The bill would require the chief executive of each state agency, including university systems, legislative agencies, and courts, to establish a grievance procedure to allow employees to appeal various employment actions. Employment actions that could be appealed include disciplinary actions such as oral or written warnings, demotions, suspensions, terminations, as well as employee grievances related to changes in compensation or working conditions or hours. The appeals would be considered contested cases under the Administrative Procedure Act.
The fiscal impact would depend on the volume of grievance filings resulting from the process that each agency establishes pursuant to the bill, and that volume is unknown. Some agencies indicate that they would need significant new resources related to legal personnel and support staff to handle the increased workload, as well as some technology costs for additional software licenses and other needs.
The State Office of Administrative Hearings (SOAH) provided a cost estimate, but for the purposes of this fiscal note, the fiscal impact to the agency cannot be determined. SOAH does not currently handle contested cases related to state employee grievances and the total number of cases SOAH would receive is unknown. The agency estimates needing an additional 131.0 FTEs at a cost of $19,006,832 in General Revenue Funds in fiscal year 2026 and $18,171,313 in General Revenue Funds each fiscal year thereafter. The agency's estimate assumes that there would be 20,500 agency employee grievances each year and that SOAH would be responsible for 10,250, or half, of the resulting hearings.
According to the Health and Human Services Commission (HHSC), the agency would require staff and resources to implement the bill and respond to increased grievance hearings for HHSC and Department of State Health Services (DSHS) staff. Personnel needs for HHSC would depend on the number of employees filing a grievance. The likely number of grievance hearings cannot be determined.
The Comptroller of Public Accounts (CPA) estimated a fiscal impact of $956,000 in General Revenue Funds and 7.0 FTEs to handle the grievance hearing and appeals process. This estimate is based on an assumption by the agency that all of the agency's 342 disciplinary actions in an average year would lead to grievance filings. Based on these assumptions, CPA expects that a new team of 7.0 attorneys would be required to handle the increased workload.
Other responding agencies also indicated that there may be costs associated with the bill, but they could be absorbed within existing resources.
No significant fiscal implication to units of local government is anticipated.