Colorado Employers – Are You Ready for FAMLI Starting Jan. 1, 2023?
In November 2020, Colorado voters approved Proposition 118, paving the way for a state-run Paid Family and Medical Leave Insurance (FAMLI) program.
FAMLI will ensure Colorado workers have access to paid leave during certain life events. It is a social insurance program with both employers and employees contributing to the fund starting Jan. 1, 2023, that will eventually pay out benefits to eligible employees starting Jan. 1, 2024.
Under the FAMLI statute, all workers are entitled to FAMLI benefits once they have earned $2,500 in Colorado at any point over the preceding year. This $2,500 threshold can be met from any combination of employers and thus most Colorado employees will be eligible for FAMLI benefits on or soon after day one of their employment, unlike the federal Family and Medical Leave Act (FMLA), which provides that employees are not eligible for FMLA benefits until they have been employed for at least 12 months.
Covered Uses of FAMLI Leave:
Under FAMLI, an employee is entitled to up to 12 weeks of paid leave for qualifying reasons, plus an extra four weeks for pregnancy or childbirth-related reasons, on a 12-month period rolling backwards, beginning on the first day in which an employee begins taking FAMLI benefits.
Qualifying reasons include:
- To manage their own serious health condition.
- To care for a family member with a serious health condition.
- To care for a new child (within the first year of birth, or foster placement, or adoption).
- To make arrangements for military deployments.
- To address immediate safety needs and impact of domestic violence/sexual assault.
Some Highlights of FAMLI:
- Starting Jan. 1, 2023, most employers with 10+ employees (and all employees) begin payroll deductions for FAMLI premiums.
- The premiums are set to 0.9% (through 2024) of the employee’s wage, with 0.45% paid by the employer and 0.45% paid by the employee. The FAMLI premium rate is statutorily capped at 1.20%.
- Wages subject to FAMLI premiums will be the same wages subject to Unemployment Insurance (UI).
- Employers must complete registration in My FAMLI+ Employer in Q1, 2023, and employer quarterly premium payments and wage reports will be due starting April 30, 2023.
- Employers who intend to meet the FAMLI requirements through a private plan must start collecting and remitting premiums under the FAMLI program beginning Jan. 1, 2023, however they will be eligible for a refund of these premiums if they have received approval by the state for a private plan with an effective date on or before Jan. 1, 2024.
What is the Process for Employees to Request FAMLI Benefits:
- Beginning Jan. 1, 2024, covered workers can begin submitting requests for FAMLI leave benefits directly to the Colorado Department of Labor and Employment – FAMLI Division, unless an employer has been approved to use a private plan to meet its FAMLI obligations.
- FAMLI Benefits applications may be submitted at least 30 days prior to an anticipated start date for benefits, although the FAMLI Division will consider applications submitted up to 30 days after the leave has begun if earlier notice was impracticable under the circumstances.
- With their application, employees will be required to provide different forms of information, depending on the nature of their leave.
- Once the FAMLI Division receives an application for benefits, it will notify the claimant’s employer of the application within five business days. Employers can require employees to inform the employer directly of the need for FAMLI leave, separate from the division providing notice of the benefits application. Employees should notify employers of their need for leave in the same manner as they would typically communicate work unavailability and should follow the employer’s usual and customary notice and procedural requirements for leave.
- Once an application for FAMLI benefits is submitted, the FAMLI Division will adjudicate the claim for benefits within two weeks. The division will notify the employee and the employer of the outcome of the claim. There will be an appeal process available to employees if their claim for benefits is denied.
This information is not a fully comprehensive outline of FAMLI and is only meant for general informational purposes.
- FAMLI 101 Slide Deck
- SHRM article, “Colorado Issues Final Rules on Paid Family and Medical Leave”, by David Gartenberg and Carolyn Theis, Littler. September 9, 2022.
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