This version reflects rulemaking by the Director to amend Director's Procedures 1-79(A), (B) and (D), 2-11(A), 3-8(3), 3-18(A), 3-21, 3-22, 3-23, 3-27, 3-28, 3-50, 4-34, 5-5, 5-11, 5-24, 5-25, 5-38(E), 6-4, 8-95(B) and (C), 8-96(B) and (C), and 8-98(C), effective August 1, 2008.This version also reflects rulemaking by the Board to amend Board Rules Chapter 1 statutory authority, 1-54, 1-55, 1-66, Chapter 4 statutory authority, 4-23.1, Chapter 7 statutory authority, 7-2, 7-4, 7-5, 7-7, 7-8, 7-9, 7-10, 7-11, 7-12, 7-13, 7-14, 7-15, 7-16, 7-17, 7-18, 7-19, 7-20, 7-21, 7-22, 8-11, and 8-48, effective October 1, 2007. 
1-79.	State departments and institutions of higher education shall process the following types of payroll deductions:
A.	Required by federal law or state statute (e.g., tax withholdings, garnishments, court-ordered child support );
B.	Authorized by federal or state statute for programs made available by a department or institution (e.g., employee benefits, “eco passes,” tax treatment elections);
D.	For the purpose of facilitating the reimbursement of monies owed to the state from an employee (e.g., higher education tuition, uniforms, salary overpayments); or
2-11.	The senior executive service is an alternative performance-based pay plan available for employees in positions that are in the management class and are responsible for directly controlling, through subordinate managers, relatively large or important segments of a principal department, including the acquisition and administration of human, fiscal, operating, and capital resources, and direction and guidance of significant programs, projects, and public policy development. (Refer to the senior executive service section of the “Compensation” chapter.)
A.	A position may be considered for inclusion in the senior executive service only upon the nomination of the department head. The Director shall review each nominated position to determine whether it meets the senior executive service criteria and to ensure that the statewide total does not exceed 125 positions. The Director may review positions to determine whether a position continues to meet the criteria or whether it should be removed from the senior executive service. The Director’s decision to place a position into, or remove a position from, the senior executive service is final and not subject to appeal.
3-8.	Unless authorized by the Director, the rate resulting from multiple actions effective on the same date shall be computed in the following order.The Director may withhold salary adjustments for any employee with a final overall rating of needs improvement, except as provided in 3-4.
3.	Repealed.
3-18.	Lateral movement is a change to a different class or position with the same range maximum (e.g., transfers, individual allocations, system maintenance studies including class placement), or an in-range salary movement in the same class and position.  Base pay shall be any rate between the employee’s current rate and the grade maximum.  In addition, in-range salary movements are subject to the provisions below.
A.	Salary Range Compression.  Used as a salary leveling increase where longer-term or more experienced employees are paid lower in the range for the class than new hires or less experienced employees over a period of time resulting in documented ongoing retention difficulties.  Thus, there is a valid need to increase one or more employee’s base salary in the class to recognize contributions equal to or greater than the newly hired or less experienced employees.  Justification shall be required based on facts.  To be eligible, an employee must be performing satisfactorily as evidenced by the most recent final overall performance rating.  The increase may be up to 10 percent or the maximum permitted by the department’s policy on hiring salaries, whichever is greater, and subject to the pay grade maximum.
Achievement Pay
3-19.	Any permanent employee is eligible for achievement pay, except as provided below.  Prior to the payment of achievement pay, the Director shall specify and publish the percentage for any base and non-base achievement pay for performance levels according to available statewide funding.  Achievement pay is based on the final overall rating.  The non-base achievement payment is calculated on base salary after any annual compensation adjustments.  Payments are effective on July 1.  The employee must be employed on July 1 to receive payment.  The employee’s current department as of July 1 is responsible for payment.
3-21.	An appointing authority may grant an immediate non-base cash or non-cash incentive award in recognition of special accomplishments or contributions throughout the year or to augment achievement pay, e.g., on-the-spot cash awards, work-life options, or administrative leave, in accordance with a department’s established incentive plan.  Other than augmenting achievement pay, incentives shall not be used to supplement or substitute for annual compensation adjustments or other base pay movements.  The statutory salary lid does not apply to these incentives.
A.	Departments must have an incentive plan prior to the use of incentives.  Such plans shall include eligibility criteria, the types of incentives allowed, cash amounts or limits and payment methods, and a communication plan.  Such plans shall be developed with the input of employees and managers.
1.	If a department uses a type of incentive that shares cost savings from innovations, the following applies.
a.	Employees are ineligible if they are wholly responsible for control and operation of a division (or equivalent), the primary assignment includes responsibility for identifying efficiencies and cost reductions, or the position has statewide program or budget authority.
b.	Savings are the result of innovative ideas that increase productivity and service levels while decreasing costs.  Savings are not the result of normal progressive business evolution, obvious solutions to mandated budget cuts, cost avoidance or revenue enhancement, nor do they have adverse cost impact on other departments.
c.	Savings are the difference between anticipated expenditures prior to implementation and actual expenditures following implementation for a full 12-month period.  The complete award amount shall be no more than 10 percent of the first year’s savings, not to exceed a total of $1,000 per employee.
B.	Incentive plans implemented prior to August 1, 2008, remain in effect, but shall be submitted to the director upon request.  New or modified incentive plans shall be submitted to the director for review prior to implementation.  The director’s review shall be completed within 90 days, unless the director requires further information.  In the event the director finds at any time that an incentive plan is inconsistent with guidance, rule or law, the department will make the appropriate changes.  Failure to provide the incentive plan to the director as required may result in revocation of the incentive plan and delegated authority to grant incentives.
C.	The incentive plan must be communicated to all employees prior to use and on an ongoing basis.
D.	Records on any aspect of incentives must be provided to the director in a timely manner upon request.
3-22.	Repealed.
3-23.	Repealed.
Medical Plan
3-24.	Employees in the medical pay plan shall be compensated based solely on performance as established in the required annual contract to be negotiated by July 1 of the contract year, or within 30 days of hire or movement within the medical pay plan for the remainder of the contract year. Employees are not eligible for any pay adjustments, such as achievement pay. Current performance contracts may be modified during the contract year but not compensation. Change in compensation shall only occur at the end of a contract period, unless an employee moves to another position, and may increase, decrease, or remain unchanged from the previous year. In the case of upward or downward movement in the medical pay plan, compensation must be no lower than the minimum or higher than the maximum rates of the new grade and a new contract must be negotiated for the remainder of the contract year.
A.	If no contract is negotiated, the existing contract continues and base pay stays the same until a new contract is negotiated. Employees in the medical pay plan may grieve the rate unless it is lower, which is then subject to appeal. If the employee moves into or out of the medical pay plan into another open-range class, the base pay shall be negotiated subject to the grade maximum of the new class.
Senior Executive Service
3-25.	Employees in the senior executive service shall be compensated based solely on performance as established in the annual contract, which must be negotiated by July 1 of the contract year, or within 30 days of hire or movement within the plan for the remainder of the contract year. All contracts expire on June 30 and no employee shall remain in the senior executive service without a contract. The salary shall not exceed the maximum allowed for the position in the management class by more than 25 percent. Employees are not eligible for any pay adjustments, such as achievement pay. Current performance contracts may be modified during the contract year but not compensation. Compensation may only be changed at the end of a contract period, and may increase, decrease, or remain unchanged from the previous year. Compensation may change if the employee moves to another position.
FLSA and Overtime
3-26.	All employees are covered by the Fair Labor Standards Act (FLSA). Under FLSA, the state is considered to be a single employer. Employees cannot waive their rights under FLSA.
3-27.	All full-time employees work a minimum of 40 hours during a standard workweek (168 consecutive hours in seven consecutive days).  Appointing authorities may adopt different work periods for law enforcement and health care employees as permitted by federal law.
3-28.	Overtime is the time a non-exempt employee works in excess of the 40 hours during a standard workweek or in excess of established work hours in adopted work periods for law enforcement and health care employees.  Such excess hours are paid at 1½ times the employee’s regular hourly base pay rate, including applicable premium pay.  Monetary payment must be made by the next regularly scheduled payday following the pay period in which it was worked.
A.	Overtime for non-exempt employees shall be approved in accordance with a department’s procedure.  A department head shall establish a policy to address unauthorized overtime work; however, prohibition of unauthorized overtime does not avoid the requirement to pay if it is actually worked.
B.	Compensatory time in lieu of monetary payment is allowed if there is a written agreement between the department and any employee hired after April 15, 1986. Written agreements for those hired prior to April 15, 1986, are unnecessary provided that the department had a regular practice in place for granting compensatory time. Acceptance of compensatory time may be a condition of employment for new employees. Appointing authorities must ensure that compensatory time is scheduled as soon as practical. Compensatory time shall not exceed 240 hours (or 480 hours for law enforcement) and any additional overtime must be paid at the next regular pay period. If a department wants to place limits on the accrual or payment of compensatory time, a policy must be developed and communicated prior to use and on an ongoing basis. Unused compensatory time at termination or transfer to another department must be paid at that time.
3-50.	Discretionary Pay Differentials.  A department may use non-base building discretionary pay differentials on a temporary basis, which shall be funded within existing budgets.  Use of these pay differentials is at the discretion of the appointing authority and shall not be used as a substitute for annual compensation adjustments, other pay policies, or promotions. No differential is guaranteed and, if granted, may be discontinued at any time.  No aspect of any discretionary pay differential is subject to grievance or appeal, except for discrimination; however, an alleged violation of the department’s plan can be disputed.  A department’s decision in the dispute is final and no further recourse is available.  Departments must develop and communicate a written plan addressing appropriate criteria for the use of any differential based on sound business practice and needs.  If granted, there must be an individual written agreement between the employee and appointing authority that stipulates the terms and conditions of the differential, including the dates the differential will begin and end.  Records of any aspect of these differentials must be provided to the Director when requested.
A.	Counteroffer to a verifiable job offer may be used when an employee with critical strategic skills receives a higher salary offer from another department or outside employer and the appointing authority needs to retain the employee.  The sum of a non-base building differential and current base pay cannot exceed a statutory lid in any given month and may be paid in one or more payments.
4-34.	A substitute appointment may only be made to perform the duties of a filled position during a leave or for training purposes. This appointment shall not exceed six months unless transfer, demotion, or examination fills it. Layoff provisions do not apply and a certified employee is returned to a position in the former class.
5-5.	Sick leave is provided in the event time off is needed for health reasons.  This includes diagnostic and preventative examinations, treatment, and recovery.  Accrued sick leave may also be used for the health needs of the employee’s child who is under the age of 18 or an adult child incapable of self care, parent, spouse, legal dependent, or a person in the household for whom the employee is the primary care giver.  Accrued sick leave is also used during family/medical leave for an injured military service member.  The appointing authority may require documentation of the familial relationship.  Note that this definition of family is different from family/medical and bereavement leave.
5-11.

5-24.	FML is granted to eligible employees for: (1) birth and care of a child and must be completed within one year of the birth; (2) placement and care of an adopted or foster child and must be completed within one year of the placement; (3) the serious health condition of an employee’s parent, child, or spouse for physical care or psychological comfort; or, (4) an employee’s own serious health condition.  Definitions of a serious health condition and health care provider are in the “Definitions” section of the “Organization, Responsibilities, Ethics, and Definitions” chapter.
A.	Expansion of FML for military family leave.  For purposes of this leave, a child is one who is qualified for military service.
1.	Active duty family leave is granted to an eligible employee when a parent, child, or spouse experiences a qualifying exigency directly related to being called to, or on active duty for a contingency operation.  A contingency operation is a military action or operation during a declared war or national emergency, as opposed to regular activities such as annual military training.  The leave covers non-medical events directly related to pre-deployment, deployment, and post-deployment.  Active duty family leave runs concurrent with all appropriate paid leave (except sick leave) and then unpaid leave.  Military orders fulfill the certification requirement.  All other rules related to FML apply.
2.	Military caregiver leave is granted to an eligible employee to care for a parent, child, spouse, or next of kin (nearest blood relative) who suffers a serious injury or illness in the line of duty while on active duty in support of a contingency operation.  The condition may render the service member medically unfit to perform the duties of his or her office, grade, rank, or rating.  The leave covers medical treatment, recuperation, or therapy; outpatient status in a military facility or unit; or placement on the temporary disability retirement list.  All other rules related to FML apply, except medical certification must indicate that the condition occurred in the line of duty while on active duty.  In addition, a medical certificate issued by the department of defense may be accepted in lieu of the State of Colorado Medical Certificate form.
5-25.	To be eligible, an employee must have one year of total state service as of the date leave will begin.  Such service is time on the payroll, regardless of employee type, and need not be consecutive time.  If currently a temporary, the employee must also have worked 1250 hours within the 12 months prior to the date leave will begin.  Time worked includes overtime hours and paid leave (excludes any type of unpaid leave).  If the employee has worked full time, up to 520 hours per fiscal year will be granted, including active duty family leave.  If part time, the amount of leave is prorated based on the regular appointment or schedule.  If a part-time employee works an irregular, variable schedule, the amount of leave is prorated based on the average number of hours worked in the 12 weeks prior to the beginning of the leave (rounded to the nearest 1/100 of an hour).  Any extension of leave beyond the amount entitled to is not FML and is subject to other provisions in these chapters.  Requiring an employee to use more FML than needed is not permitted.
A.	Military caregiver leave is a one-time entitlement of up to 1040 hours (prorated for part-time) in a single 12-month period starting on the date the leave begins.  While intermittent leave is permitted, it does not extend beyond the 12-month period.  In addition, the combined total for military caregiver and all other types of FML shall not exceed 1040 hours.
5-38.	Injury Leave . An employee, other than an employee in provisional status or temporary status, who suffers an injury or illness that is compensable under the Workers’ Compensation Act shall be granted injury leave up to 90 occurrences (whole day increments regardless of the actual hours absent during a day) with full pay if the temporary compensation is assigned or endorsed to the employing department.
E.	If a holiday occurs while an employee is on injury leave, the employee receives the holiday and the day is not counted as an injury leave occurrence.
6-4.	The Director shall establish requirements governing the performance management system.  The performance management system does not apply to employees in the senior executive service or medical plan.  Departments must develop a performance management program that includes the dispute resolution process and is approved by the Director before implementation.  All employees shall be evaluated, in writing, at least annually based on the past year’s performance.  If an employee moves to a position under another appointing authority or department during a performance cycle, an interim overall evaluation shall be completed and delivered to the new appointing authority or department within 30 days of the effective date of the move.  No evaluation is required when an employee retires from employment in the state personnel system.  These requirements shall be applied by all appointing authorities and designated raters, including any person employed by the state who supervises an employee.  The department’s performance management component must include the following.
Performance Managements Disputes
8-94.	The performance management dispute resolution process is an open, impartial process that is not a grievance or appeal. No party has an absolute right to legal representation, but may have an advisor present. The parties are expected to represent and speak for themselves.
8-95.	Only the following matters are disputable:
B.	the individual final overall performance evaluation, including lack of a final overall evaluation; and,
C.	the application of a department’s performance management program to the individual employee’s plan and/or final overall evaluation.
8-96.	The following matters are not disputable:
B.	matters related to the funds appropriated; and,
C.	the performance evaluations and achievement pay of other employees.
8-98.	Dispute Resolution Process . Only the issue(s) as originally presented in writing shall be considered throughout the dispute resolution process.
C.	In the event that an employee with a pending dispute separates from the state personnel system, the dispute is dismissed.