Written by:
Debra Fowler
Compliance & Training Manager
Beginning January 1, 2023
Colorado employers must begin contributions to the Family and Medical Leave Insurance (FAMLI) program. Employees will be eligible to access paid Family and Medical leave starting January 1, 2024, and will be compensated through the Colorado FAMLI Division. Information about the program can be found on the FAMLI website: https://famli.colorado.gov/ and is summarized below.
HOW IS FAMLI FUNDED?
The insurance program is funded through contributions from both the employee and the employer side, depending on the size of the employer. The initial rate for premium contributions is 0.9% for 2023 – 2024.
Employers with 9 or fewer employees will be responsible for deducting 0.45% of each employee’s pay and submitting the premium to the state FAMLI fund on a quarterly basis. The employer does not need to contribute to the state FAMLI fund for each employee if they have 9 or fewer employees.
Employers with 10 or more employees will be responsible for deducting 0.45% of each employee’s pay, and a matching amount of 0.45% from the employer, and submitting the total combined premium of 0.9% to the state FAMLI fund on a quarterly basis.
Employers also have the option of paying some or all of the employee’s premium as a perk or benefit but are not required to do so. The Colorado FAMLI Division will update the premium percentage starting in 2025 and each year thereafter and will provide notice prior to January 1 of each year.
The premiums deducted from the employee’s wages each pay period will need to be detailed on the employee’s paystubs, just like other deductions for benefits, taxes, etc. according to the Colorado requirement for pay statements.
HOW TO COUNT YOUR EMPLOYEES
Headcounts are based on the total number of employees across all states of operation.
Premiums and matching contributions are only required for those employees living and working in Colorado.
Employer count will be calculated once a year
The total number of Employees = Number of employees on the payroll during each of 20 or more calendar work weeks in the preceding calendar year.
If an employer has ten or more employees who worked during 20 or more weeks in all of 2022, the employer is required to pay the employer share of the premium for all four quarters in 2023
Employees on leave must be counted if they are expected to return to active employment including:
Paid/unpaid sick leave, sick or medical leave, other leaves of absence, disciplinary suspension, etc. (CLDE)
The state has indicated that employers can update their headcount annually – so essentially if your headcount is 10 or more employees on 01/01/2023 (and has remained consistent for the past 20 weeks), you will need to contribute the employer matching portion for the entire year. Then at the beginning of 2024, you can do a recount and look back at the previous 20 weeks and determine your headcount.
The state has provided the following guidance for those employers with fluctuations in headcount due to turnover, layoff, etc.:
Employer size is calculated annually by looking at the previous calendar year and counting each employee that was employed during 20 or more work weeks. Employees on paid or unpaid leave, including sick or medical leave, leaves of absence, disciplinary suspension, etc. are counted as being employed as long as the employer has a reasonable expectation the employee will later return to active employment.
WHO IS ELIGIBLE?
After 180 days of employment (for new hires) and after earnings of at least $2500 in the past year (for existing staff), employees will be eligible for up to twelve (12) weeks of paid family and medical leave annually, and can access the paid FAMLI benefit for the following reasons:
To care for an employee’s own, or a family member’s, serious health condition;
To care for an employee’s new child during the first year after the birth, adoption, or foster care placement;
When an employee’s family member is on active-duty military service or being called to active-duty military service; and
When an employee or family member is a victim of domestic violence, stalking, or sexual assault.
***Additionally, an employee with a serious health condition related to pregnancy or childbirth complication is eligible to take up to an additional four (4) weeks of paid family and medical leave, which takes the total available leave up to 16 weeks annually.
FAMILY MEMBER DEFINITION:
The law is specific on the definition of family member:
Regardless of age, a biological, adopted, or foster child, stepchild or legal ward, a child of a domestic partner, a child to whom the covered individual stands in loco parentis, or a person to whom the covered individual stood in loco parentis when the person was a minor;
A biological, adoptive, or foster parent, stepparent, or legal guardian of a covered individual or covered individual's spouse or domestic partner or a person who stood in loco parentis when the covered individual or covered individual's spouse or domestic partner was a minor child;
A person to whom the covered individual is legally married under the laws of any state, or a domestic partner of a covered individual as defined in section 24-50-603(6.5);
A grandparent, grandchild, or sibling (whether a biological, foster, adoptive or step relationship) of the covered individual or covered individual's spouse or domestic partner; or
As shown by the covered individual, any other individual with whom the covered individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.
HOW DO EMPLOYEES ACCESS THE BENEFIT?
Employees will be paid through the Colorado FAMLI Division and will have to submit an application for the leave, similar to the Unemployment Insurance program. Employers will be notified when an employee submits a claim, when the claim is approved, and an estimated return to work date for the employee. Payments will be made to the employee directly, from the Division, within two weeks after a claim is filed and approved, and every two weeks after.
The amount an employee may receive is determined by FAMLI as:
The weekly benefit shall be determined as follows:
The portion of the covered individual’s average weekly wage that is equal to or less than 50% of the state average weekly wage shall be replaced at a rate of 90%; and
The portion of the covered individual’s average weekly wage that is more than 50% of the state average weekly wage shall be replaced at a rate of 50%.
The maximum weekly benefit is 90% of the state average weekly wage, except that for paid family and medical leave beginning before January 1, 2024, the maximum weekly benefit is $1,100.00.
Employers may not require an employee to use or exhaust any PTO, vacation, sick, or other leave benefit prior to accessing the FAMLI benefit. The leave taken under the FAMLI program does run concurrently with federal Family and Medical Leave Act (FMLA) and other types of leave the employer may offer.
LOCAL GOVERNMENTS:
Most Colorado employers are required to comply with the FAMLI program; however, local governments have three options:
Opt to participate in FAMLI and agree to pay the employer premium amount of 0.45% for each employee (if they have 10 or more employees) and submit quarterly premiums of both the employee and employer portions.
Decline to participate in FAMLI, by holding a vote, and notifying the Colorado FAMLI Division of the vote to decline participation. Local governments who decline to participate can continue opting out for a period of eight (8) years, and then hold a new vote to continue to opt-out of the program. Employees of local government entities that have opted out of participation in FAMLI will still have to the option to individually enroll in FAMLI but are not required to do so.
Decline to participate in the employer contribution part of FAMLI, which would allow the employer to assist employees in enrollment to participate individually in FAMLI
Local government entities decide to opt-out of the FAMLI program, they are required to notify their employees within thirty (30) days of the decision, whether it is participation or opt-out.
Local governments must provide their decision to Colorado’s FAMLI Division no later than January 1, 2023. Local governments are required to register with the Colorado FAMLI Division and provide documentation of either their participation or declination. Any local government entity that does not notify the Colorado FAMLI Division of their decision one way or the other, will be automatically enrolled in FAMLI and responsible for premium payments each quarter. Once enrolled, whether voluntarily or involuntarily, a local government entity must stay enrolled for a three-year minimum period, and then provide at least 90 days’ notice if they wish to opt-out at the end of the three years.
Self-employed individuals and Independent Contractors can also enroll in the FAMLI program but are not required to do so. If coverage is elected, self-employed individuals will pay the employee portion of the premium (0.45%) directly to the FAMLI Division.
OPTIONS FOR ALL EMPLOYERS:
All employers can choose between enrolling in the Colorado FAMLI program or submitting a private insurance plan that offers that same rights, protections, and benefits for approval to the FAMLI Division for approval. The state plans to send out more information in the coming months on what the registration and enrollment process will look like for employers, and what the approval process looks like for employers who want to use a private insurance plan. The state has indicated that there will be a requirement for a surety bond for private insurance, and that the approval process will take longer than if an employer were to enroll in the State FAMLI program.
REQUIRED NOTICE TO EMPLOYEES:
The FAMLI Division is working on developing a notice for employers to post and provide to their employees that details the program requirements, benefits, claim process, payroll deduction requirements, job protection rights, benefits continuation, protection against retaliatory action or discrimination, and other applicable program information. This notice must be in a language the employee(s) will understand and will need to be provided to all existing employees no later than January 1, 2023, and to all newly hired staff following that date.
FYI:
Beginning in July 2022, Colorado’s FAMLI Division will begin a public campaign to provide education to the public on the program and next steps.
EMPLOYER NEXT STEPS:
Determine how FAMLI impacts your business – how many employees do you have?
The FAMLI website has a calculator available to estimate the premium amount by employee, or you can use the formula and rate available to estimate the premium amount by your total number of employees.
Educate your staff on the changes they will see on their paycheck in 2023, and what the benefit will be for them in 2024.
In the last quarter of 2022, a FAMLI policy should be added to your Employee Handbook to detail and explain the FAMLI premium contributions.
When the registration period for FAMLI enrollment with the State of Colorado opens, register your business. Or, if you are choosing a private plan, submit your application to the state for approval of the plan.
Once available, post the required FAMLI notice in a conspicuous place for employees to view, and/or provide the information to employees via electronic means such as email or an employee portal.
Begin deductions for employee and employer (if applicable) premium contributions as of January 1, 2023, and remit FAMLI premiums to the State of Colorado on a quarterly basis thereafter.
The state has provided information to help with understanding the law and communicating it to your employees – below you’ll find an Admin Fact Sheet, a Break Room Poster, and a sample of a pay stub detailing the FAMLI premium deductions. The legislation is also attached for your review.
Break Room Poster:
Sample Pay Stub:
Administrator Fact Sheet:
See the full FAMLI act here:
If you have any questions, please contact your Vida HR HR Business Partner, if you are an HRO or HR on Demand client. Thank you.