On November 3, 2020, Colorado voters passed Proposition 118 which creates a paid family and medical leave insurance (“FAMLI”) program to be administered by the Colorado Department of Labor and Employment (“CDLE”).
Beginning January 1, 2024, eligible employees have the right to take paid family and medical leave, and to receive FAMLI insurance benefits (“Benefits”) while on leave, for the following purposes:
- To care for a serious medical condition;
- To care for a family member with a serious medical condition;
- To care for a new child during the first year;
- When an employee or an employee’s family member needs to take safe leave because they are a victim of domestic violence, stalking, or sexual assault or abuse; and
- When an employee needs to take qualifying exigency leave because an employee’s family member is on or being called to active duty military service
Eligible employees may receive up to 12 weeks of FAMLI Benefits in one year. An additional 4 weeks of FAMLI Benefits is available to employees with a serious health condition related to pregnancy or childbirth complications. For the FAMLI program, “family member” is interpreted quite broadly and includes any “individual with whom the person has a significant personal bond that is like a family relationship.”
To fund the FAMLI program, employers and employees each pay premiums into a new FAMLI fund commencing January 1, 2023. Initially, premiums will be 0.9% of each employee’s taxable wages. Employers are responsible for at least 50% of the premium, but can choose to cover more, and employees are responsible for the remaining amount. For example, an employer may elect to pay 60% of the premium such that employees only pay 40% of the premium. Assuming an employer pays the minimum 50% of the premium, employers and employees will each pay 0.45% of the employee’s wages (for a total premium of 0.9%) in 2023 and 2024. Commencing January 1, 2025, the CDLE may increase the premium up to 1.2% of wages per employee. Similar to unemployment insurance, employers are responsible for remitting payment to the CDLE and employee premiums may be deducted from each employee’s paycheck.
Subject to limited exceptions, all employers must participate in the FAMLI program and pay premiums. Exceptions exist for employers with 9 or fewer employees, employers with approved private paid family and medical leave programs, local governments, and self-employed individuals. Employers with 9 or fewer employees need not pay the entire premium, however, they must still withhold and remit to the CDLE the employee’s portion of the premium. Employers with approved private paid family and medical leave programs also do not pay premiums. The CDLE will publish rules regarding private paid family and medical leave programs and the approval process by January 1, 2022. Further, while “employer” is defined to include the State or a political subdivision of the State, local government employers may elect to decline participation in the FAMLI program and are not responsible for paying premiums or withholding employee premiums. However, employees of local governments that decline participation may opt in and pay the employee portion of the premium. The CDLE will publish rules regarding how local governments decline to participate and how employees of those local governments may opt to participate by January 1, 2022. Finally, self-employed individuals who elect to participate need only pay the employee portion of the premium.
The following chart breaks down premium responsibilities or options for the various employers and employees.
| Type of Employer | Employer Premium | Employee Premium | No Premium |
|---|---|---|---|
| 10 or more employees | X | X | |
| Participating local government | X | X | |
| 9 or fewer employees | X | ||
| Participating self-employed | X | ||
| Participating local government | X | ||
| Nonparticing local government | X | ||
| Nonparticipating self-employed | X | ||
| Employer with private plan | X |
Commencing January 1, 2024, eligible Colorado employees may apply for FAMLI Benefits for the eligible purposes. To receive Benefits, employees must have earned at least $2,500 in wages subject to premiums and apply to the CDLE for Benefits. The amount a person receives depends upon the employee’s average weekly rate. For 2024, the maximum weekly benefit is $1,100. Starting in 2025, the maximum weekly benefit will be 90% of the state average weekly wage.
Employers may not retaliate or otherwise discriminate against employees who exercises their rights to Benefits under FAMLI. Further, Employees who have been employed by their current employer for at least 180 days are entitled to job protection during leave. Job protection ensures that upon return from leave employees are entitled to the same position or a position with equal seniority, status, employment benefits, and pay. Finally, employees are entitled to retain health benefits during leave (but must pay their portion of the health premiums).
What does this mean for employers? For now, nothing! However, it is important to know that significant changes are coming in the near future. The CDLE will publish important rules regarding implementation of the FAMLI program by January 1, 2021, which will provide employers with more information to help prepare for the transition to FAMLI. We will continue to update employers as more information is provided on this new insurance program.
This article is intended as general information and is not to be construed as legal advice. If legal advice is needed, you should consult an attorney.