Colorado PFML – Premium & Posting Requirements Begin 1/1/2023

Employers with workers in Colorado should start preparing for January 1, 2023, at which time they will be required to collect and remit premiums via payroll for the Colorado Family and Medical Leave Insurance program, the state’s paid family and medical leave program (CO FAMLI). Employers are also required to post a model notice of the CO FMLI program in a prominent location at each worksite by January 1, 2023. Employees can begin applying for CO PFML benefits on January 1, 2024.

CO PFML Background

The CO FAMLI program was passed by a majority of Colorado voters in 2020 and provides a state-administered income replacement program for Colorado workers to take time off of work for family leave, medical leave, and safe leave.

Covered Employers & Employees: Employers with at least one employee in Colorado for each working day during twenty or more workweeks in the current or preceding calendar year are covered under CO FAMLI. All employees working in Colorado (including remote workers) who earned at least $2,500 over the previous year for work performed in Colorado are covered under CO FAMLI, including full-time, part-time and seasonal employees.

Self-employed individuals may elect to participate in the CO FAMLI program by paying the required premium contributions to the state fund and reporting income for a minimum of three years.

Leave Types & Amounts: Employees will be able to take CO FAMLI for a total of 12 weeks for the different types of leave events outlined below. For certain pregnancy-related or childbirth complications, employees may be able to take up to 16 weeks.

• Family Leave: to care for a family member^[1] with a serious illness or injury, or to bond with a child in the first year after birth, adoption, or foster care placement.

• Medical Leave: to care for oneself when dealing with a serious illness or injury.

• Qualifying Exigency Leave: to make arrangements for a family member’s military deployment.

• Safe Leave: to care for oneself or a family member who is the victim of sexual assault, sexual abuse, domestic violence, harassment, or stalking.

Employees can take CO FAMLI in hourly increments on a continuous or intermittent basis, or in the form of a reduced schedule.

Benefits Effective Date: Employees can begin to apply for CO FAMLI benefits on January 1, 2024.

Benefit Amount: An employee’s CO FAMLI benefit amount will be based on the wages an employee earned in the previous five calendar quarters in relation to the average weekly wage for the state of Colorado. The maximum benefit amount an employee will receive will be 90% of the employee’s average weekly wage up to a weekly maximum of $1,100.

Premium Contributions: Starting January 1, 2023, employees and employers must contribute to the CO FAMLI state fund. The premium contribution rate is 0.9% of wages up to the Social Security wage base ($160,200 for 2023) and is set through 2025. The employee portion is 0.45% of employee wages and the employer portion is 0.45% of employee wages. Employers may choose to, but are not required to, pay the employee portion, full or in part, as a benefit for their employees.

Employers with 10 or more employees nationally are required to contribute to the CO FAMLI program. Employers with fewer than 10 employees nationally are not required to contribute but these employers still must collect and remit their Colorado employees’ contributions to the program.

Self-employed workers will only be responsible for paying the 0.45% employee share of the premium.

Employers need to submit to the Colorado Department of Labor and Employment (CDLE) both their share (if required as an employer with 10 or more employees) and their employees’ share of the premium through an online system at the end of each quarter, similar to how most companies submit their unemployment insurance.

Job Protection & Health Benefits Continuation: An employee’s job is protected when receiving CO FAMLI benefits if they worked for the same employer for 180 consecutive days prior to taking leave. Employers are required to maintain an employee’s existing health benefits at the same employee contribution amount while taking CO FAMLI.

Employee Notice: Employers may require employees to give notice when they will be taking CO FAMLI leave, When the need for leave is foreseeable, employers may require employees to provide notice 30 days before taking CO FAMLI leave. When the need for leave is unforeseeable, employees will have up to 30 days after the leave has begun to apply for FAMLI benefits.

Private Plan Option: Employers may satisfy their FAMLI obligations and opt-out of collecting and remitting CO FAMLI premiums by applying for approval of a private plan from the state. The private plan can be either a self-funded plan or a policy obtained by an insurance carrier, and must provide all of the same benefits, rights, and protections to employees as the state program at the same employee contribution rate. The initial administration fee to apply for a private plan will be $500. Employers with approved private plans will be responsible for an annual maintenance fee based on the administrative costs of their particular plan. A private plan approval will expire after eight years but employers will be required to submit more frequent data reporting and attestation requirements to the state.

Interaction with Other Leave

Employers cannot require employees to take sick leave or other employer-provided paid time off prior to using CO FAMLI benefits. Employers and employees can mutually agree that employees may supplement or "top off" their CO FAMLI benefit payments with sick leave or other paid time off in order to receive full wage replacement.

If the qualifying reason for taking CO FAMLI benefits also qualifies for unpaid leave under the federal Family and Medical Leave Act (FMLA), both CO FAMLI and FMLA leaves will run concurrently with each other.

Model Notice Posting

The CO FAMLI model notice can be accessed here. Employers are required to post the notice in a prominent location at each worksite by January 1, 2023 and send to employees (even remote employees) upon hire and when taking CO FAMLI.

The CDLE also released a CO FAMLI employer toolkit webpage, which includes a helpful payroll deduction notice document that employers might consider providing to their Colorado employees for January 1, 2023.

Next Steps for Employers

1. Premium contributions: Confirm payroll processing practices with payroll vendors in advance of the January 1, 2023 effective date for collecting and remitting premiums to the CO FAMLI state fund. As a reminder, employers with 10 or more employees nationally are required to contribute employer premiums to the CO FAMLI program for their Colorado employees. Also, employers may choose to pay the employee contribution portion, full or in part, as a benefit for their employees. This decision point for employers on whether to pay the employee contribution should be coordinated with payroll vendors in advance of January 1, 2023.

   Employers will need to register with My FAMLI+Employer, the Colorado employer reporting portal for CO FAMLI premium contributions, before the first quarterly premium payments are due on April 30, 2023. FAMLI is offering a 30-day grace period (reflected as May 31, 2023 in the employer My FAMLI+Employer dashboard) before payments will be considered late.

2. Private plan approval: The CDLE anticipates that the application process for private plan approval will begin sometime between the first and third quarter in 2023 and will provide formal guidance and instructions at that time. In the meantime, employers must collect and remit CO FAMLI premiums beginning January 1, 2023.

   Employers will be able to request a refund for CO FAMLI premiums paid in 2023 (minus the private plan administration fee) if they receive approval from the state for a private plan with an effective date on or before January 1, 2024. Employers with approved private plans effective after January 1, 2024 will not be eligible for reimbursement of premiums. The deadline to submit a private plan application in order to receive a refund for 2023 CO FAMLI premiums is October 31, 2023.

3. Model notice posting: Ensure the CO FAMLI model notice (accessed here) is posted in a prominent location at each worksite by January 1, 2023.

Risk Strategies is committed to keeping employers informed and up-to-date. Reach out to your Risk Strategies representative with questions or contact us at benefits@risk-strategies.com.

[1] Family members include spouses and domestic partners, children, parents, siblings, grandparents, grandchildren, and any individual with whom the employee has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.