State Issues New Regulations for the Paid Family Leave Insurance Program

In January 2022, the Department of Labor and Employment promulgated new rules relating to the state’s paid family and medical leave insurance (FAMLI) program. The regulations further define key terms relating to the collection and remittance of premiums into the program, as well as provide procedures for local governments to opt out of the program. In addition, the department posted FAQs on its website providing much of this information in a condensed format.

In 2020, voters passed the statute that created FAMLI. Starting on January 1, 2024, the program provides employees who work in the state and earn at least $2,500 at their jobs with up to sixteen weeks of paid leave for the following reasons:

• Caring for their own serious health condition.
• Caring for a new child during the first year after the birth or adoption or for foster care of a new child.
• Caring for a family member with a serious health condition.
• When a family member is on active-duty military service or is called for active-duty military service.
• When the individual or the individual’s family member is a victim of domestic violence, stalking or sexual assault.

This leave is designed to run concurrently with federal FMLA. Note that FAMLI allows employers to use a private plan rather than the state’s plan. To do this, the private plan must provide the same rights, protections and benefits as the public plan. Employers may require employees to contribute to the private plan, but no more than what they would have contributed to the state plan.

The leave is paid for through a fund to which employers with at least one employee in the state and employees working in the state contribute premiums. Starting on January 1, 2023, FAMLI requires employers to remit those premiums to the fund. The premiums take the form of a .9% payroll tax, split 50/50 between employer and employee. The new regulations define the wages that are subject to the payroll tax to include salary or hourly wages, commissions, payments on a piecework basis, bonuses or other forms of compensation (such as board, lodging or payments in kind). The department’s employer FAQs provide formulas for calculating premiums. Note that employers with fewer than 10 employees are not required to pay the employer share of the premiums (although they are still required to remit the employee share to the fund). Employers that report ten or more employees in the first quarter of 2023 will be required to pay the employer share of the premium for all calendar quarters in calendar year 2023.

The new regulations also require employers to remit the premiums on a quarterly basis. Self-employed workers can also participate in the program, and the new regulations outline the process they must use to do so, including a quarterly earnings report as well as quarterly remittance of premiums.

The fund sends payments directly to employees on FAMLI leave, and those payments are capped at $1,100 per week. Employers are not responsible for paying salary while an employee is on FAMLI leave. According to the department’s employer FAQs, employees are not required to use PTO before using FAMLI leave, but employers can allow employees to use PTO to “top off” the remaining balance of their weekly wage.

The new regulations also provide a process through which local governments can opt out of the FAMLI program. To do so, the rules require local governments to hold a vote after providing written notice that they will hold such a vote. If the local government votes not to participate, then it must provide its employees with written notice of the decision within 30 days, along with notice that employees can still opt into the program (participating in much the same way as self-employed workers do).

Employers in the state or with at least one worker in the state should be aware of the law and the new regulations. Further guidance and additional regulation are expected in the next year to clarify and administer the FAMLI program.

Colorado Paid Family and Medical Leave Insurance Act »
Regulations Concerning Paid Family Medical Leave Program (Premiums) »
Regulations Concerning Paid Family Medical Leave Program (Local Governments) »
Employer FAQs »