Colorado has adopted a second set of Family and Medical Leave Insurance (FAMLI) program regulations for private employers and self-employed individuals and developed a dedicated website. The voter-approved law (CO Rev. Stat. § 8-13.3-501-524) will provide eligible employees with partial wage replacement for 12–16 weeks of leave, depending on the circumstances. Employees will be able to take paid leave for many of the same reasons permitted under the federal Family and Medical Leave Act (FMLA). The program also will extend paid leave so victims of domestic violence, sexual assault or stalking can handle related issues.
Newly adopted rules (7 CCR 1107-1) define wages on which premiums will be based and outline employers’ obligations for collecting and remitting those premiums. Employers with fewer than 10 employees, participating self-employed individuals and certain government employers will be exempt from the employer contribution, but must continue to collect and remit employee contributions. In 2023, employers will have to remit quarterly premiums by the end of the first month after each calendar quarter. The Colorado Department of Labor and Employment (CDLE) will determine an employer’s size for premium collection for all quarters of 2023 using the employer’s first-quarter unemployment insurance reports. In later years, regulators will base employer size on the preceding calendar year.
CDLE will notify covered employers of required premium amounts at the start of the month when the premium is due. Employers may opt to have their payroll vendor or other representative receive the notice, which may be electronic or sent by mail. CDLE will post online a schedule of due dates and instructions for remitting premiums. Employers not subject to a premium liability due to coverage through an approved private plan will not receive quarterly notifications of premium liability from the CDLE.
The law applies based on where an employee works, regardless of residence. Under the rules (7 CCR 1107-1.5.6C), an employee’s wages will be subject to premiums for all services performed within and outside of Colorado where:
1. The employee’s entire service is performed within Colorado; or
2. The employee’s service is performed both within and outside of Colorado, but the service performed outside of the state is incidental to the employee’s work within Colorado— for example, is temporary or transitory in nature and consists of isolated transactions; or
3. Services are not localized in any state, but some of the services are performed in Colorado, and
A. The base of operations is in Colorado, or if there is no base of operations, then the place from which services are directed or controlled is in Colorado, or
B. The base of operations or place from which some part of the service is directed or controlled is not in any state in which part of the service is performed, but the individual's residence is in Colorado.
The website provides FAQs that in part address contribution rates, remitting premiums, eligibility and duration of leave. Beginning Jan. 1, 2023, contributions of 0.9% of an employee’s covered wages up to the Social Security contribution limit will be split equally between employees and employers. Starting in 2025, the state may adjust the contribution rate (up to 1.2% of wages) each year based on the funds balance and usage rates.
Adopted rules (7 CCR 1107-2) provide a process for local government employers to decline participation in the program. Local government employers are required to notify the CDLE in writing of the decision to decline participation in the FAMLI program. The local government’s ability to decline participation (or to re-participate) is subject to a vote by its governing body. Employees of local governments declining participation are permitted to voluntarily elect coverage as individuals at the 0.45% contribution rate, and the declining employer is responsible for submitting the premiums on a quarterly schedule.
Employers with Colorado workers will need to establish a process for collecting and remitting contributions for the FAMLI program. While employers will have the opportunity to opt out of participation in the state-run program by obtaining approval for a private plan, no specific guidance is available so far on those requirements. Employers looking to establish a private plan should continue to monitor the regulation page for any updates. Those with established paid leave programs that don’t opt for a private plan will need to determine how to coordinate the state program with their existing plans. Multistate employers may need to establish a process for coordinating with other states offering similar programs.