Starting January 1, 2023, Colorado employers must comply with Colorado’s Family and Medical Leave Insurance (FAMLI) Act, which requires nearly all employers and all employees to contribute to the state’s paid family and medical leave program.
FAMLI Benefits for Colorado Employees
Colorado’s FAMLI program will provide Colorado employees with up to twelve weeks of paid time off for certain qualifying life events, similar to federal Family and Medical Leave Act (FMLA) qualifying events. Qualifying events include:
- Caring for a new child;
- Caring for an employee’s own serious health condition;
- Caring for a family member with a serious health condition;
- Making arrangements for a family member’s military deployment; and
- Obtaining services in response to intimate partner violence, stalking, sexual assault, or sexual abuse.
Qualifying employees must have also earned $2,500 from any employer over the previous year for work performed in Colorado. FAMLI does not necessarily provide 100% of an employee’s salary while on leave. Employees will receive between 37% and 90% of their weekly wages, up to $1,100 per week, while on leave.
How is FAMLI Funded?
Similar to unemployment insurance, the FAMLI program is funded through employer and employee “premium” contributions. Colorado employers with 10 or more employees (regardless of where located) must contribute at least 0.45% of the employee’s wages each pay period and process the employee’s own .45% premium deduction for a total 0.9% of what the employee earns going to FAMLI. Employers may elect to cover more than half of the required premium as a benefit to the employee, but cannot contribute less. Employers and employees can estimate their premium liability here and view a sample paystub with FAMLI deductions here.
Private employers may apply for an exemption from FAMLI by submitting a private plan so long as it provides equal or greater benefits and protections than the FAMLI plan to all employees. Employers may choose to work with a private insurance company to manage their private plan or manage their own self-insured private plan secured with a surety bond. Any private plan must be approved by the Colorado Department of Labor and Employment’s Family and Medical Leave Insurance (FAMLI) Division before a company can be exempt from paying the above-described premiums. Until a private plan is approved, employers must pay premiums to the FAMLI Division. Once approved, the employer may seek reimbursement for those previously paid premiums.
FAMLI in 2023
- Be ready to collect premiums: Employers should communicate with their payroll departments or payroll company to verify that FAMLI premiums will be deducted beginning January 1, 2023.
- Notify employees: Employers need to inform employees about the FAMLI program by January 1, 2023. The required poster is available here and a sample paycheck stuffer/notice is available here.
- Register: Employers must register here with the FAMLI Division and remit premium payments by April 30, 2023.
- Consider plan options: Employers should discuss private plan options with their insurance brokers or financial planners or consider providing a self-insured private plan if that makes sense for the company.
Receiving FAMLI Benefits in 2024
FAMLI benefits become available to employees on January 1, 2024. Eligible employees will submit FAMLI requests through the FAMLI Division for benefits. The FAMLI Division will facilitate the entire application and payment process with the employee. While on leave, employees will be paid through the FAMLI program. Employers may supplement this payment if the employee requests that other available benefits, such as PTO or STD, supplement the FAMLI payments. Employees should provide employers notice of when they will be applying for FAMLI, but if they do not, the FAMLI Division will notify the employer of the employee’s request.
Employers can also start preparing for the full FAMLI program in 2024 by understanding the interplay of FAMLI and other protected leave and benefits.
- If an employee initiates FMLA leave, the employer must notify the employee of FAMLI benefits. FMLA and FAMLI are designed to run concurrently.
- Employees cannot be required to use paid time off (PTO) before or during their use of FAMLI, but can choose to do so with a written agreement between the employee and employer.
- Employers may count both the FAMLI wage replacement amount and the duration of FAMLI leave toward the limits included in their short-term and long-term disability policies, so long as written notice is provided.
If you have any questions about the new Colorado FAMLI program and employer obligations, please contact Melisa Panagakos at firstname.lastname@example.org.