The Latest State to Join the Paid Leave Trend: Colorado Passes Paid Family and Medical Leave

On November 3, Colorado voters approved Proposition 118, the Paid Family and Medical Leave Insurance Act.  The measure provides 12 weeks of paid family and medical leave funded through premium contributions paid for equally by employers and employees. Employees may be entitled to an additional four weeks of leave for pregnancy or childbirth complications. Premiums will begin on January 1, 2023, and benefits will be available on January 1, 2024.

The new law contains the following provisions:

Covered Employers: Employers are covered by the new law if they 1) employ at least 1 employee during each of 20 workweeks in the current or preceding calendar year or 2) paid wages of $1,500 or more during any calendar quarter in the preceding calendar year.

Employee Eligibility: Workers are eligible for leave after earning $2,500 in wages during their base period (the first four of the last five completed calendar quarters immediately preceding the first day of the individual’s benefit year). Employees are entitled to job protection after they have been at their current job for at least 180 days.

Length of Leave:  Employees are entitled to 12 weeks of leave, with an additional 4 weeks for qualifying pregnancy or childbirth complications. Leave can be taken intermittently in 1-hour increments (or less, depending on employer policy). Benefits are payable once the employee has accumulated 8 hours of leave.

Covered Leave Reasons: An employee can take leave:

  • to bond with a new child, through birth, adoption, or foster care;
  • to care for a family member with a serious health condition;
  • due to the employee’s own serious health condition;
  • for a qualifying military exigency; and
  • for safe leave – leave needed due to sexual assault, stalking, sexual assault, or abuse

Covered relationships for family members: A family member includes a child, parent, spouse or domestic partner, grandparent, grandchild, sibling, or any person with whom the employee has a significant personal bond like a family relationship.

Benefits: Employees are entitled to 90% of their pay that is equal to or less than half the state Average Weekly Wage (SAWW), and 50% of the amount that exceeds it, up to 90% of the SAWW. For 2024, the maximum weekly benefits is capped at $1,100, but will adjust as the state average weekly wage changes.

Premium: Employers and employees each pay 0.45% of an employee’s wage as premium. The average Colorado employee will pay $3.83 per week.

Small Business Exemption: Small businesses with fewer than 10 employees are exempt from paying the employer portion of the premium, but their employees are still covered by the law.

Private Plans: Employers can offer a private plan (self-insured or insured) to fulfill their obligation under the new law. The private plan must meet minimum requirements and offer the same rights, protections and benefits provided under the state plan.  If an employer already offers paid family and medical leave that is equivalent to the program, the employer can utilize their existing plan.

Concurrency with FMLA or STD plan: Leave taken under the new law will run concurrently with FMLA. An employer can require that the CO PFML benefits coordinate with a disability policy if the employer provides written notice. An employer cannot require an employee to use or exhaust any accrued vacation leave, sick leave, or other paid time off prior to or while receiving family and medical leave insurance benefits. However, an employee and an employer can mutually agree that the employee may use any accrued vacation leave, sick leave, or other paid time off while receiving family and medical leave insurance benefits up to the amount of the employee’s average weekly wage

Effective Dates: The program will begin collecting premiums in January 2023. Workers will be able to apply for the benefit beginning in January 2024.

What is FINEOS doing to prepare for the new law? The new law requires the newly created Division of Family and Medical Leave Insurance to adopt initial Rules and Regulations for implementation of the law by January 1, 2022.  As FINEOS does with the other Paid Family and Medical programs in the process of implementation, we will stay engaged in the regulatory process. FINEOS Absence will be prepared to support the Colorado Paid Family and Medical program by the January 2024 program start date.

Reference: public Colorado 2020 State Ballot Information Booklet

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