officer and trooper of the Colorado state patrol. (b) The state personnel director shall use a systematic approach to objectively determine classes of positions and the uniform alignment of classes and occupational groups for all jobs in the state personnel system. The state personnel director shall conduct timely, ongoing, and technically sound evaluation and analyses of jobs in order to group similar duties and responsibilities into clearly distinguished classes and occupational groups that relate to the compensation structure through the assignment of appropriate pay grades. If the state personnel director proposes or the department of personnel recommends any changes to classes or occupational groups or to the pay grades for such classes or groups as a result of the evaluation and analyses required under this paragraph (b), the director shall notify all affected employees and employee organizations of such changes. Upon request of any affected employee or employee organization, the state personnel director shall meet and confer in good faith with such employee or organization regarding the proposed or recommended changes prior to finalizing and implementing any such change. (c) (I) The state personnel director shall establish a 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 step pay system is to provide salary increases for employees based on salary placement within the appropriate salary range. (A) to (E) (Deleted by amendment, L. 2024). (I.1) to (I.9) Repealed. (II) In addition to any other requirements set forth in this subsection (1)(c)(II), the department of personnel shall develop the step pay system so that it: (A) Is simple and understandable to employees in the state personnel system; (B) (Deleted by amendment, L. 2003, p. 1931, § 5, effective May 22, 2003.) (C) Is developed with input from employees in the state personnel system, managers, and other affected parties; and (D) to (G) Repealed. (H) Minimizes employee pay disruptions resulting from implementation or modification of step pay. (III) (Deleted by amendment, L. 2003, p. 1931, § 5, effective May 22, 2003.) (IV) 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 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 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. (II) Repealed. (III) The head of each principal department and each state-supported institution of higher education, respectively, shall determine annually on May 1 whether each supervisor in the department or institution has completed the mandatory performance evaluation required for each employee in the state personnel system during the preceding twelve months. If any evaluations have still not been completed by July 1, the supervisor may be subject to demotion. If a supervisor has not timely completed annual performance evaluations for two consecutive years, the supervisor shall be demoted to a nonsupervisory position. (IV) The state personnel director shall adopt procedures for the implementation of the provisions of this paragraph (c.5). Nothing in this paragraph (c.5) shall be construed to limit the ability of the state personnel director to provide for additional sanctions for noncompliance with the provisions of this paragraph (c.5). (V) Repealed. (c.7) Repealed. (d) (Deleted by amendment, L. 2000, p. 1117, § 1, effective May 26, 2000.) (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 quadrennial 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 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. (g) Benefits shall include insurance, retirement, and leaves of absence with or without pay and may include jury duty, military duty, or educational leaves. The state personnel director shall prescribe procedures for the types, amounts, and conditions for all leave benefits, subject to the provisions governing the benefits provided in subsection (7) of this section. The general assembly shall approve any changes to leave benefits granted by statute before such changes are implemented. The state personnel director shall prescribe by procedure any nonstatutory benefits. (h) The state personnel director may, following consultation with the state auditor and consistent with article III and sections 13, 14, and 15 of article XII of the state constitution, establish special procedures for classifying those employees of the state auditor's office who are within the state personnel system in order to take into consideration the special situations, circumstances, and duties unique to such employees. Such special procedures shall incorporate the directives, requirements, and elements of sections 13, 14, and 15 of article XII of the state constitution, including, but not limited to, the grading and compensation of persons in the state personnel system according to standards of efficient service that are the same for all persons having like duties. (i) (Deleted by amendment, L. 2003, p. 1926, § 1, effective May 22, 2003.) (j) (I) As used in this paragraph (j), unless the context otherwise requires: (A) "Department" means a principal department of the executive branch of state government specified in section 24-1-110. (B) "Eligible department" means a department that received an appropriation for which there is a reversion amount. (C) "Fund" means the state employee reserve fund created in subparagraph (II) of this paragraph (j). (D) "Personal services-related line item" means a line item entitled "personal services", "group health, life, and dental insurance", "short-term disability insurance", "amortization equalization disbursements", "supplemental amortization equalization disbursements", "salary survey", or "shift differential". (E) "Qualifying cash fund" means a cash fund for which there is express authorization for a reversion pursuant to this paragraph (j) from the cash fund to the state employee reserve fund. (F) "Reversion amount" means the final, adjusted amount of state moneys appropriated from the general fund or a qualifying cash fund for a state fiscal year in a personal services- related line item, a line item entitled "operating expenses", or any successor line item designated by the joint budget committee for the same purposes in the annual general appropriation act to a department that is unexpended and unencumbered as of the date the state controller publishes the comprehensive annual financial report of the state for the state fiscal year. The joint budget committee shall notify the state controller and state treasurer of a successor line item from which there may be a reversion amount. There is no "reversion amount" related to any line item that moneys are transferred from or to pursuant to section 24-75-108. (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 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. (B) Repealed. (III) (A) Any money in the fund not expended as provided in subsection (1)(j)(II) of this section may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of money in the fund shall be credited to the fund. Except as set forth in subsection (1)(j)(III)(B) of this section, any unexpended and unencumbered money remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund. (B) On July 1, 2017, the state treasurer shall transfer twenty-six million three hundred thousand dollars from the fund to the general fund. (C) On July 1, 2019, the state treasurer shall transfer twenty-three million dollars from the fund to the general fund. (D) Repealed. (E) On June 30, 2020, the state treasurer shall transfer the unexpended and unencumbered balance from the fund to the general fund. (F) On July 1, 2023, the state treasurer shall transfer four million nine hundred thirteen thousand seven hundred fifty-three dollars from the fund to the general fund. (G) On June 30, 2024, the state treasurer shall transfer thirty-one million one hundred sixty thousand dollars from the fund to the general fund. (IV) On the date the state controller publishes the comprehensive annual financial report of the state, the state controller and state treasurer shall transfer an amount of money equal to a reversion amount from the general fund or a qualifying cash fund to the state employee reserve fund. (V) Notwithstanding any provision of this section to the contrary, the state treasurer shall not transfer any moneys from a qualifying fund if: (A) The reversion is required pursuant to section 24-37.5-112 (2); or (B) There are insufficient moneys in the fund for the full transfer. In such case, the state treasurer shall transfer as much as is available. (VI) Repealed. (k) Repealed. (2) Records. To facilitate the reporting of estimated costs required of the state personnel director pursuant to paragraph (c) of subsection (4) of this section, the records of all positions in the state personnel system shall be current and included in the state personnel data system by January 1 of each year. (3) Repealed. (4) Quadrennial compensation process. (a) The purpose of the quadrennial compensation process is to determine any necessary adjustments to state employee salaries, state contributions for group benefit plans, and 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 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. (II) Repealed. (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 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 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 compensation report shall include the results of the surveys of public or private employers and jobs. The state personnel director shall also publish such 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. (d) (I) For fiscal years commencing prior to the 2003-04 fiscal year and after the 2003- 04 fiscal year, the recommended changes to salaries and any adjustments to the recommended changes made by the general assembly in the annual general appropriation act shall be effective on July 1 of the ensuing fiscal year unless the general assembly, acting by bill, establishes a different effective date for that fiscal year or the governor orders otherwise pursuant to section 24-50-109.5 and such order is adopted by the general assembly through a joint resolution declaring a fiscal emergency and approved by the governor in accordance with section 39 of article V of the Colorado constitution. (II) For the 2003-04 and 2004-05 budget years, to the extent such changes are funded, the recommended changes in state contributions for group benefit plans and any adjustments to the recommended changes made by the general assembly in the annual general appropriation act for the next fiscal year shall be effective January 1 of the next fiscal year. For the 2005-06 fiscal year and each fiscal year thereafter, to the extent such changes are funded, the recommended changes in state contributions for group benefit plans and any adjustments to the recommended changes made by the general assembly in the annual general appropriation act for the next fiscal year shall be effective on the first day of the annual group benefit plan year established pursuant to section 24-50-604 (1)(m). (III) (Deleted by amendment, L. 2006, p. 543, § 1, effective July 1, 2006.) (IV) (Deleted by amendment, L. 2010, (HB 10-1181), ch. 351, p. 1624, § 13, effective June 7, 2010.) (e) (Deleted by amendment, L. 2006, p. 543, § 1, effective July 1, 2006.) (f) Any moneys appropriated pursuant to this subsection (4) shall not be used to achieve parity for employees outside the state personnel system. (5) Pay plans. (a) The state personnel director shall establish pay plans as technically and professionally necessary and shall establish any procedures and directives required to implement the state's innovative total compensation philosophy as defined in subsection (1) of this section. (b) No employee in any pay plan may exceed an established maximum salary amount for such plan, except as provided in subsection (1)(e) 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 subsection (5)(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 subsection (5)(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 subsection (5)(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 recommendations submitted by the state personnel director. 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. (c) The state personnel director shall establish criteria for inclusion in the senior executive service and shall review each nominated position before it is placed in the pay plan for the senior executive service. The head of the department or agency or state auditor for employees of the state auditor's office shall make appointments to the senior executive service based on competitive selection and is responsible for the management of the employees in such plan. Any person in the senior executive service has no right to any position within the state. (d) In the medical pay plans, there are no anniversary-based 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 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. (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. (b) (I) The state personnel director shall allocate individual positions to the proper classes based on an objective evaluation of the job assignment. (II) Any employee directly affected by the allocation of the employee's position to a class in a lower pay grade under subparagraph (I) of this paragraph (b) may file a written appeal with the state personnel director within ten days after receiving the notice of allocation of positions. The state personnel director, or the director's designee, shall review the appeal in summary fashion on the basis of written material that may be supplemented by oral argument at the sole discretion of the director or designee. At the director's discretion, an advisory panel of qualified job evaluators may be convened to assist the director in making a decision. Except as otherwise provided in subparagraph (III) of this paragraph (b), the director shall issue a written decision within ninety calendar days after the receipt of a timely appeal. If the director does not issue a decision within ninety calendar days after receipt of a timely appeal, the original allocation decision shall be final. An allocation decision may be overturned only if the director finds it to have been arbitrary, capricious, or contrary to rule or law. The state personnel director shall establish a process for timely resolving appeals within the ninety-day period and the criteria for selection of and method of service upon an advisory panel. Any decision shall be subject to judicial review pursuant to section 24-4-106. (III) When an employee who has filed an appeal with the state personnel director pursuant to subparagraph (II) of this paragraph (b) also files an appeal with the state personnel board pursuant to section 24-50-123 or the Colorado civil rights division pursuant to section 24- 50-125.3, the ninety-day period specified in subparagraph (II) of this paragraph (b) shall be tolled until there is a final agency action by the board only if the appeal filed with the board or the civil rights division arises out of the same incident as the appeal filed with the director, is filed before the expiration of the ninety-day period, and is filed before the director has issued a written decision. (7) Leaves. (a) No employee shall earn more than ten days of sick leave per fiscal year. No employee may retain accumulated sick leave in excess of forty-five days at the end of any fiscal year; except that any employee who had accumulated sick leave prior to July 1, 1988, shall retain such leave and may accumulate a maximum of forty-five additional days. Any excess accumulation may be converted to annual leave at the rate of five days of sick leave to one day of annual leave up to a total of two days per fiscal year. A medical certificate form from a health-care provider shall be required for absences of more than three full consecutive working days, or the use of sick leave shall be denied. (b) The procedures of the state personnel director shall provide that no more than two days of paid leave per fiscal year shall be granted for organ, tissue, or bone marrow donation for transplants. Such leave may not be accumulated. (c) The state personnel director may establish procedures to allow the transfer of annual leave between employees when one employee, or an immediate family member of the employee, experiences an unforeseeable life-altering event beyond the employee's control. The recipient of any annual leave shall have a minimum of one year of state service and exhausted all applicable paid leave, including any compensatory time. (d) An employee certified as a disaster service volunteer of the American red cross may be granted paid leave for specialized disaster relief services. Such leave shall not exceed five days for a local disaster or fifteen days for a national disaster in a twelve-month period. Such leave may not be accumulated. During this period of leave, an employee shall not be deemed to be an employee for purposes of the "Workers' Compensation Act of Colorado", as provided in articles 40 to 47 of title 8, C.R.S. The leave authorized by this paragraph (d) shall run concurrent with and shall not be in addition to any paid leave of absence required by law for service by a member in a Colorado civil air patrol mission as provided in section 28-1-104, C.R.S., or for qualified volunteer service in a disaster as provided in section 24-33.5-825. (7.5) Repealed. (8) Payroll. (a) Salaries paid on a monthly basis shall be paid as of the last working day of the month; except that: (I) Salaries for the month of June shall be paid on the first working day of July; and (II) For state personnel employees in the department of transportation hired before August 5, 1998, as amended, salaries for the month of December shall be paid on the first working day in January, unless any such employee informs the controller of the department of transportation of the employee's desire to be paid in the same manner as other employees in the state personnel system as provided in this subsection (8), in which case, the employee shall be paid in such manner. (a.5) Salaries paid on a monthly basis for the month of June shall be paid on the first working day of July. This subsection (8)(a.5) does not apply to institutions of higher education. (a.6) For state employment positions that are not otherwise covered by subsection (8)(a) of this section, whether or not the positions are in the state personnel system: (I) and (II) (Deleted by amendment, L. 2015.) (III) Salaries paid on a biweekly basis shall be paid fourteen days after the last day of the fourteen-day pay period. (b) and (c) Repealed. (d) Monthly salaries shall be converted to annual salary as the basis for calculating amounts due for periods other than monthly. (e) The state personnel director or the director's designee shall regulate, approve, and review all payroll deductions other than those expressly authorized by statute or state-sponsored for all state employees. The state personnel director may assess a charge to the organization that receives the benefit from such a payroll deduction to offset the cost to the state for this service. (f) No payroll deduction shall be made on behalf of a state employee without prior written authorization from the state personnel director or the director's designee. The state personnel director or the director's designee may authorize a payroll deduction only after receiving a written request for such payroll deduction from the employee, a department or agency representative, or an organization. (g) Repealed. (9) Liability. (a) Except for gross negligence or fraud, no state employee responsible for calculating pay shall be in any manner liable for overpayment or underpayment of salaries. (b) No employee whose salary may be increased by an allocation of the employee's position to a class in a higher pay grade shall have any claim against the state unless the final allocation decision is made effective more than one year from the time the written allocation request was received by the appropriate personnel office. In such case, the employee is entitled to the difference between the salary of the old grade and the new salary for such period over twelve months. (10) Total compensation study including retirement benefits. (a) By January 15, 2015, by October 1, 2025, and by October 1 every fourth year thereafter, the state personnel director shall submit to the governor and the joint budget committee, along with the quadrennial compensation report required pursuant to subsection (4)(b) of this section, an addendum with a total compensation study that includes retirement benefits. Notwithstanding the requirement in section 24-1-136 (11)(a)(I), the requirement to submit the addendum required in this subsection (10) continues indefinitely. (b) The state personnel director shall contract with a third-party compensation consulting firm with actuarial expertise and national standing to perform the total compensation study that includes retirement benefits required pursuant to paragraph (a) of this subsection (10). The study must compare total and component costs and values of the state's total compensation against similar workforce structures, including private companies and other states. (c) For purposes of the addendum to the quadrennial compensation report required pursuant to this subsection (10), the public employees' retirement association created in article 51 of this title 24 shall provide access to official association member information and data under a confidentiality agreement with the third-party compensation consulting firm. (d) The state personnel director shall notify the joint budget committee of the general assembly if he or she determines that the amount appropriated by the general assembly for the purpose of the study required pursuant to this subsection (10) is insufficient to procure a vendor to complete the scope of the work required. (11) Repealed.
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