Colorado Prop 118 – FAMLI

3 years ago

Proposition 118, Colorado’s Paid Family and Medical Leave Insurance Program (FAMLI) was passed on 11/3/2020. Under the plan, effective January 1, 2024, FAMLI requires employers to provide eligible employees up to 12 weeks of paid family and medical leave. Employees who experience medical complications related to pregnancy or childbirth may be eligible for an additional 4 weeks of FAMLI benefits. FAMLI Benefits provides employees with partial wage replacement for the following situations:

Caring for a new child during the first year after the birth, adoption, or foster care;
Caring for employee’s own serious health condition;
Caring for a family member with a serious health condition;
When making arrangements for a family member’s military service deployment; or
When addressing employee’s or employee’s family member’s safety needs and impact related to domestic violence, stalking, or sexual assault, as defined under Colorado law.

To be eligible, an employee must earn at least $2,500 annual wages within Colorado and be employed for at least 180 days (approximately 6 months). Benefits may be payable after the employee accumulates at least 8 hours of FAMLI benefit premium contributions. The leave benefit is portable and is not dependent on the amount of time an employee has worked for a specific employer. The earliest employees will be able to take advantage of FAMLI benefits is January 1, 2024.

FAMLI Benefit Payments depend upon the employee’s income. Eligible employees will receive between 37% and 90% of normal weekly wages and has a maximum weekly benefit of $1100. See the FAMLI Premium and Benefits Estimator (https://co.accessgov.com/famli/Forms/Page/famli/famlicalculator/0).

Under the new law, employers are held to the following:

Employees cannot be fired while on FAMLI if they have been on the job for at least 180 days,
Employees must be restored to an equivalent job upon returning from FAMLI
Employers can require FAMLI benefits run concurrent with federal FMLA, and
Employers are prohibited from retaliating against employees for using FAMLI. Employees may take intermittent leave if the employer typically provides intermittent leave in its policies.

Program Funding: Beginning January 1, 2023, employers and employees will begin paying into FAMLI. Employers must collect premiums through payroll contributions as a 50/50 split between the employer and the employee and submit to the FAMLI Division. From January 1, 2023 to December 31, 2024, the total payroll deduction amount will be .45% for both employer and employee for a total of .9%. The employer may choose to pay a larger percentage (up to 100%) to allow the employee to pay a lesser percentage of the total amount due as an added work benefit. After January 1, 2025, the FAMLI Division will reset the premium due for FAMLI program benefits.

Employers may elect to offer a private plan or self-insurance. To do so, employers must register with the FAMLI system and are required to pay premiums beginning 1/1/2023 until the FAMLI Division has approved the exemption. Employers offering a private plan or self-insurance are not exempted from FAMLI premiums until the FAMLI Division has reviewed and approved employer’s request and documentation for exemption. The FAMLI Division will begin accepting documentation from employers who are under contract with licensed Carriers to provide an approved plan beginning November 2022. The Colorado Department of Insurance (DOI) is in the process of establishing requirements for private insurance in lieu of participation in the FAMLI benefit program. See the DOI bulletins at the following link: https://content.govdelivery.com/accounts/CODORA/bulletins/31053de

Small employers with less than 10 employees must register with the FAMLI Division system and are not required to pay the employer’s share of the premium but must withhold the employee’s contribution and submit to the FAMLI Division. For more information, plan to attend the FAMLI Division’s Preparing Your Small Business for FAMLI webinar on May 27, 2022. Register via the FAMLI’s website: https://famli.colorado.gov/employers/employer-webinars

Local Governments and Municipalities must register with the FAMLI Division system by the Fall of 2022. Local Governments may elect to:

Participate and remit employer’s and employee’s share of premiums, or
Decline participation for up to a period of 8 years, or
Decline participation and allow employees to individually participate and facilitate voluntary payroll deductions for employee only share of premium.

Local government’s governing body must vote anytime during 2022 to decline participation and must provide the FAMLI Division notice of their decision to opt out by 1/1/2023. See the Local Government Fact Sheet: https://famli.colorado.gov/sites/famli/files/documents/LocalGov_2.pdf For more information, plan to attend the FAMLI Division’s Local Government webinar on April 29, 2022 12:30-1:30 p.m. (MDT). Register via the FAMLI’s website: https://famli.colorado.gov/employers/employer-webinars

Employees of the federal government are not eligible to participate in the Colorado FAMLI benefit program.

Sole proprietors, independent contractors, and joint ventures may register with the FAMLI Division system and submit an election notice to participate for a period of no less than 3 years.

The FAMLI Division System is expected to be available by the Fall of 2022.

The initiative established creation of the Division of Family and Medical Insurance within the Colorado Department of Labor and Employment that will be responsible for establishing the FAMLI benefits program, collection of payroll contributions for premium funding the FAMLI, and administration of FAMLI benefits payable to eligible employees. The FAMLI Division has provided a breakroom poster to that can be used to notify and educate employees about FAMLI benefits (https://famli.colorado.gov/sites/famli/files/documents/BreakRoomPoster.pdf).

WHAT SHOULD EMPLOYERS DO NOW?

Determine business or local government obligations for participation in the FAMLI benefit program.
- Local Governments should schedule the vote whether to participate in or opt out of the FAMLI benefit program.
Register on the FAMLI Division system when available in the Fall of 2022.
Develop policy and procedures.
- Create communication plan for employees regarding policy, procedures, and effective dates.
- Post the FAMLI benefit program education poster provided by the FAMLI Division (https://famli.colorado.gov/sites/famli/files/documents/BreakRoomPoster.pdf).
Calculate premium liability utilizing the FAMLI Division’s benefits and premium estimator.
https://co.accessgov.com/famli/Forms/Page/famli/famlicalculator/0
Set up payroll contributions for employer and employees and update paystubs. See the FAMLI Division website for paystub example: https://famli.colorado.gov/sites/famli/files/documents/PayStub.pdf