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.
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:
Employees are eligible for PFML benefits if they meet the following criteria:
In addition, the following groups are covered under the new PFML program:
The following groups are not covered by the program:
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.
Once the PFML program goes into effect January 1, 2024, covered employees may be able to take leave for the following purposes:
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:
Safe leave may be granted if the employee or a family member has been the victim of:
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:
Employees may be entitled to the following benefits as part of the PFML program:
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.
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.
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:
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.
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.
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:
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.
Please contact us today to schedule a consultation.
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