Gov. Jared Polis on July 14 signed the Healthy Families and Workplaces Act, which requires Colorado employers to provide annual paid sick leave as well as paid leave for coronavirus-related absences.
Starting in 2021, employers with 16 or more employees are required to provide up to 48 hours of paid sick leave annually to workers, who begin accruing the sick leave upon employment at a rate of one hour per 30 hours worked. Smaller employers will have until Jan. 1, 2022 to start providing paid sick leave.
Employees may use the paid sick leave as it accrues and may carry unused sick leave forward to future calendar years. The leave may be used to cover an employee’s own illness and treatment or for caretaking duties related to a family member’s illness or school closures due to a public health emergency. Employees can also use the leave to seek care or services if they or a family member have been the victim of domestic abuse, sexual assault or harassment.
The law’s coronavirus-specific provisions, effective immediately, require employers to provide paid sick leave through the end of 2020. The HFWA requires employers to offer paid leave to cover pandemic-related absences for the amount of time and reasons required under the Emergency Paid Sick Leave Act of the Families First Coronavirus Response Act. While EPSLA does not cover private employers with 500 or more employees, Colorado employers of all sizes must comply with the COVID-19 provisions of the HFWA.
EPSLA gives full-time employees up to 80 hours of paid sick leave for those unable to work because they are sick or quarantined due to COVID-19, caring for a sick or quarantined person or caring for a child whose school or childcare provider is closed due to the pandemic. Under EPSLA, part-time employees are covered for the number of hours they would normally work in a two-week period.
In the event of future public health emergencies, the HFWA will require Colorado employers to provide additional paid sick leave to supplement the hours employees have already accrued. Those time requirements mirror the amounts outlined in EPSLA: 80 hours for full-time employees, and the typical amount worked in a two-week period for part-timers.
Before the HWFA, about 40% of Colorado employees had no access to paid sick leave. While that leaves a sizeable chunk of employers who already offer sick leave, they’ll need to check their policies to make sure they comply with the new law.
“I represent a broad variety of industries and I don’t have a single client who doesn’t offer some form of PTO,” said Christine Samsel, shareholder at Brownstein Hyatt Farber Schreck. But even employers with generous paid leave policies don’t always offer the benefit to part-time or temporary workers, she added. Those companies will have to make sure they’re offering sick leave for employees not currently covered.
Many employers offer paid time off that can be used for vacation, sick days or other absences, said Sherman & Howard member Brooke Colaizzi. But while sick leave doesn’t need to be paid out upon termination of employment, PTO does.
“Although the guidance on the new statute doesn’t particularly go into this situation, my belief is that if employers use their general PTO to cover the sick leave, they are in fact going to have to pay it out as PTO,” Colaizzi said.
“Employers are going to have to look at their policies and figure out … if they want to proceed with a general PTO policy or if they want to carve out a sick leave program for this particular requirement.”
According to Colaizzi, the HWFA’s carryover provision has caused some confusion among employers. The statute requires up to 48 hours of unused sick leave to be carried over from year to year, but it also allows employers to cap usage at 48 hours per year.
“The question that I’ve gotten is: Why are we carrying it over? If the employer can cap it, why are we not just requiring 48 hours a year, period?” she said. She’s not sure of the answer, but she said it’s important employers understand how the carryover and cap work together and that they are allowed to limit use to 48 hours annually.
Samsel said that, compared to other jurisdictions with sick leave requirements, Colorado’s law is a bit unusual in that it doesn’t require a waiting period for using paid sick leave once it has accrued. “Even California, which is very employee friendly, has a 90-day waiting period” during which employees may accrue sick leave but aren’t allowed to use it, she said.
There are also considerations employers should keep in mind while the COVID-19 provisions remain in effect. Employers subject to the leave requirements under the FFCRA will want to be aware of the differences between the federal and state laws and how they interact.
For example, Samsel said, the FFCRA provides for a tax credit but the Colorado law doesn’t. “To the extent that the leave is running concurrently… they may want to designate it as FFCRA leave for purposes of getting a tax credit,” she said.
Both the FFCRA and HFWA have record-keeping requirements. In order to get a tax credit for paid sick leave under the federal law, employers must have appropriate documentation, Samsel said, and if an employee fails to provide the documentation, the employer can deny the leave. However, she added, the state law “doesn’t seem to have that same protection for employers.”
“This law says documentation is not required to take paid sick leave, but it can be required as soon as the employee reasonably can provide it,” she said. “So you’re already having to grant leave even in the absence of the documentation.”
Colorado’s new law allows employers to get credit for paid sick leave already given to employees earlier this year. But employers need to make sure conditions of the earlier leave match the requirements of the new law, Colaizzi said. For example, the employee must have received full pay when dealing with their own coronavirus-related illness or absence, and two-thirds pay if caring for a COVID-19 patient.
The guidance issued for the HFWA says that paid leave is not required if the entire business is closed but, Samsel said, it’s not clear where that leaves businesses that have opened but have workers on furlough.
“This language [in the guidance] makes it sound like even if the individual is furloughed, if the business is operating in any capacity, that individual may be entitled to paid leave,” she said.