This article is written by Margaret H Allen and Tayler G. Bragg from Sidley Austin LLP on January 30 2024
As of January 1, 2024, all Colorado employees are potentially eligible to take paid family and medical leave under the Colorado Paid Family and Medical Leave Insurance (FAMLI) Act. As a result, most employers will be required to allow their employees to take FAMLI Act leave, regardless of the size of the employer.
What is the benefit? The FAMLI Act provides eligible employees with up to 12 weeks of partial wage replacement benefits for qualifying family and medical reasons, such as caring for a new child or seriously ill family member or recovering from their own serious health condition. In some cases, employees may be entitled to an additional four weeks of benefits for complications from pregnancy or childbirth. The benefit amount varies depending on the employee’s average weekly wage in relation to the state’s average weekly wage. The maximum weekly benefit currently is $1,100.
How is FAMLI leave funded? The FAMLI Act is funded by payroll premiums that began on January 1, 2023. Employers are required to remit premiums to the state, but most employers are allowed to deduct up to 50% of the premium amount from their employees’ wages. The premium amount initially is set at 0.9% of each employee’s wages, but the state may adjust the rate annually. The actual payments will be made by the state agency, and the employer does not have to administer the payments.
Who specifically is eligible? Employees who have earned at least $2,500 in wages and have been employed by their current employer for at least 180 days generally are eligible for FAMLI benefits. Employees are required to file a claim with the state and provide documentation of their qualifying reason for leave. Employees also are required to give their employers at least 30 days’ notice of their intent to take leave or as soon as practicable if the leave is unforeseeable or if providing 30 days’ notice is not possible. For employers who were already subject to the requirements of the federal Family and Medical Leave Act (FMLA) (i.e., those who employed 50 or more employees in 20 or more workweeks in the current or preceding calendar year), FAMLI does not create new leave — it simply provides for partial wage replacement. However, unlike FMLA, FAMLI applies to all private employers regardless of size, provided the employer does not already provide employees with benefits equivalent or superior to benefits provided by FAMLI.
What obligations do employers have to employees taking FAMLI leave? Employers are required to maintain during the leave any healthcare coverage an employee has prior to taking the leave. Employers also must hold a position open for the employee and restore the employee to the position held when the leave commenced (or an equivalent position with equivalent employment benefits, pay, and other terms of employment). In addition, employers are prohibited from retaliating or discriminating against employees who exercise their rights under the FAMLI Act.
Can employers opt out of the FAMLI program or require employees to take FAMLI leave concurrently with other leave? Employers who already offer paid family and medical leave benefits that are equivalent or superior to the FAMLI benefits may apply for an exemption from the state program, subject to approval by the state. Employers who are not exempt may require their employees to take FAMLI leave concurrently with leave allowed under a disability policy or other paid family and medical leave policy, as long as the employer notifies their employees in writing of this requirement. In addition, FAMLI leave runs concurrently with leave taken under the federal FMLA. However, employers may not require their employees to exhaust any accrued vacation leave, sick leave, or other paid time off prior to or while receiving FAMLI benefits.
What are the penalties for noncompliance or retaliation against an employee for wanting to take FAMLI leave? An employer may be liable to the employee for wages and benefits, any actual monetary loss to the employee as a direct result of the violation (such as the cost of providing care, up to a sum equal to 12 weeks of employee wages), potentially that same additional amount as liquidated damages, equitable relief as may be appropriate (e.g., promotion or reinstatement), and attorneys’ fees and costs.
What else should employers know? The FAMLI Act has created significant new obligations and costs for Colorado employers as well as new rights and benefits for employees. Employers should review their current leave policies and practices and prepare for the changes by budgeting for the payroll tax, updating their employee handbooks and notices, and training their managers and human resources staff on FAMLI requirements and procedures. We are continuing to monitor the implementation and regulation of the FAMLI Act. Please do not hesitate to contact us if you have any questions or concerns about the FAMLI Act or any other employment law matters.
