Colorado Capitol Report

House Gives Final OK to Bill to Allow Local Governments to Set Minimum Wages; Resolution to Allow Voters to Increase State Minimum Wage Dies

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State Policy News

House Gives Final OK to Bill to Allow Local Governments to Set Minimum Wages; Resolution to Allow Voters to Increase State Minimum Wage Dies

On Tuesday, the Democratic-controlled House on a party-line, 34-30 vote, sent HB-1300 to the Republican-controlled Senate.  The bill would allow local governments to increase the minimum wages in their jurisdictions above that of the State, which now is $8.23 per hour.

Immediately following the HB-1300 vote, House Concurrent Resolution (HCR) 1001, which would have referred to the voters this November a referendum to increase the state minimum wage in four steps to $12.50 by 2020, died on a 33-31 vote.

A joint concurrent resolution, to be placed on the ballot as a referendum, needs a “constitutional majority” two-thirds vote in the House and in the Senate.  To pass the House, therefore, a resolution needs 44 affirmative votes of the 65-member chamber.  A governor cannot veto a joint concurrent resolution creating a ballot referendum.

One Democratic Representative voted for HB-1300 but then voted against HCR-1001: Lois Court (Denver), who has sponsored proposals to make it harder to qualify ballot initiatives.  Representative Kevin Priola (R-Henderson) was excused.

The House prime co-sponsors of HB-1300 are Representatives Dominick Moreno (D-Commerce City) and Javon Melton (D-Aurora).  They also were the prime  co-sponsors of HCR-1001.

In the Senate, the Republican leadership has not yet assigned HB-1300 to a committee.  The Senate sponsor is Senator Mike Merrifield (D-Colorado Springs).

A week ago today, CACI emailed its members a Grassroots Alert to encourage them to contact their House representatives and urge them to vote against the two proposals.

The effort in Colorado represented by HB-1300 and HCR-1001 is part of a nationwide initiative to persuade legislatures, voters and local governments to increase the minimum wage.  Although President Obama has advocated for an increase in the Federal minimum wage, the Republican-controlled U.S. House of Representatives has shown little interest in the idea.

The two measures, HB-1300 and HCR-1001, were introduced into the House on March 19th and then fast-tracked by Democratic House Speaker Dickey Lee Hullinghorst (D-Boulder) for hearings only two legislative days later on Monday, March 23rd.

HB-1300

HB-1300, would allow a local government to set the minimum wage within its jurisdiction.  This proposal would eliminate current law, enacted in 1999, that says local governments cannot do this.

House Third Reading Debate on HB-1300 and HCR-1001

Representative Moreno said that the Colorado minimum wage of $8.23 is not a “living wage” and not even a “minimum wage” but that it is a “starvation wage.”  Workers earning the minimum wage cannot afford housing, food and transportation.  He said that such state and Federal governmental programs as Medicaid, food stamps and housing and energy assistance “have become taxpayer subsidies for employers who don’t pay their workers enough to live on.”

House Minority Leader DelGrosso said that, if HCR-1001 were to be approved by the voters in November, then the minimum wage would increase 52 percent from its current level of $8.23 per hour to $12.50 an hour by 2020.  For many small businesses, labor and payroll taxes account for about 50 percent of costs, he said.  “Businesses can’t absorb” such an increase, he said.  The proposal would have “unintended consequences” for businesses and the state’s economy, he said, and many workers would face higher prices for the necessities of life, such as day care, restaurant meals, home health care, etc.  Workers will see their hours reduced or be laid off, he predicted.

Representative Del Grosso also objected to HCR-1001 because it would be an amendment to the Colorado Constitution, which “is not the right thing to do.”  Such a measure does not belong in the Constitution, he said, because, once it’s in the Constitution, “there’s no going back.”

House Second Reading Debate on HB-1300 and HCR-1001

On Monday, the House debated the two measures at length on Second Reading.  Republican Representatives who spoke against the two proposals included House Minority Leader Brian DelGrosso (Loveland), Dan Thurlow (Grand Junction), Perry Buck (Windsor) and Kevin Priola (Henderson) as well as the following:

  • Tim Neville (Littleton), who said the best “local decisions” were the ones made between an employer and its workers.
  • Stephen Humphrey (Severance), who said the two proposals get “in the middle” of the worker’s and employer’s freedom to contract.
  • Jack Tate (Centennial), who said HB-1300 would force businesses to raise prices higher than their competitors in neighboring jurisdictions that don’t increase the minimum wage.
  • Kim Ransom (Littleton), who said the minimum wage was never intended to be a “living wage” as Democrats propose but instead it was meant to be an entry-level wage for teenagers new to the labor market.
  • Lori Saine (Dacono), who said raising the minimum wage will cause workers earning higher wages to then demand increases, which could then force some to go out of business.
  • Polly Lawrence (Littleton), who said HB-1300 would cause a “nightmare” for companies, such as construction firms, operating in multiple jurisdictions across the state.

House State, Veterans and Military Affairs Committee

On Monday, March 23rd,  the State, Veterans and Military Affairs Committee approved HB-1300 on a party-line, 6-5 vote.  The CACI Employment and Labor Committee early in the day agreed via email to oppose the measure.

HB-1300 presents the business community, especially such companies that have operations in multiple jurisdictions as restaurants and retail stores, with an administrative headache, in addition to increasing labor costs for businesses in those jurisdictions.

Representative Moreno told the Committee that “people who work in an area should be able to live in that area.”  In other words, the implication of Representative Moreno’s comment is that low-wage workers in, say, a resort area like Aspen, should be able to earn enough to live in Aspen if the city government or the city’s voters will only increase the minimum wage

Representative Melton then told the Committee that the bill would “bring local control” over the minimum wage instead of placing it with the State, as it now is.  Allowing local control over the minimum wage will allow local governments to deal with the ”varying costs” of living that their low-income workers face, he said.

CACI Board member Mark Moses, Joint Venture Partner, Outback Steakhouses, testified before the Committee in opposition to both HB-1300 and the second measure (see below).  If Colorado’s minimum wage is increased to $12.50 per hour (see HJR-1001 below), Moses said, then each of his restaurants would have to generate an additional $3.1 million in sales to maintain the company’s goal of 8.5 percent net profit.  That could lead to reductions in staff and the closing of stores, he said.

Another CACI member testified against the bill: Sonia Riggs, President and CEO of the Colorado Restaurant Association.  Restaurants have profit margins of 3 percent to 5 percent, she said, and the effect of increasing the minimum wage could cause them to raise prices and reduce hours for workers and the number of workers.

The fiscal note for HB-1300 simply states that “Requiring business to pay more to individuals changes the business’ costs and investments, impacting the amount of sales and income tax paid.”

HCR-1001

HCR-1001 would have allowed the voters to decide on a statewide ballot measure this November 8th to increase the state minimum wage each year in four steps and then by the rate of inflation (Consumer Price Index) each year after the fourth year.

The House State, Veterans and Military Affairs Committee approved, by an identical, party-line vote, HCR-1001, which would have put a referendum before the voters to increase the state’s minimum wage to:

  • $9.50 on January 1, 2017;
  • $10.50 on January 1, 2018;
  • $11.50 on January 1, 2019; and
  • $12.50 on January 1, 2020.

The current state minimum wage is $8.23 per hour (see below).

HCR-1001 also stated that “No more than $3.02 per hour in tip income may be used to offset the minimum wage of employees who regularly received tips.”  This is the same provision that is in the State Constitution (see below).

The fiscal note for HCR-1001 pointed out that it did not “. . . estimate the change in the minimum wage on the economy, nor its impact on tax collections, because any estimate would rely on a broad set of assumptions related to how the wages would flow through the economy and the overall impact to employers.”

Amendment 42 (2006)

In 2006, the state’s voters approved Amendment 42, a ballot initiative that amended Article XVII of the Colorado Constitution to increase the state minimum wage from $5.15 per hour to $6.85 per hour and then to increase it annually by the rate of inflation.  The measure was approved by 53.3 percent of the voters.

The current minimum wage is $8.23 an hour this year, effective January 1, 2015.  The Colorado Department of Labor and Employment (CDLE) is charged with annually adjusting the state minimum wage.

In 2006, the AFL-CIO pushed ballot initiatives to increase the minimum wage at the state level across the country in an explicit effort to increase Democratic voter turnout, according to a story broadcast by National Public Radio at the time.

The rally to support HB-1300 and HJR-1001 on the West Steps of the State Capitol on the day of the Committee hearing featured people holding signs that said “Raising Wages Works” with “AFL-CIO” at the bottom of the signs.  If the two proposals die, then CACI members should not be surprised if the Colorado AFL-CIO and its allies puss a ballot measure in 2016.

More information

For information on HB-1300, contact Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.

For news media coverage of the two proposals and additional information about the minimum wage, read:

“Colorado minimum-wage ballot bill dies, local control advances,” by Joey Bunch, The Denver Post, March 31st.

“Colorado House passes one minimum-wage measure, defeats another,” by Ed Sealover, The Denver Business Journal, March 31st.

“Colorado Democrats advance minimum wage measures,” The Associated Press, The Denver Post, March 30th.

“House approves minimum wage bills,” by Peter Marcus, The Durango Herald, March 30th.

“Wage Battle Begins,” by Marianne Goodland, The Colorado Statesman, March 27th.

“The Unappetizing Effect of Minimum Wage Hikes,” by Michael Saltsman, The Wall Street Journal, March 25th.

“Efforts to raise minimum wage in Colorado get initial legislative OK,” by Ed Sealover, The Denver Business Journal, March 24th.

“Colorado lawmakers begin debate for a $12.50 minimum wage by 2020,” by Joey Bunch, The Denver Post, March 23rd.

“20 states just raised the minimum wage.  It wasn’t enough,” by Danielle Paquette, The Washington Post, January 5th.

“More States Raise Minimum Wage, But Debate Continues,” by Yuki Noguchi, National Public Radio, January 1st.

“The early results from America’s experiments with higher minimum wages,” by Danielle Paquette, The Washington Post, August 4, 2014.

“Santa Fe hiked worker pay.  What happened next . . .  is unclear,” by Tina Griego, The Washington Post, August 14, 2014.

“The Effects of a Minimum Wage Increase on Employment and Family Income,” Congressional Budget Office, February 18, 2014.

Senate Approves 2015-2016 Budget

The “Long Appropriations Bill,” SB-234, occupied the Senate this week with long hours Wednesday and yesterday punctuated by fractious debate between the majority Republicans and the minority Democrats.

When the smoke settled yesterday, the Senate approved the Long Bill on a 21-14 vote with three Democrats joining the 18 Republicans to advance the measure to the House.

The three Democrats were Pat Steadman (Denver), a member of the Joint Budget Committee; Larry Garcia (Pueblo); and John Kefalas (Fort Collins).

The House next week takes up the Long Bill.

For news media coverage of the Senate debate over the Long Bill, read:

“Long Bill makes way out of Senate,” by Marianne Goodland, The Colorado Statesman, April 3rd.

“Senate gives budget bill final approval in 21-to14 tense debate,” by John Frank, The Denver Post, April 2nd.

“Budget squeeze dooms three education spending bills,” by Todd Engdahl, Chalkbeat Colorado, April 2nd.

“Oil and gas flare-ups mark Colorado’s budget battle,” by Ed Sealover, The Denver Business Journal, April 2nd.

“Hickenlooper economic initiatives draw scrutiny in state budget bill,” by John Frank, The Denver Post, March 31st.

“Just $10 million remains for Colorado’s unpassed bills in this year’s budget,” by Ed Sealover, The Denver Business Journal, March 27th.

House Democrats Introduce Bill to Require Overtime for Professionals, Supervisors, Executives and Administrative Personnel Earning Less Than $51,355.20 Annually

On Thursday, House Democrats introduced yet-another bill in their energetic quest to increase the income of workers: HB-1331, which would require that employers pay overtime for four categories of workers earning less than $51,355.20 per year.

The bill is called the “Colorado Overtime Fairness for Employees Act.”

The bill is sponsored by Representative Max Tyler (D-Lakewood), and one of the 13 other co-sponsors is Speaker Dickey Lee Hullinghorst (D-Boulder).  CACI members wishing to contact Representative Tyler can reach him by telephone at 303.866.2951 or via email.

Speaker Hullinghorst assigned the bill to the House State, Veterans and Military Affairs Committee, but it has not yet been scheduled for its first hearing.

The weekly salary floor below which overtime would be required would be three times the minimum wage.  For example, the state minimum wage for 2015 is $8.23.  Thus, the floor would be three times $8.23 times 40 hours per week, or $987.60 per week.  This amounts to $51,355.20 annually.

Thus, any worker who falls into the four categories of “administrative, executive, supervisor, or professional” as defined by the State and earns under this floor would have to be paid overtime by his or her employer.

Anyone in these four categories who earns more than this floor would be “exempt” from the state’s overtime regulations and would not have to be paid overtime.

Because the minimum wage increases each year automatically to adjust for inflation, this floor would also increase to compensate for inflation.

But, wait.  It gets worse.

The Labor Division director could increase the floor even more to “ . . . at the discretion of the director, a greater salary.”

To lessen the complications of the bill on the lives of corporate human-resource managers, the bill conveniently defines for the private sector the four types of positions listed above.

If human-resource managers simply re-write all job descriptions that fall into these four categories to fit the state’s definitions, then compliance with the bill, should it become law, should be much easier.

For information on HB-1331, contact an exasperated Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.

News Media Coverage

Below is recent news-media coverage of state and federal political, policy and governmental issues of interest to CACI:

“Legislators will advise Connect for Health Colorado on hiring next CEO,” by Ed Sealover, The Denver Post, April 1st.

“Business fiscal impact measure dies in Colorado House for 5th year in a row,” by Ed Sealover, The Denver Business Journal, April 1st.

“Regulatory Reform Act dies in Colorado,” by Ed Sealover, The Denver Business Journal, March 30th.

“First testing bill at roadblock, House files new measure,” by John Frank, The Denver Post, March 30th.

“Education committees offer different testing versions,” by Todd Engdahl, Chalkbeat Colorado, March 30th.

“Testing opt-out bill passes Senate Education,” by Todd Engdahl, Chalkbeat Colorado, March 26th.

“Testing opponents rally on eve of opt-out bill hearing,” by Todd Engdahl, Chalkbeat Colorado, March 26th.

“Opponents blister business-backed ballot-reform measure in Colorado Legislature,” by Ed Sealover, The Denver Business Journal, March 25th.

“3 more business bills pass Senate only to face death in House,” by Ed Sealover, The Denver Business Journal, March 24th.

“House speaker wants construction-defects bill amended,” by Ed Sealover, The Denver Business Journal, March 24th.

“Opt-out leader opposes bill that would legitimize parent refusal of state tests,” by Nicholas Garcia, Chalkbeat Colorado, March 18th.

“New twists complicate testing debate,” by Todd Engdahl, Chalkbeat Colorado, March 17th.

“Hick defends ed reform, endorses testing bill,” by Todd Engdahl, Chalkbeat Colorado, March 17th.

“Testing, school liability bills will ramp up ed debates,” by Todd Engdahl, Chalkbeat Colorado, March 13th.

“Colorado senator takes PARCC tests, expresses shock,” by John Frank, The Denver Post, March 10th.

“Garcia: Colorado ‘can’t back down’ on education reform,” by Todd Engdahl, Chalkbeat Colorado, December 5th.

“Testing task force report, recommendations released,” by Todd Engdahl, Chalkbeat Colorado, January 28th.

 

Federal Policy News

President’s Veto Protects NLRB “Ambush Elections”

On Tuesday, President Obama vetoed Congress’ Resolution of Disapproval which, if signed into law, would have removed the National Labor Relations Board (NLRB) rule to effectively shorten the number of days a business has to respond to an union-organizing election.

Prior to this rule, union elections averaged 35-to-38 days, but the new rule will shorten than timeline to as little as 10-to-13 days, giving businesses little time to educate their employees about the pros-and-cons of organizing.

Additionally, the NLRB rule requires businesses to hand over such employee information to union officials: cell and home phone numbers; email addresses; home address; work shifts; and work locations.

CACI believes this rule invades worker privacy while placing even more burdens to the backs of businesses.

CACI registered its objection to this rule with the NLRB last fall and will continue to monitor the lawsuit filed by the National Association of Manufacturers (NAM).

This is the President’s second veto of the year, but he has issued veto threats against 17 other specific bills.  With the veto of Congress’ resolution, the NLRB will move forward with implementation of the rule beginning April 15, 2015.