Colorado Paid Family and Medical Leave Insurance Act
Premiums will be starting January 1, 2023. Now is the time to be preparing your business for the upcoming implementation. We will attempt to break it down for you but understand that we can not cover everything. Please verify all information to see if it pertains to you. There is too much information for one post so we will be breaking this down over a few posts. Please reach out to us if you have any questions.
Todays post will be an overview of the FAMLI Act. Additional posts will focus specifically on premiums, benefits, employer requirements, and private plans. Understanding the definition of some terms is extremely important and these are referenced throughout these. Employers (especially self-employed individuals or small businesses) that do not have their own HR or Payroll Dept) will need to know what is required of you!
Colorado's FAMLI Act (formerly known as Proposition 118) is a statewide family and medical leave insurance providing access to all Colorado employees, many of which may not have had access to before. Coverage will be available beginning January 1st, 2024 however premiums will begin January 1st, 2023.
Who must pay FAMLI premiums and who is exempt?
All Colorado employees and employers are required to pay premiums under FAMLI except
Self-Employed individuals : May opt into coverage and will only be responsible for employee portion of premium
Local government employers and employees if employer declines to participate : Employees may opt into coverage if employer declines participation and will only responsible for employee portion of premium
Employers with a Division approved private plan
**Note: Self-employed individuals and Local government employees who opt in to the FAMLI program must commit to an initial period of 3 years.
Employers will be responsible for sending the employer portion of premiums (if required) and employee portion via the 'MyFAMLI+ Employer' online system
Self-employed individuals and local government employees who opt-in to the FAMLI program will need to register on MyFAMLI+ and pay the employee portion
'MyFAMLI+ Employer' will be available by end of 2022 for registration
Premium payments will be due quarterly
Who is eligible to receive FAMLI benefits?
'Covered Individuals' who meet one of the following requirements:
Caring for a new child during the first year after birth, adoption, or placement of that child because of birth, adoption, or placement through foster care.
Caring for a family member with a serious health condition
Has a serious health condition
Qualifying exigency leave (leave based on the need arising out of a covered family member's active duty service or notice of impeding call or order to active duty in the armed forces)
Has a need for safe leave
Who is a 'covered individual'?
Any person who earned at least $2,500 in wages subject to premiums during:
the first four of the last five completed calendar quarters immediately preceding the first day of the individual's benefit year (base period)) or
the last four completed calendar quarters immediately preceding the benefit year (alternative base period)
2. Elects coverage and files a notice of election in writing ( self-employed individuals
and employees of a local government that has declined participation in the program)
3 . Submits an application with a claim for benefits
Who is considered a 'family member' under FAMLI?
Regardless of age, a biological, adopted or foster child, stepchild or legal ward, a child of domestic partner, a child to whom the covered individual stands in loco parentis, or a person to whom the covered individual stood in loco parentis when the person was a minor
A biological, adoptive or foster parent, stepparent or legal guardian of a covered individual or covered individual's spouse or domestic partner or a person who stood in loco parentis when the covered individual or covered individual's spouse or domestic partner was a minor child
A person to whom the covered individual is legally married under the laws of any state, or a domestic partner of a covered individual
A grandparent, grandchild or sibling (whether a biological, foster, adoptive or step relationship) of the covered individual or covered individual's spouse or domestic partner
As shown by the covered individual, any other individual with whom the covered individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship
Who is considered an 'employer'?
Any person engaged in commerce or an industry or activity affecting commerce that:
Employs at least one person for each working day during 20 or more calendar workweeks in the current or immediately preceding calendar year or
Paid wages of $1,500 or more during any calendar quarter in the preceding calendar year
'Employer' does not include the federal government but does include the state or a political subdivision of the state
Employees of a local government that has declined participation in the FAMLI program or a self-employed person (includes independent contractors, sole proprietors, partner or joint venturer) may elect coverage for an initial period of not less than 3 years. After the initial period, renewals will be yearly.
Must file a notice of election in writing (online or other approved format) with the director as required by the Division
Coverage will be effective on the first day of the calendar quarter immediately following election.
Self-employed individuals who elect to opt-in to FAMLI must register with the Division via the 'MyFAMLI+ Employer' online system by January 1, 2023
Self-employed individuals will be required to update information with the Division not less than quarterly within the period of coverage
Self-employed individuals will choose whether they will be using net earnings or gross earnings as the basis of both premium collection and benefit payments for the 3 year opt-in period and will be required to report these earnings to the Division not less than each quarter.
Self-employed individuals will be able to change their premium and benefit calculation between gross and net one time within the three year opt-in period.
Self-employed individuals also employed by another employer or multiple employers will have their benefit payment based on the combined wages.
Leave & Employee Protections under FAMLI
A 'covered individual' is entitled to be restored by the 'employer' to the position held when the leave commenced or be restored to an equivalent position with equivalent employment benefits, pay and other terms and conditions of employment provided that the individual has been employed with the current employer for at least 180 days prior to the commencement of leave.
The 'employer' must maintain any healthcare benefits for the duration of leave until FAMLI benefits terminate however the 'covered individual' must continue to pay their share of the cost of health benefits as required before the leave started.
The 'employer' shall not take retaliatory personnel action or discriminate against a person because the individual exercised their rights under FAMLI
Employer Notice Requirements
Each 'employer' must post the FAMLI developed program notice in a prominent location in the workplace and notify employees, in writing, upon hiring and upon learning of an employee experiencing an event that triggers eligibility.
Benefits received under FAMLI are not subject to state income tax
Federal income tax has not been determined as of yet, but if benefits are subject to income tax, the Division or private plan must inform an individual filing a new claim at the time of filing that benefits are subject to federal income tax and requirements exist pertaining to estimated tax payments.
Must confer all the same rights, protections and benefits provided to employees under FAMLI.
Must be approved by the FAMLI Division
Will go into much greater detail under private plan blog post
What should you be doing now to prepare for January 1, 2023
Determine the number of employees under FAMLI rules for your business
* This will determine whether your business is responsible for employer premiums:
- 9 or fewer employees = no employer premium
- 10+ employees = employer premium required
Estimate your premium liability
* For smaller companies and self-employed individuals without a payroll department, you can visit the FAMLI premium estimator HERE.
Have a plan ready for premium deductions beginning Jan 1, 2023
* Talk with your payroll department or payroll provider and make sure they are ready. The Division has posted a pay stub example HERE.
Talk with your HR department to make sure employee handbooks/manuals are updated and required postings/notices are completed by Jan 1, 2023.
*The Division has posted the required 2023 notice ( English / Spanish ) , a paycheck stuffer ( English / Spanish ), an Employee Handbook that can be easily added to your companies handbooks HERE and a Break Room Poster ( English / Spanish ).
More detailed information on premiums will be discussed in the next posting of the series. Hopefully you find this information useful and come back to read the rest of the postings in this series! As always, feel free to reach out to the Complete Benefit Solutions team with and questions or concerns. email@example.com
*This post is for educational / informational purposes only (Disclaimer) It is your responsibility to verify any and all information provided.