Paid family and medical leave coming to Colorado | Sherman & Howard LLC

One of the quieter Election Day stories from Colorado is one that will have a significant impact on employers. Voters passed Proposition 118, the Paid Family and Medical Leave Insurance Act. Colorado joins 12 other states in providing paid family and medical leave to a wide range of workers. The changes are dramatic: Virtually every employer is required to provide up to 16 weeks of family and medical leave, much of which is work-related leave, and many employers are required to share wage premiums to fund the program.

The Paid Family and Medical Leave Insurance Act will affect more employers and employees in Colorado than the Federal Family and Medical Leave Act of 1993 (“FMLA”), which requires insured employers to provide eligible employees with 12 weeks of unpaid leave for certain qualifying reasons. Effective January 1, 2024, Colorado law allows “insured persons” to take paid family and medical leave. “Insured Person” is broadly defined to include any person who either earns $2,500 in wages during a Base Period or elects to be funded, meets the requirements for leave, and submits a claim for benefits. Employees who are self-employed (including independent contractors, sole proprietors, partners and joint ventures) or who work for local government are eligible for the program. In general, any natural or legal person that employs at least one person is considered an employer for the purposes of the Paid Family and Medical Leave Insurance Act (only the very smallest employers, defined as any employer that has not employed at least one person for at least 20 years Weeks in the current or most recent calendar year or who did not pay at least $1,500 in wages each quarter in the previous calendar year are excluded).

Colorado law permits vacations in more circumstances and for more times than the FMLA. Like the FMLA, the Paid Family and Medical Leave Insurance Act provides for up to 12 weeks of leave when an insured person has a serious medical condition, is caring for a family member with a serious medical condition, is caring for a new child, or requires vacation due military necessity. In addition, an insured person can take up to 12 weeks of “safe leave” related to stalking, domestic violence and sexual assault, and an additional 4 weeks due to pregnancy or childbirth complications. Leave of absence for reasons that do not fall under the FMG do not meet the employer’s obligations under the FMG. According to the new state law, employees who have been employed for at least 180 days before the start of the holiday are entitled to job protection and re-employment in their own job or an equivalent job. Employers must continue health insurance benefits during the leave of absence. Employers may not require employees to take accrued paid vacation, sick leave, or paid time off before or during paid family and sick leave, although workers may agree to take accrued paid vacation while taking paid family and sick leave, so long as they do not the case will result in the worker receiving more than their average weekly wage when the insurance benefit and the employer’s payment are added together.

Holidays are paid for by health insurance. Wage premiums will be set at 0.9% of a worker’s wages from 1 January 2023 and could rise to as much as 1.2% of a worker’s wages from 2025. Employers with at least 10 employees must pay at least half of the wage contribution. Wage premiums are assessed on wages up to the social security tax limit. An employee’s benefits during paid family and medical leave are calculated as 90% of the insured person’s wages up to and including the state average weekly wage plus 50% of the insured person’s wages above that state average weekly wage. In 2024, weekly benefits are capped at $1,100, which is projected to be 90% of the 2024 state median weekly wage. Employers can apply for permission to meet their obligations under the new law through a private plan, as long as the private plan offers everyone the same rights, protections and benefits.

Employers are prohibited from retaliating against workers who exercise their rights under the Paid Family and Medical Leave Insurance Act, and may not treat paid family and medical leave as “absences” to take adverse action.

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