Governor Ignites Debate Over TABOR Refund and State Spending on Transportation and K-12 Education

Yesterday, Governor John Hickenlooper, in a letter to legislative leaders, unveiled a major, complicated plan to restructure state spending and the refund of the projected TABOR surplus.

After today, however, there are only 13 working days until the legislature is required to adjourn by midnight on Wednesday, May 6^th.

CACI is now analyzing the Governor’s proposal.

Meanwhile, The Denver Business Journal, in an exclusive story this morning, revealed plans by Republican legislators to introduce Monday a concurrent resolution that would place on the November ballot a plan to continue a state bond program to raise $3.5 billion over the next two decades for transportation funding.

For news media coverage of the Governor’s proposal and the state bond program proposal, read:

“Bill to raise $3.5 billion for highway funding coming to Colorado Legislature,” by Ed Sealover, The Denver Business Journal, April 17^th.

“Hickenlooper asks for budgetary move to ensure Colorado roads funding,” by Ed Sealover, The Denver Business Journal, April 16^th.

“Gov. Hickenlooper asks lawmakers to overhaul state spending, TABOR refunds,” by John Frank, The Denver Post, April 16^th.

“Could Colorado’s hospital provider fee be the key to increased road funding,” by Ed Sealover, The Denver Business Journal, March 26^th.

Bill Greatly Expanding Overtime Scheduled for Monday Hearing

A controversial late bill, which would greatly extend overtime to many salaried, professional workers, faces its first hearing Monday afternoon in a House Committee.

HB-1331 changes the minimum-wage standard for when hourly employees must receive overtime, for “exempt” (salaried) employees and “non-exempt” (hourly) employees, making the new standard three times the current annual state minimum wage of $8.23 per hour.

CACI’s Labor and Employment Council has taken an “oppose” position on HB-1331 because it would change decades worth of labor law, harm workers and add more burdens to doing business in Colorado.

HB-1331 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. The bill is called the “Colorado Overtime Fairness for Employees Act.”

Speaker Hullinghorst assigned the bill to her “kill committee,” the House State, Veterans and Military Affairs Committee, which has the bill on its agenda when it convenes at 1:30 p.m., Monday, in Legislative Services Building A. Instead of assigning the bill to the House Business Affairs and Labor Committee, the logical committee of reference for the bill but where it might be killed, the Speaker instead sent it to a committee that is almost guaranteed to approve the bill and send it to either another committee or to the House Floor for Second Reading.

The bill’s fiscal note was issued today, but it “does not estimate the impact on the economy, nor its impact on tax collections, because any estimate would rely on a broad number of assumptions related to how the wages would flow through the economy and the overall impact to employers.”

Those supporting the legislation believe Federal law does not go far enough and that businesses are unfairly making hourly employees work overtime without paying time-and-a-half as required by law. The current income ceiling for overtime pay is $23,660, which was set by President George Bush in 2004. Prior to 2004, anyone making under $8,000 was required to receive time-and-a-half pay for any hours worked beyond the standard 40-hour work week.

Today, the Federal Fair Labor Standards Act of 1938 includes several definitions of roles where employees are salaried and, therefore, exempted from overtime requirements:

Administrative (Human Resources, Public Relations, payroll),
Executive/Supervisor (of at least two-plus people, with hiring/firing input), or
Professional (nurses, doctors, artists, journalists, lawyers, musicians, architects).

If HB-1331 becomes law, these previously exempt categories would now only be exempt from overtime (and therefore salaried) if employees make more than the $51,355.20. In fact, HB-1331 would actually double the current Federal threshold from $23,660 to $51,355, meaning ANY worker (state employee or private sector) making under $51,355 would now be treated as an hourly worker, regardless of previous designations.

Forcing employers to remove salaried positions means employees are the ones who will lose out, and employers will be faced with even more burdens to operate in Colorado.

Specifically, employers would have to document the hours worked for all employees under the salary cap, while removing employee flexibility to work as needed (i.e. would now be penalized for leaving midday for an appointment or children’s activities). This bill would also:

Remove salaried employees from rewards and bonus programs to become hourly-compliant;
Put employees in separate categories of pay for the same role due to years worked, etc.;
Removes the ability of some businesses to have telework and work-from-home options,
Potentially add hours to those who were salaried and may not work 40-hours:
Limit opportunities for employees to excel if aren’t allowed to work as needed to meet end-goals; or,
Remove hours and work productivity for employers who cannot afford to pay time-and-a-half wages.

Here’s what CACI members have to say about HB-1331:

“This law attempts to fix a problem that does not exist, and academic studies have validated that the impact of this increase, like an increase in minimum wage, would result in job losses for the impacted employees. This would increase our costs approximately $101,000 per year. As a Colorado company headquartered here, we do not support this legislation.”

Makes Wages More Complicated: “This law makes Colorado an odd exception compared to other states and makes our state less competitive to attract new businesses here. If the state starts adopting complicated labor laws, companies will start to see Colorado as an unfriendly business environment and look at other states when deciding to invest in jobs.”
Fewer Benefits: “HB-1331 would require us to re-evaluate our bonus programs since non-exempt employees do not participate in bonus plans. Having worked for companies who did business in California, this sounds like the kind of law that they would implement to make it even harder for companies to conduct business in the state.”
More Burden on Business: “Salaried employees have different expectations and skills and should not have their salary tied to the minimum wage. Salaried employees are salaried because they fall into certain spelled-out categories that get them out of being an hourly employee AND avoid needing to keep track of hours worked. Now this bill would make both salaried and hourly employees need to keep track of hours worked-“
Less Opportunity: “This legislation will reduce the number of salaried positions available to new college grads and entry level/early career workers. It is a detriment to the employee, as the job market looks at hourly vs. salaried positions differently. Hourly positions are considered to either be a trade, general labor, or lower skilled position. Forcing new grads into an hourly position could make the individual less competitive in the job market for higher skilled positions, (particularly when looking for employment out of state).
Less Employee Flexibility: “Salaried employees generally enjoy more flexibility and have more control over their hours (start/end times, working from home, etc.). Salaried employees are not penalized for stepping out for a doctor appointment or leaving early for a child’s school event, which is not the case for hourly employees.”

For more information on HB-1331, read:

“House Democrats Introduce Bill to Require Overtime for Professionals, Supervisors, Executives and Administrative Personnel Earning Less than $51,355.20 Annually,” The CACI Colorado Capitol Report, April 3^rd.

Whack-a-Mole: House Minimum-Wage Bill Dies in Senate Committee, Resolution Surfaces in Senate

On Wednesday, a House bill, HB-1300, which would have allowed localities to set their own minimum wages, died on a party-line 3-2 vote in the Senate State, Veterans and Military Affairs Committee. CACI opposed the measure.

Senator Mike Merrifield (D-Colorado Springs) was the Senate sponsor of HB-1300.

On Tuesday, however, Senator Merrifield introduced Senate Concurrent Resolution (SCR) 3, which, if approved by the legislature by a two-thirds vote in each chamber, would be placed on the November ballot as a proposed constitutional amendment to increase the state minimum wage.

SCR-3 would increase the state minimum wage in steps until it reached $12.50 per hour in 2020. SCR-3 is identical to a House measure, HCR-1001, which died last week when it failed to get the two-thirds vote of the House that was required to send it to the Senate.

SCR-3 was assigned to the Senate State, Veterans and Military Affairs Committee, which has scheduled the resolution for a hearing when it convenes at 1:30 p.m., Monday, April 27^th, in Senate Committee Room 353.

CACI members with questions or comments about the minimum-wage issue should contact Loren Furman, CACI Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.

For news media coverage of this issue and more information, read:

“Colorado minimum-wage bill dies amid protest across Denver, nation,” by Ed Sealover, The Denver Business Journal, April 16^th.

“House Gives Final OK to Bill to Allow Local Government to Set Minimum Wages; Resolution to Allow Voters to Increase Stat Minimum Wage Dies,” CACI Colorado Capitol Report, April 3^rd.

The End is In Sight: Legislature Must Adjourn on May 8th.

Today is the 108^stday of the 120-day long, first regular session of the 70th General Assembly.

The legislature must adjourn by midnight, Wednesday, May 8^th. There are only 13 working days left in the session.

As of this morning, legislators have introduced 634 bills: 365 in the House and 269 in the Senate.

CACI’s legislative agenda stands at 43 bills plus one House concurrent resolution.

For information on CACI’s lobbying agenda, contact Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.

In addition to the bills on the CACI legislative agenda, the CACI lobbying team monitors many more bills for their potential impact on the business community.

News Media Coverage

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

“With final vote, lawmakers send state budget bill to Hickenlooper,” by John Frank, The Denver Post, April 17^th.

“Gun-magazine bill rift leads to unheard of maneuver in Colorado House,” by Lyn Bartels, The Denver Post, April 17^th.

“Hullinghorst threatens remodel of defects bill,” by Marianne Goodland, The Colorado Statesman, April 17^th.

“House ‘Coup’ Fails,” by Marianne Goodland, The Colorado Statesman, April 17^th.

“Budget process this year a success,” opinion, by Representative Bob Rankin, The Colorado Statesman, April 17^th.

“Bill will provide marijuana, TABOR fix,” by Catherine Strode, The Colorado Statesman, April 17^th.

“Corporate welfare or workforce development? Debate rages at Colorado Capitol as bills advance,” by Ed Sealover, The Denver Business Journal, April 16^th.

“Denver defends camping ban against legislative attack on law,” by Ed Sealover, The Denver Business Journal, April 15^th.

“Colorado urban-renewal reform advances with bipartisan support,” by Ed Sealover, The Denver Business Journal, April 15^th.

“Colorado eyes ballot question to collect from corporate tax havens,” Joey Bunch, The Denver Post, April 14^th.

Federal Policy News

CACI Joins NAM Letter Supporting Trade Promotion

“As associations and chambers of commerce representing businesses of all sizes in every sector of the U.S. economy and in every region of the country, we are writing to urge swift action on Trade Promotion Authority (TPA).”

Trade agreements negotiated and concluded under TPA help drive economic growth and domestic job creation. They enable manufacturers, service providers and farmers and ranchers across the country to reach the 95 percent of the world’s customers who live beyond the U.S. border. One in four U.S. manufacturing jobs depends on exports, and one in every three acres of farmland is planted for consumers overseas. More than 97 percent of the 300,000 U.S. companies that export are small and medium-sized businesses.

The international playing field, however, often is tilted unfairly against U.S. businesses and workers. Although the U.S. market generally is open, U.S. exports face significant barriers abroad. Trade agreements tear down these barriers and create a level playing field. They help U.S. firms in this country and the millions of workers they employ compete successfully overseas. America’s 20 existing trade agreement partners represent just 10 percent of the global economy, but they purchase nearly half of all U.S. exports.”

Obama Administration Seeks Public Comment On Workforce Opportunity & Investment Act (WOIA)

“The Workforce Innovation and Opportunity Act (WIOA), signed by President Obama on July 22, 2014, is the first major reform to federal job training programs in more than 15 years. WIOA is designed to improve the coordination of employment and training services across federal agencies, strengthen collaboration with state and local partners, and provide Americans with increased access to training, education and other support to succeed in the job market and in their careers. Today, the departments of Labor and Education announced five Notices of Proposed Rulemaking to implement WIOA and seek public comment.” Click here to read the DOL press release.

News Bites

FCC’s Net Neutrality Rules Published – Net Neutrality rules were published this week in the Federal Register, starting the 60-day clock for plan implementation, as well as initiating another round of lawsuits filed by industry.
“Obama Pro-Union Rule to Take Effect”, The Hill – The National Labor Relations Board (NLRB) Ambush Rule Went Into Effect Wednesday, April 15^th & will shorten the amount of time businesses have to respond to union organization elections from an average of 35 to average of 10 days; sharing all employee contact information (including cell phone, email, work schedule and home address) will be compulsory.
Tax Freedom Day for Colorado is April 22^nd – Workers will have earned enough to pay the entire year’s tax bill and on, April 23^rd, earnings totals will go toward individuals.

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