New Colorado Paid Family Leave Laws: What You Need to Know
February 17th, 2021
This past November, Colorado passed Proposition 118, which established a statewide paid family and medical leave (PFML) insurance program. Funding for the program will begin in January 2023, and employees can begin using PFML benefits as of January 2024. The state is creating a new Division of Family and Medical Leave Insurance to oversee the program.
Below is an overview of the important points to know regarding the new Colorado PFML program. Premier Employer Services is happy to answer any questions you may have so that you understand how this new program will impact your business and your employees. We’ll keep you posted as additional regulations are established so that you understand what needs to be done to remain in compliance with the new law.
Who Is Covered by Colorado’s PFML Program?
All employers, including state government agencies, who pay wages of at least $1,500 during any calendar quarter in the previous year are covered by the new PFML program. However, federal government agencies are not covered by the law. You may opt out of the program if you meet one of the following criteria:
- You employ fewer than 10 people
- You have an approved private plan
- You’re a local government agency
Employees are eligible for PFML benefits if they meet the following criteria:
- They perform services or labor for the benefit of another
- They earned a minimum of $2,500 in the first four of the previous five calendar quarters prior to the first day of their benefit year
In addition, the following groups are covered under the new PFML program:
- Migratory laborers
- Workers who aren’t governed by the common law relationship of master and servant
- Self-employed individuals (you must opt in)
- Employees of local government agencies that opted out of the program (these employees must opt in)
The following groups are not covered by the program:
- Individuals who are mainly free from control and direction in the performance of their services or labor
- Individuals who are engaged in an independent occupation, trade, business or profession related to the labor or services they perform
- Employees covered by the federal Railroad Unemployment Insurance Act
Paid Family and Medical Leave Program Details
Eligible employees can take up to 12 weeks of leave per year. This amount of time increases to 16 weeks if the leave is being taken due to a serious condition related to complications with pregnancy or childbirth. It’s also possible to take shorter periods of leave in one-hour increments. However, employees will not be able to receive benefits until they’ve accumulated at least eight hours of leave.
Permitted Uses for Paid Family and Medical Leave
- To care for a new child during the first year after the birth, adoption or foster care placement of a child
- To care for a family member suffering from a serious health issue
- When the employee is suffering from a serious health issue
- For a qualifying military exigency
- If the worker has a need for safe leave
Serious Health Condition
The PFML law defines “serious health condition” as an illness, injury impairment, pregnancy, recovery from childbirth, or physical or mental condition that requires inpatient care from a hospital, residential medical care facility, hospice, or continuing treatment by a healthcare provider.
Qualifying Military Exigency
Qualifying military exigency leave is granted for needs associated with an employee’s family member’s active-duty service in a branch of the military. This leave may be necessary due to one or more of the following reasons:
- Providing for the care of the military member’s family
- Making legal or financial arrangements for the military member
- Attending counseling
- Attending military ceremonies or events
- Spending time with the military member following return from deployment or during a rest and recuperation leave
- Making arrangements after the death of a military member
Safe leave may be granted if the employee or a family member has been the victim of:
- Domestic violence
- Sexual assault
Providing Notice for Leave
Employees must provide a minimum of 30 days’ advance notice when the leave is foreseeable. If the leave is not foreseeable, the employee must provide notice as soon as possible. Employees must also make a reasonable effort to prevent the disruption of business operations while they are on leave.
Employers must perform the following actions to ensure employees are aware of all PFML program details:
- Post a notice created by the Division of Family and Medical Leave Insurance in a prominent location in the workplace
- Provide employees with written notice about the program details upon hiring and when an employee has experienced an event that is eligible for PFML benefits
- 90% of the part of their weekly wage that is equal to or less than 50% of the state average weekly wage (SAWW)
- 50% of their weekly wage that exceeds 50% of the SAWW
PFML benefits cannot exceed 90% of the SAWW. If the leave begins before January 1, 2025, weekly benefits will be capped at $1,100. In addition, employees may be able to take leave from multiple jobs.
Employer and Employee Contributions to PFML Insurance
The PFML program is funded by a combination of employer and employee contributions. These contributions will be split evenly between employers and their employees, and premiums will begin being made to the state program on January 1, 2023. Employers must pay 0.45% of each eligible employee’s wages, and the employee will pay a matching 0.45% via a wage deduction. Employers with fewer than ten employees are exempt from contributing to the funding of this program. Employers may pay the entire 0.9% of the cost themselves if they choose to do so.
Starting in 2025, the director of the Division of Family and Medical Leave Insurance will establish the annual premium rate. This rate may be set as high as 1.2% of each employee’s wages.
Employee Job Protection
Employees who have worked for their current employer for at least 180 days prior to taking leave are entitled to retain their position, or an equivalent position, once they return to work. In addition, employees are entitled to receive comparable benefits, salary and terms of employment when they return from leave.
Employers must maintain healthcare benefits for employees while they are on leave, if they are offered, and employees will be required to continue paying their portion of these benefits based on the terms of their employment. However, employees will not accrue employment or seniority benefits while they are taking leave.
In addition, employers are not allowed to:
- Interfere with or deny PFML rights to an employee
- Retaliate or discriminate against an employee who files for PFML benefits
- Consider PFML as an absence that triggers discipline, demotion, suspension, discharge, or any other negative consequence
Use of PFML Benefits in Association with Other Policies
PFML leave will run concurrently with FMLA leave. Employers may also require that PFML leave and payment of benefits run concurrently with benefits offered under another disability policy or time off bank established for the purpose of family and medical leave. However, employers must communicate this requirement to their employees in writing.
Employees cannot be forced to use sick leave, vacation time or other paid time off before or while receiving PFML benefits. The one exception to this rule arises when the aggregate amount an employee would receive exceeds their average weekly wage.
PFML Exemptions for Private Plans
Employers may be exempt from the new PFML program if they have a private plan that provides the same rights, benefits and protections as PFML. In order to be declared exempt, the private plan must be approved by the Division of Family and Medical Leave Insurance. Employers with a self-insured private plan must furnish a bond to the state. Third-party insurers providing private plans must be approved by the state.
Premier Employer Services Can Help You Navigate the New PFML Laws
The implementation of a new state-mandated benefits program can be complex and overwhelming. As part of the employee benefits services we offer, Premier Employer Services will help you navigate these new laws to ensure your company is compliant with all terms once the program rolls out in 2023.
We’re the only employee engagement and benefits company in the United States utilizing an Elevated Engagement Plus Approach™ focused on helping you create a more successful and inspired organization. As part of this unique approach, we will:
- Determine your specific organizational goals
- Understand your unique challenges
- Take the time to learn about your current workforce dynamic
- Created a customized program to help you succeed
When you work with Premier Employer Services, you benefit from having a dedicated partner with expert knowledge of all the pieces of the human resources puzzle. Whenever new programs such as PFML are implemented, we can guide you through the process to ensure your company is providing your team with all benefits required by law. By utilizing our expertise, your team is freed up to devote more time to the other important responsibilities associated with their job.
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