In November, Colorado voters voted in favor of Proposition 118 for the creation of a statewide paid family and medical leave insurance program (“CO PFMLI” or “Program”) which includes a newly created state agency the Division of Family and Medical Leave Insurance (“Division”). The Program will provide Colorado employees with up to 12 weeks of job-protected, partial pay for family and medical leave related absences and up to 16 weeks of paid leave if workers have a serious health condition related to pregnancy or childbirth complications. This article reviews what we know so far about the program.
Colorado PFMLI Timeline
|1/1/2022||Deadline for Release of CO PFMLI Regulations|
|1/1/2023||Employee Payroll Contributions Begin|
|1/1/2024||Eligible Employees Can Start Applying for Benefits|
Which employers will CO PFMLI apply to?
Any employer that employs at least one person in the state of Colorado.
Which employees are covered by CO PFMLI?
Employees employed for 180 days and who earned at least $2,500 in wages during the defined “base period” or “alternative base period” are covered and eligible for leave. “Base period” means the first four of the last five completed calendar quarters immediately preceding the first day of the employee’s benefit year. “Alternative base period” means the last four completed calendar quarters immediately preceding the benefit year.
How is CO PFMLI funded?
Th Program will be funded through premiums in the form of a payroll deduction split evenly between employers and employees. The initial deduction is set at 0.9% of an employee’s wages (capped at the Social Security wage base). Beginning January 1, 2025, the Director of the Division will set the premium each year, not to exceed 1.2% of each employee’s wages.
Employers with 10 or more employees must contribute at least 50% and may deduct the remaining premium from employee’s wages. Employers with fewer than 10 employees are required to withhold the employee portion of the premium from the employee’s wages, but are not required to contribute the employer’s portion of the premium to the fund. The text of Proposition 118 does not specify whether this headcount applies to employees only in Colorado or nationwide.
Employers and employees will begin paying into the Program on January 1, 2023, and benefits will be available to employees beginning on January 1, 2024.
What are the qualifying reasons for paid leave under the Program?
Beginning January 1, 2024, an eligible employee may take leave:
- for the birth of a child, adoption or foster care placement, or caring for a new child within one year of birth, adoption, or foster placement;
- to care for a family member with a serious health condition;
- for the employee’s own serious health condition;
- for any qualifying military exigency leave;
- for or relating to the need for safe leave.
The maximum allowed benefit is 12 weeks with the exception of complications related to pregnancy or childbirth, in which case an additional 4 weeks are provided.
How does CO PFMLI define “family member” for purposes of qualifying leave?
The definition of family member under CO PFMLI includes a grandparent, grandchild or sibling (whether a biological, foster, adoptive or step relationship) of the individual or individual’s spouse or domestic partner; or 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 much will eligible employees receive under the Program?
The weekly benefit depends on an employee’s average weekly wage (AWW) compared to the state average weekly wage (SAWW). The SAWW is established by the Division of Workers’ Compensation each year.
Employees earning an AWW equal to or less than 50% of the SAWW will receive a benefit amounting to 90% of their AWW. The portion of the individual’s AWW that is greater than 50% of the SAWW will be replaced at a rate of 50%.
Do employers need to notify their employees about the Program?
Employers must post the official notice (to be made available by the Division at a later date) in a prominent location in the workplace. Employers must provide the program notice to their employees upon hire, and upon learning that the employee is experiencing a qualifying PFMLI absence.
Do employers need to continue health benefits during CO PFMLI leave?
Yes. CO PFMLI is considered protected leave and employers must maintain healthcare benefits throughout the protected leave.
Are employees entitled to job restoration upon return from CO PFMLI leave?
Yes. An eligible individual that takes CO PFMLI leave is entitled to be restored to the same or equivalent position.
How will CO PFMLI interact with the FMLA?
Benefits under CO PFMLI and FMLA run concurrently where the leave qualifies under both laws.
How will CO PFMLI interact with an employer’s existing paid leave policies?
Employers are prohibited from requiring the use of any accrued paid time off prior to, or concurrently with, CO PFMLI leave. On the other hand, both an employee and employer may agree to use accrued paid time off under an employer’s existing policy to top off their pay (up to 100% of their AWW) while on CO PFMLI leave.
Is there a Private Plan Exemption if employers offer leave benefits as good as those provided under the Program?
Yes. An employer may offer a private plan with the same rights, protections and benefits provided to employees by CO PFMLI with approval from the Division of Insurance. We do not have information yet about this process or about which carrier insurance policies have been approved.
Regulations and guidance from the Division are forthcoming and this article will be updated as we learn more about the Program and how it will be implemented.
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved