Colorado voters did what the Colorado legislature could not do – pass a statewide paid family and medical leave (PFML) program! By a 57-to-43% margin (with 85% of votes tallied), a majority of Coloradans voted to create a paid leave program so that employees will not have to choose between their job and caring for a new child, a sick family member, or themselves.
Colorado’s is the first voter-approved PFML program in the country. The Centennial state becomes the twelfth U.S. jurisdiction to pass a paid medical and/or family leave program; the others were enacted through state legislation rather than a ballot initiative. Paid disability/medical or family leave is currently mandated in California, Hawaii, New Jersey, New York, Rhode Island, Puerto Rico, Washington, and the District of Columbia, with programs in Massachusetts, Connecticut, and Oregon still being implemented. Here are the highlights of the Colorado PFML program.
Colorado Paid Leave Reasons
The Colorado PFML program will allow employees to take paid time off 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 placement for foster care of a new child;
- caring for a family member with a serious health condition;
- assisting a family member who is on active duty military service or is called for active-duty military service; and
- safe leave when the employee or the employee’s family member is a victim of domestic violence, stalking, or sexual assault.
Covered family members under the program include the employee’s child, parent, spouse, domestic partner, grandparent, grandchild, sibling, or any individual with whom the employee has a significant personal bond that is like a family relationship. This definition of covered family members is vastly broader than those covered under the federal Family and Medical Leave Act (FMLA).
Colorado Paid Leave Benefits
Eligible Colorado employees will be entitled to take up to 12 weeks of paid family and medical leave with an additional four weeks of leave allowed for employees with a serious health condition related to pregnancy or childbirth complications, totaling up to 16 weeks of PFML per year. Leave can be taken in a continuous block of time or intermittently.
The amount of the weekly benefit is based on the employee’s average weekly wage (AWW) as compared to the state average weekly wage (SAWW). Individuals would receive 90% of their AWW for the portion of their wages that are less than or equal to 50% of the SAWW, and 50% of the portion of their wages that exceeds 50% of the SAWW. The maximum benefit is capped at $1,100 per week for 2024. The maximum weekly benefit in 2025 is estimated to be $1,253 per week (90% of the SAWW, which is estimated to be $1,392 per week).
Colorado PFML leave will be job protected for employees who have worked for their current employer for at least 180 days prior to taking leave. Employees must be returned to the same position or a position with equal seniority, status, benefits, and pay. In addition, employers may not discipline or take retaliatory actions against employees for requesting or using paid leave.
Eligibility Requirements for Colorado PFML
Employees will be eligible to take PFML after earning at least $2,500 in wages during a specified “base period.” There does not appear to be an eligibility requirement for hours worked or length of service. Job protection kicks in after the employee has worked for his/her current employer for 180 days.
State employees and employers are covered by the program, whereas federal employers and employees are excluded. Local government employers in Colorado may decline participation in the PFML program, but their individual employees may opt-in. Self-employed individuals may also opt-in to participation in the program.
Funding for CO PFML Program
Both employers and employees will contribute to fund the Colorado PFML program. The initial premium rate is set at 0.90% of wages per employee (subject to a cap) in the program’s first two years, with a 50/50 split paid between employers and employees. Employers with nine or fewer employees will not be required to pay the employer portion of the premium but must withhold and forward their employees’ premium portions to the program.
Private plans will be permitted in lieu of participation in the state-administered plan subject to approval by the state. Private plans must offer equivalent or greater rights, protections, and benefits than the state-administered plan. Both self-insured and insured private plans will be permitted.
Effective Dates for CO PFML
January 1, 2023: Contributions into the program begin.
January 1, 2024: Benefits begin.
What Employers Should Know about Colorado PFML
Employers with employees in Colorado will need to begin preparing for this new PFML program in addition to implementing policies and procedures to comply with the state’s new paid sick leave law.
Importantly, employers will need to decide whether to establish a self-insured private plan, purchase an insured option, or collect and remit contributions allowing employees to participate in the state-administered plan. While premium contributions do not begin until January 1, 2023, employers would be wise to begin analyzing existing company plans to identify departures from what is required by the new Colorado PFML program in areas including eligibility criteria, leave reasons, length of leave offered, magnitude of wage replacement benefits, categories of covered family relationships, and permissibility of intermittent leave usage.
Employers may need to seek legal counsel to: help sort through thorny concurrency issues; draft precise policy language addressing contingencies such as concurrency of leave under company policy and state and federal laws, benefits offsets, and leave stacking; and determine whether implementing an insured or self-insured private plan or utilizing the state-administered option would work best for their workforce. Considerations should include location of employees, potential desire for uniform PFML benefits across a multi-state footprint, interest in offering benefits that exceed what is available under the state-administered plan, financial resources and ability to furnish a sufficient surety bond to the state in support of a self-insured private plan, and the employer’s level of sophistication and ability to take on (or outsource) the administrative tasks associated with creating and keeping a private plan compliant with the new law.
In addition to updating handbooks and employee manuals to reflect the change in law and associated expansion of rights and benefits afforded to Colorado employees, employers should develop and implement associated training for managers and human resources personnel tasked with receiving and managing leave requests. As the state establishes its PFML program and promulgates associated regulations, we also expect to see posting and notification requirements implemented, so employers should anticipate and prepare to comply through appropriate methods of communication.
ReedGroup will continue to analyze the requirements of the new PFML program and offer additional guidance as the program is developed, so please stay tuned and sign up for our blog and webinar email alerts to receive timely updates on Colorado PFML and other leave law developments.
Information provided on this blog is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.