In November 2020, Colorado voters approved Proposition 118, the Paid Family and Medical Leave Insurance Act. The Act provides up to 12 weeks of paid family and medical leave with an additional four weeks of leave due to pregnancy related or childbirth related complications. While leave will not become available until January 1, 2024, funding begins January 1, 2023.
Of particular note, regulations issued on August 26, 2022, effective October 15, 2022, clarifies the following:
Paid leave benefits
An individual is eligible if they earn $2,500 in wages in a base period (four of the last five completed calendar quarters) from any Colorado employer, it need not be the same employer. Leave entitlement is based on a rolling 12-month period measured backward from the need for leave.
Applying for benefits
An individual will apply for family leave through the Family and Medical Leave Insurance (FAMLI) Division unless the employer offers a private plan. Applications may be submitted up to 30 days prior to the benefit start date.
The covered individual must include supporting documentation with his/her application based on the type of leave requested. If additional information is needed, the Division will make a reasonable effort to obtain the additional information from the claimant. An application will not be considered until all information is received.
Notice to employer
The FAMLI Division will notify the employer that an individual has made application for leave. The regulations make it clear that the employer can establish its own procedures requiring notification from the employee as long as the procedures are consistent with the statute.
An employer may require the notice to contain the anticipated start time, duration, and frequency of leave.
Employers must register with the FAMLI Division via MyFAMLI+ Employer by January 1, 2023.Employers should keep an eye out for the MyFAMLI+ Employer portal that is expected to launch in the fourth quarter of 2022.It is through this portal that the employer will pay the premium. As a reminder, the program is funded through a payroll tax paid by employers and employees in a 50/50 split. Note: employers with fewer than 10 employees need not contribute, the employee can be required to pay the full amount.
An employer may offer a private plan as long as the plan provides at least as generous benefit as the Colorado law requires and the employee cannot be required to pay more than would be required under the state program.
The FAMLI Division has issued proposed rules for private plans. A public hearing for these proposed rules will be held on October 10, 2022.More information is expected after the hearing. The rules (summarized above) and proposed private plan rules can be found here.
Even if an employer intends to offer a private plan, it needs to begin contributing January 1, 2023.The employer will receive a refund once its private plan is approved.
Employers employing individuals in the state of Colorado will want to keep an eye on the Colorado Family and Medical Leave Insurance Program website.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.