Colorado FAMLI Act Compliance Required

The first of many deadlines related to Colorado’s Family and Medical Leave Insurance (FAMLI) Act and the associated state program (FAMLI Program) has come and gone. As of January 1, 2023, all Colorado employers are required to post or otherwise provide employees with the state-issued FAMLI Program notice (published in English and Spanish by the Colorado Department of Labor and Employment), and also begin deducting employees’ shares of FAMLI Program premiums from employee paychecks, where applicable.

Colorado employers who have yet to comply with the above guidelines will want to contact an attorney as soon as possible to evaluate their eligibility status under the FAMLI Act and begin making necessary deductions, if needed.

Background

In November 2020, Colorado voters approved Proposition 118, authorizing the creation of a state-run fund to provide Colorado employees with up to 12 weeks of paid family and medical leave where leave is needed due to birth, adoption, family member care, self-care, exigency leave, or safe leave, as well as up to four additional weeks of paid leave related to pregnancy and childbirth.

Under the FAMLI Program, eligible employees may receive up to $1,100 in weekly FAMLI Program benefits for eligible leave starting in 2024, and up to 90 percent of the state average weekly wage rate for eligible leave taken thereafter. To fund these benefits the FAMLI Act established a state repository, which is funded, in part, by premiums paid into the fund by eligible Colorado employers and their employees.

For large employers (employers with 10 or more employees), employee premiums are calculated on a per-employee basis and must equal 0.9 percent of an employee’s after-tax wages. Large employers may, however, pass on up to half of the FAMLI Act premium cost directly to their employees via regular payroll deductions equal to up to 0.45 percent of each employee’s after-tax pay. Employers who wish to take advantage of this option must begin deducting premiums on January 1, 2023, and collect these amounts until the end of Q1, after which the employer must remit the premiums to the state fund via the FAMLI+ Employer Portal. Thereafter, employers must remit FAMLI Act premiums on a quarterly basis at the end of each fiscal quarter.

Small employers (employers with fewer than 10 employees), owe premiums equal to 0.45 percent of employees’ after-tax wages, all of which a small employer may deduct from its employees’ paychecks—essentially sparing the small employer from paying any premiums into the fund.

While in all cases employees may not contribute more than 0.45% of their after-tax wages, there is no language in the statute limiting the amount an employer may contribute, and indeed, all employers (large and small) may choose to pay all or some of the employee’s share of premiums on their behalf. In the event an employer elects to pay all of its employees’ FAMLI premiums, the employer need only calculate the applicable premium amount (0.9 percent of wages for large employers, and 0.45 percent of wages for small employers), and remit the amount to the state fund at the end of each fiscal quarter.

Importantly, employers who offer paid family and medical leave benefits equal to or greater than the benefits provided by the FAMLI Program may begin applying for FAMLI Program exemption when the private plan application becomes available in Q1 of 2023. Employers who apply for and are granted exemption by January 1, 2024, will receive a refund of all premiums paid into the FAMLI Program fund in 2023, minus the exemption application fee. Employers seeking reimbursement must apply for exemption on or before October 31, 2023.  

Employers may learn more about the FAMLI Program and sign up for a FAMLI+ Employer Portal here.

FAMLI Program Employer Checklist

• Review the Colorado Department of Labor and Employment’s FAMLI Employer Toolkit
• Register for the Colorado FAMLI Program Employer Portal
• Post and/or send via e-mail the required FAMLI Program Notice (available here in Spanish)
  • Optional: Provide employees with the FAMLI Paycheck Stuffer
• Begin deducting employees’ shares of premiums (up to a maximum of 0.45 percent of employees’ wages) via payroll deductions starting on January 1, 2023 (or as soon as possible thereafter), if necessary
• Review private plan requirements and exemption application process if seeking private plan exemption in 2023

Upcoming FAMLI Program Deadlines

April 30, 2023: Q1 premium payment deadline

May 30, 2023: Grace period/extended deadline for payment of Q1 premiums

July 31, 2023: Q2 premium payment deadline

October 31, 2023: Q3 premium payment deadline

October 31, 2023: FAMLI Program private plan application deadline

January 31, 2024: Q4 premium payment deadline

Ballard Spahr regularly assists business clients in complying with state and federal employment laws. We currently are advising clients on meeting their obligations under the FAMLI Act. For more information, please contact us.

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