By Mary L. Will, Erik Mosvick and Taylor N. Brook
Faegre Drinker Biddle & Reath LLP
Colorado’s long-anticipated Family and Medical Leave Insurance (FAMLI) program is right around the corner for employee use — but employer requirements are already here. Effective Jan. 1, employers have certain obligations under the FAMLI program, including notice requirements and upcoming premium payments. Below is a refresh on FAMLI program basics, an outline of current FAMLI program requirements, considerations for the upcoming months in preparation for 2024 and some additional information regarding private FAMLI programs.
Remind Me About the FAMLI Program…
By ballot measure in November 2020, Colorado voters approved a state-run paid family leave program. This is now codified as the Colorado Paid Family and Medical Leave Insurance Act. Starting January 2024, most Colorado employees will be eligible to apply for FAMLI leave benefits and receive compensation from the state to take protected time off work for family and medical needs for themselves or family members. The FAMLI program is similar to other paid family leave programs instituted or upcoming in other states, such as California, New York and Washington.
Under the act, a covered employer has the same definition as set forth in the federal Fair Labor Standards Act, which is “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The only difference is an employer under the Colorado act includes the state and its agencies or entities, cities and counties, municipalities, school districts and any political subdivisions of the state.
The FAMLI program will be financed through payroll premiums, and all Colorado employers are required to facilitate the collection of FAMLI premiums for their Colorado employees through a payroll deduction. The employee share of FAMLI premiums is set at 0.45% of employee wages. Employers with 10 or more employees are also required to pay 0.45% of their Colorado employee’s wages as FAMLI premiums.
Is There Anything Employers Need to do Right Now?
As of Jan. 1, Colorado employers are required to register with the Colorado Department of Labor and Employment’s division for the FAMLI program. Employers can register with the FAMLI division here.
Also as of Jan. 1, Colorado employers need to post the FAMLI program notice.
Colorado employers also now have the obligation to collect FAMLI insurance premiums from employee wages. If employers have not already done so, they may want to consider how to communicate with employees about the FAMLI deductions that will be taken from their wages.
Done; Now What?
Employers must remit payment of FAMLI premiums to the state on a quarterly basis. Accordingly, the first round of premium payments is due March 31. There is a 30-day grace period, however, allowing payment by no later than the last day of the month immediately following the end of the calendar quarter for which the premiums have accrued. In addition to premium payments, employers will also be required to submit wage reports to the FAMLI division at this time.
Employers may also want to consider how FAMLI may interact with employer policies (such as employee handbooks and leave policies) and benefits and how employers will prepare for employee eligibility starting January 2024.
Is There an Option Besides the State Plan?
Yes. Employers can implement a private paid family and medical leave program for their employees. There are many conditions that a private plan must meet, including providing the same benefits as those offered under the FAMLI program. Additionally, a private plan must obtain approval from the State of Colorado before the employer can opt out of FAMLI obligations.
When in doubt, it’s best to consult with a labor and employment lawyer.
– Mary L. Will is deputy general counsel and a labor & employment partner at Faegre Drinker, and Erik Mosvick and Taylor N. Brook are labor & employment associates.
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