Starting in 2024, Colorado employees will be able to receive 12 weeks of paid family or medical leave provided by the state through Colorado Department of Labor and Employment.
The Family and Medical Leave Insurance program was voted on in November 2020 as part of Proposition 118. The FAMLI program ensures all employees have access to paid leave to take care of themselves or family members. People can use FAMLI for instances such as care for a new child, care for themselves, care for a family member’s serious health condition, making arrangements for a family military deployment or addressing safety needs and the impact of domestic violence or sexual assault.
“A good way to think about it is, every employer per this ballot measure, will need to have paid family leave whether you participate in the state plan or choose to be a self-insurer or purchase a private plan on the market,” said Department of Labor and Employment spokeswoman Cher Haavind.
The program has taken a while to get started because the ballot did not come with general funding, Haavind said. The Department of Labor and Employment did receive just less than $2 million to start staffing the program in 2021. This includes hiring between 200 and 300 staff members.
Employees who are eligible for paid leave are those who’ve earned at least $2,500 in wages over a one-year period. Both employers and employees will contribute to the program. Employees will designate 0.45% of their wages and employers will provide a matching amount. This rate is set through 2025 in accordance with Proposition 118. After 2025, the rate will be set each year, however, the combined rate is statutorily capped at 1.2%.
“Let’s say somebody earns $50,000 a year. If it’s a shared contribution between the employee and the employer, it comes to about just over $4 a week owed from both the employee and the employer,” Haavind said.
Employers may opt out of the program if they offer a privately funded paid family leave plan comparable to FAMLI. Employees eligible will receive up to 12 weeks of paid medical or family leave. An additional four weeks will be added for pregnancy or complications with child birth. Employees will not be required to use paid time off before taking leave under the FAMLI program.
Additionally, employees will be paid between 37% and 90% of their wages during time off, but it is capped at $1,100 per week. How much employees will earn during their paid leave is dependent on income.
“It’s a sliding scale based on wages. So the higher the wages, the lower the benefit, the lower the wages, the higher the benefit, up to 90% of one’s wages,” Haavind said.
Employers are not responsible for paying the paid family leave. Because the program is a social insurance, the state pays for the leave through a debit card or direct deposit. However, this part of the program has not fully been developed and discussions are forthcoming about how the paid leave will be distributed to the employee.
Because employers do not have to pay for the family or medical leave, employers are able to use the vacancy savings to hire a temporary employee.
Haavind said it will be comparable to how unemployment benefits are distributed. Employees and employer will begin paying the fee in January 2023. However, paid family leave will not be accessible until 2024 because the state needs time to let the FAMLI fund accrue.
However, the size of the employer is also a factor. If an employer has nine or fewer employees then that employer can remit the employees’ portion of the fee.
Haavind said she has traveled to three different locations in Colorado to speak about the program including on Aug. 10 in Durango. She said employers have concerns about private plans and benefit rules, which are being considered by the Department of Labor and Employment.
“In other words, our rules will say for private plans you must have a plan that does A, B and C because the law says it must meet or exceed the state’s plan,” she said. “And so the insurers don’t know what products to deliver until we’re complete with our rulemaking.”
Employers will be able to monitor claims related to family and medical leave. The Department of Labor and Employment is creating technology that will notify an employer when an employee files a claim, provide information as to an anticipated return to work date based on the nature of the claim, facilitate an appeals process for employers and provide any other available documentation. The technology will be available before January 2024.
Employers will create an online account with the Department of Labor and Employment that will share the number of employees they have, wage reports and how to manage premiums paid to the state for the FAMLI program.
“Our goal is to just let employers know that this fall, we really are looking for folks to watch for updates from us on how to get into the system, and create their account,” Haavind said. “We also want to create communications that they can share with their workers.”