Payment of Postemployment Compensation to Government-supported Employees

C.R.S. tit. 24, art. 19

in effect

C.R.S. § 24-19-101 Legislative declaration

24-19-101. Legislative declaration. (1) The general assembly hereby finds and declares that: (a) The payment of compensation to government-supported officials or employees after such officials or employees have ended their employment creates unnecessary costs, which ultimately are borne by the taxpayers of this state. (b) In order to reduce government costs, it is necessary for the state to limit the payment of postemployment compensation to government-supported officials and employees. (c) The continued payment of compensation to any official or employee after such official or employee has ended his or her service with a governmental unit or government-financed entity not only affects the finances of such governmental unit or government-financed entity, but also has a serious impact on the state as a whole because of the total effect of such compensation payment arrangements on the ability of state and local governments to provide services using the scarce resources that are available. Further, the general assembly finds and declares that the provision of large payments to government-supported officials and employees after their employment has ended has caused grave damage to the trust of the citizens of this state in their state and local government officials. Because of these concerns, the general assembly finds and declares that this is a matter of statewide concern.

C.R.S. § 24-19-102 Definitions

24-19-102. Definitions. For the purposes of this article, unless the context otherwise requires: (1) "Government-financed entity" means any organization, group, or other entity if: (a) Such entity is composed of members which are governmental units or who are officials or employees of governmental units; and (b) At least fifty percent of the annual operating budget for such entity is derived from dues, contributions, or other payments received from governmental units. (2) "Government-supported official or employee" means any person who is employed or who was employed by a governmental unit or by a government-financed entity and who is or was a manager, an official, or an administrator for such governmental unit or government-financed entity. (3) (a) "Governmental unit" means the state of Colorado, any department, division, section, unit, office, commission, board, institution, institution of higher education, or other agency of the executive, legislative, or judicial branch of the state government, or any local government, authority, public corporation, body politic, or other instrumentality of the state. (b) "Governmental unit" does not include the university of Colorado hospital authority created pursuant to section 23-21-503, C.R.S., or the Denver health and hospital authority created in section 25-29-103, C.R.S. (4) "Local government" means a county, municipality, city and county, or school district or a special district created pursuant to the "Special District Act", article 1 of title 32, C.R.S. (5) (a) "Postemployment compensation" means compensation paid to a government-supported official or employee after termination of such government-supported official or employee's employment from a particular employment position with a governmental unit or a government-financed entity or after termination of the performance of actual services for such governmental unit or government-financed entity in such employment position if such compensation was not earned prior to such termination or, for an official or employee who becomes employed in a new position with the governmental unit or government-financed entity after such termination, if such compensation was not earned in the new position. "Postemployment compensation" shall include, but is not limited to, the provision of any unearned postemployment employee benefits. "Postemployment compensation" does not include the following: (I) Any retirement benefits earned by a government-supported official or employee during the employment of such official or employee with a governmental unit or government-financed entity; (II) Any payment made as a part of a bona fide early retirement program that is available to a class of five or more government-supported officials or employees; (III) Any payments of deferred compensation that have been earned by a government-supported official or employee during the employment of such official or employee with a governmental unit or government-financed entity; (IV) Any workers' compensation payment; or (V) Any unemployment compensation payment. (b) The term "postemployment compensation" includes any retirement benefits or any payments of deferred compensation to be paid into a retirement fund or deferred compensation plan after termination of performance of actual services for the particular employment position in the usual course of said employment. The prohibition of postemployment compensation is intended to eliminate any employment contract provision that binds the employer to make payments into a retirement fund or deferred compensation program after termination of performance of actual services in an employment position. Said prohibition is not intended to forbid the receipt of benefits or payments earned during actual performance of services if these benefits or payments are to be credited to or received by the employee after termination of actual performance of services for an employment position. fund or deferred compensation program after termination of performance of actual services in an employment position. Said prohibition is not intended to forbid the receipt of benefits or payments earned during actual performance of services if these benefits or payments are to be credited to or received by the employee after termination of actual performance of services for an employment position. (c) Unless otherwise excluded by the provisions of this article, the term "postemployment compensation" includes any payment made to a government-supported official or employee after the term of employment of such official or employee in a particular employment position has ended pursuant to a settlement agreement between a governmental unit or government-financed entity and the official or employee; except that such payment is not postemployment compensation if such payment is made as part of a bona fide settlement of a legitimate legal dispute.

C.R.S. § 24-19-103 Prohibition against postemployment compensation - exception

24-19-103. Prohibition against postemployment compensation - exception. (1) Except as provided in subsection (2) of this section, notwithstanding any other provision of law to the contrary, no governmental unit or government-financed entity shall pay postemployment compensation to any government-supported official or employee. (2) (a) At the option of the appointing authority for any government-supported official or employee, such official or employee may be provided postemployment compensation that consists of the payment of up to a maximum of three months of salary for such official or employee and the provision of up to a maximum of three months of employee benefits for such official or employee. No postemployment compensation shall be provided other than cash payments and the provision of employee benefits. Postemployment compensation may be approved and provided only if the government-supported official or employee who is to receive such compensation was employed by the governmental unit or government-financed entity for less than five years; except that postemployment compensation may be approved and provided for an official or employee of a state institution of higher education or of the Auraria higher education center, regardless of the length of employment. (b) Postemployment compensation may be provided to any government-supported official or employee only if the appointing authority for the official or employee takes positive action to approve such compensation. The provisions of this subsection (2) shall not be construed to authorize any employment contract term requiring the provision of postemployment compensation in violation of the provisions of section 24-19-104. Postemployment compensation payments shall be solely the option of the appointing authority for a government-supported official or employee and no official or employee shall be entitled to or have any right to receive any postemployment compensation. (3) Any employment contract, employment contract extension, or other agreement between a governmental unit or government-financed entity and a government-supported official or employee that is not substantially in compliance with this section is null and void. Any payment made to any person by a governmental unit or government-financed entity in violation of this section is illegal and the recipient of such payment shall return the payment to the governmental unit or government-financed entity.

C.R.S. § 24-19-104 Terms of employment contracts - public inspection

24-19-104. Terms of employment contracts - public inspection. (1) Except as expressly permitted pursuant to subsection (1.5) of this section, if any governmental unit or government-financed entity enters into an employment contract or employment contract extension with a government-supported official or employee, such employment contract or employment contract extension shall contain terms that clearly state that: (a) Such employment contract is subject to termination by either party to such contract at any time during the term of such contract and that such official or employee shall be deemed to be an employee-at-will; (b) No compensation, whether as a buy-out of the remaining term of the contract, as liquidated damages, or as any other form of remuneration, shall be owed or paid to such government-supported official or employee upon or after the termination of such contract except for compensation that was earned prior to termination prorated to the date of termination; and (c) If the contract is not substantially in compliance with the prohibition against payment of postemployment compensation, the contract is null and void. (1.5) (a) Notwithstanding the provisions of subsection (1)(a) of this section, each system of higher education and each campus of each state institution of higher education may have in effect employment contracts or employment contract extensions having a duration not more than five years with not more than six government-supported officials or employees if: (I) The governing board of the institution determines that the contract or extension is necessary for the hiring or retaining of the employee in light of prevailing market conditions and competitive employment practices in other states; (II) The contract contains a clause that the institution remains free to terminate the contract or extension without penalty if sufficient funds are not appropriated. (b) Nothing in this subsection (1.5) shall be construed to exempt any governmental unit or government-financed entity from the requirements of section 24-19-103. (c) Notwithstanding the provisions of paragraph (a) of subsection (1) of this section or paragraph (a) of this subsection (1.5), each system of higher education and each campus of each state institution of higher education may have in effect an unlimited number of employment contracts or employment contract extensions having a duration of not more than five years with an unlimited number of government-supported officials or employees if the employment contracts or employment contract extensions are for research to be performed in university settings. A contract executed pursuant to this paragraph (c) shall include a provision that the contract shall become unenforceable if, during the term of the contract, the system of higher education or campus of a state institution of higher education that is a party to the contract: (I) Ceases to be an enterprise, as defined in section 20 (2)(d) of article X of the state constitution; and (II) Lacks present cash reserves sufficient to pledge irrevocably to satisfy the terms of the contract. tract shall become unenforceable if, during the term of the contract, the system of higher education or campus of a state institution of higher education that is a party to the contract: (I) Ceases to be an enterprise, as defined in section 20 (2)(d) of article X of the state constitution; and (II) Lacks present cash reserves sufficient to pledge irrevocably to satisfy the terms of the contract. (d) Notwithstanding the provisions of subsection (1)(a) or (1.5)(a) of this section, each system of higher education and each campus of each state institution of higher education may, subject to the approval of the chief executive officer of the system or institution and any rules or limitations established by the chief executive officer, have in effect an unlimited number of term employment contracts or term employment contract extensions having a duration of five years or fewer with an unlimited number of government-supported officials or employees if the term employment contracts or term employment contract extensions are for half-time or longer, non-tenure-track classroom teaching appointments or librarian appointments. A person employed in a classroom teaching appointment pursuant to a term employment contract or term employment contract extension described in this subsection (1.5) may have duties in addition to classroom teaching, as described in the contract or contract extension. A term employment contract or term employment contract extension executed pursuant to this subsection (1.5) must include a provision stating the contract or contract extension is unenforceable if, during the term of the contract or contract extension, the system of higher education or campus of a state institution of higher education that is a party to the contract: (I) Ceases to be an enterprise, as defined in section 20 (2)(d) of article X of the state constitution; and (II) Lacks present cash reserves sufficient to pledge irrevocably to satisfy the terms of the contract. (2) If any governmental unit or government-financed entity enters into an employment contract or employment contract extension with any government-supported official or employee on or after July 1, 1993, such governmental unit or government-financed entity shall make the terms of such contract available to the public for inspection and copying during regular business hours. (3) The provisions of this section shall not be interpreted to authorize the termination of any government-supported official or employee for any reason that is contrary to applicable federal, state, or local law. (4) (a) No governmental unit or government-financed entity shall enter into an employment contract with a government-supported official or employee or extend an existing employment contract with a government-supported official or employee if such employment contract or contract extension contains any provisions that are intended to evade the requirements of this article. Contractual provisions that are prohibited under the provisions of subsection (1) of this section include, but are not limited to, any provision that allows a government-supported official or employee to earn an unreasonably large portion of contractual compensation during the early stages of the term of employment of such government-supported official or employee. (b) The provisions of paragraph (a) of this subsection (4) shall not be interpreted to prohibit the reimbursement of any actual relocation expenses of government-supported officials or employees or the payment of reasonable incentives for accepting employment to government-supported officials or employees.

C.R.S. § 24-19-105 Settlement agreements - public inspection - filing with the department of personnel

24-19-105. Settlement agreements - public inspection - filing with the department of personnel. (1) (a) Notwithstanding any other law to the contrary, if any settlement agreement between a governmental unit or government-financed entity and a government-supported official or employee settles any employment dispute between such parties and involves the payment of any compensation to such official or employee after the term of employment of such official or employee in a particular employment position has ended, information regarding any amounts paid or benefits provided under such settlement agreement shall be a matter of public record. Any governmental unit or government-financed entity that is a party to such a settlement agreement shall make such information available for public inspection and copying during regular business hours. (b) If a state governmental unit enters into a settlement agreement to settle any employment dispute with a government-supported official or employee, the state governmental unit shall file a copy of the final settlement agreement with the department of personnel, which shall be a public record pursuant to the provisions of part 2 of article 72 of this title. (2) The provisions of subsection (1) of this section shall apply to: (a) Any settlement agreement entered into on or after July 1, 1993; and (b) Any settlement agreement entered into prior to July 1, 1993, if no other provision of law would prohibit public disclosure of the provisions of such settlement agreement.

C.R.S. § 24-19-106 Existing employment contracts - contract extensions

24-19-106. Existing employment contracts - contract extensions. The provisions of this article shall not apply to any employment contract which was in existence before July 1, 1993; except that the provisions of this article shall apply to any extension of an existing contract if such contract does not contain any term which would prohibit the application of the provisions of this article to such contract extension.

C.R.S. § 24-19-107 Open records

24-19-107. Open records. If a governmental unit is required under the provisions of this article to make any employment contracts or any information regarding amounts paid or benefits provided under any settlement agreements available to the public, such employment contracts or information shall be deemed to be public records, as such term is defined in section 24-72-202 (6), and shall be subject to the provisions of part 2 of article 72 of this title.

C.R.S. § 24-19-108 Exceptions - definition

24-19-108. Exceptions - definition. (1) The provisions of this article 19 shall not apply to the following: (a) Any employee employed by the state government or any other governmental unit who is to hold his or her position of employment during efficient service or until reaching retirement age under an employment system denominated as civil service, classified service, or any similar employment system classification; (b) Any tenured or tenure track faculty member whose primary job assignment is teaching, research, or both teaching and research and who is employed at a state institution of higher education or any specialty track faculty member whose primary job assignment is clinical care and who is employed at a state institution of higher education; (c) Any employee employed by a unit of local government whose governing body is directly elected by the electors of such local government; (d) Any certified employee who is separated from state service due to lack of work, lack of funds, or reorganization and who receives postemployment compensation or other benefits authorized by a layoff plan established by the state personnel director pursuant to section 24-50-124 (1)(d)(I); or (e) Any employee employed at a state institution of higher education whose position is funded by revenues generated through auxiliary activities. For purposes of this subsection (1)(e), "auxiliary activities" means institutional activities managed and accounted for as self-supporting activities.

C.R.S. § 24-19-109 Enforcement of article - civil suit

24-19-109. Enforcement of article - civil suit. If any governmental unit or government-financed entity makes any payment or enters into any agreement in violation of this article, the provisions of this article may be enforced through a civil suit filed in a court of competent jurisdiction.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-24.docxFetched: 10/6/2026