Employer Responsibilities for Colorado Family and Medical Leave Insurance Program
In 2020, Colorado voters passed Proposition 118 which created the Colorado Family and Medical Leave Insurance Program (FAMLI). Under the law, most employees[1] can take up to 12 weeks of paid leave for family or medical purposes. While on paid leave, employees receive a benefit that is a percentage of their weekly wage. This benefit begins in January 2024.
The paid leave program, which runs concurrently with Federal FMLA, is funded by payroll contributions, which, for 2023, equal 0.9% of an employee’s wages up to $160,200. Employers have the option of requiring that employees pay up to 50% of the obligation via payroll deduction, or the employer can cover a greater portion of the employee’s obligation.
Employer Responsibilities
While employees must wait until January 2024 before paid family and medical leave benefits begin in Colorado, employer’s responsibilities under FAMLI begin on January 1, 2023. Employers are responsible for complying with FAMLI if they employ a single employee in Colorado, at a job site or remotely.
- Contributions: Starting on January 1, 2023, employers must begin withholding employee’s part of the FAMLI premium and make required contributions of their own. Employers with up to nine employees nationwide only need to withhold and remit their Colorado employee’s part of the premium and do not have to pay the employer’s share. Employers with ten or more employees nationwide must withhold their Colorado employee’s portion of the premium and pay the employer’s share. To learn more click here.
- Register with My FAMLI+ Employer: To submit the combined premium contributions, employers must register with the online system My FAMLI+ Employer. Employers will need to register with My FAMLI+ Employer prior to April 30, 2023, when the first premium payments are due. Information about My FAMLI+ Employer can be found here.
- Notice Requirements: Starting January 1, 2023,employers must begin providing a notice to their employees explaining paid family and medical leave benefits. The notice must be posted in a prominent location and be distributed to new hires and upon learning an employee experienced a paid leave qualifying event. The required notice can be found here.
- Equivalent Private Plans: Employers may opt out of the state plan if they offer an employer sponsored paid leave plan with the same or greater benefits to employees at the same or lower cost. Employers must submit their paid leave plan to the state for approval. All employers must start collecting and contributing FAMLI premiums January 2023, but if an employer’s plan is state approved and effective on or before January 1, 2024, premiums paid in 2023 can be reimbursed. Colorado will start accepting private paid leave plan applications sometime in 2023.
Key Takeaway:
Employers with employees located in Colorado would be well served by taking steps now to comply with FAMLI before their obligations begin on January 1, 2023. Employers should understand their compliance obligations, contribution requirements, contribution strategy, and employer sponsored paid leave options so they can implement a plan that best fits their organization’s needs prior to FAMLI’s full implementation on January 1, 2024.
[1] Colorado employees become eligible to take paid leave after earning $2,500 in wages within the State, over a period of one year. See FAQ document.
