Colorado Passes the Paid Family and Medical Leave Insurance Program
By Kiki Council
On November 3, 2020, Colorado voters passed Proposition 118, which creates Paid Family and Medical Leave (“Paid FMLA”) obligations for all employers in the state. Employers must now provide 12 weeks paid leave for Colorado employees, plus an additional four weeks in case of medical complications.[1]
When does the law go into effect?
Paid FMLA benefits will go into place beginning January 1, 2024.[2]
What does the law cover?
All employers, regardless of size, must offer Paid FMLA to cover an employee’s serious health conditions, care for a family member with a serious health condition, childbirth or adoption, and for reasons related to domestic violence abuse and sexual assault.[3]
How is the program funded?
The program will be funded by requiring workers and employers to pay fees equivalent to 0.9% of a worker’s wages starting on January 1, 2023.[4] Colorado employers must remit a payroll tax to the fund to provide for the new benefits, with the tax being paid half by the employer and half by the employee.[5] Colorado businesses with less than ten employees would not have to pay the employer half of the premium.[6] For the year 2024, the maximum weekly benefit is capped at $1,100.00.[7]
How does the law restrict Colorado employers?
Under the new law, employees are entitled to be restored to the position they held when the leave commenced if they had been employed with their current employer for at least 180 days.[8] Employers also may not retaliate against any employee who seeks Paid FMLA leave.[9] However, employees are not entitled to accrue seniority or employment benefits during any period of leave.
Takeaway
Though the law does not go into effect until January 2023, Colorado employers should plan ahead for how it will implement this new payroll tax. Employers should also begin preparing to communicate this new policy to employees and to develop procedures related to rolling the program out. If you have questions, or would like assistance with preparation, please contact Campbell Litigation, P.C.
Footnotes:
[1] The final proposed bill text can be accessed here: https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2019-2020/283Final.pdf
[2] C.R.S. § 8-13.3-416(1).
[3] C.R.S. §§ 8-13.3-402(4), 8-13.3-404.
[4] C.R.S. § 8-13.3-407(1)-(3).
[5] C.R.S. § 8-13.3-406(1)(a)(II).
[6] C.R.S. § 8-13.3-407(5).
[7] C.R.S. § 8-13.3-406(1)(b).
[8] C.R.S. § 8-13.3-409(1).
[9] C.R.S. § 8-13.3-409(4).