Starting Jan. 1, 2023, two new state mandates will impact Colorado employers. The programs, the Colorado Secure Savings Program and the Colorado Family and Medical Leave Insurance Program (FAMLI), are designed to provide access to retirement savings and paid family leave if the employer does not already offer programs that satisfy the requirements.
Secure Savings Program:
The Colorado Department of the Treasury has an online portal, coloradosecuresavings.com, for employers that do not sponsor an employee retirement or savings plan and currently employ five or more people. The employer will need to register with the state using the link above. The employer will need to enter specific data for each employee, which will enable the state to send pertinent information to the employees about the Secure Savings Program.
Employers should communicate to employees that the intent of the Secure Saving Program is to make it easier for employees to save for their retirement via payroll deductions to individual retirement accounts (IRAs). The employee will have the option to use the automatic 5% of pay contribution to start, designate a different contribution amount or opt out of the program entirely during the month of January. It is important to note that employers that don’t already offer a retirement plan that meets state requirements are required to register all employees for the state program. Employees who do not want to participate must actively opt-out of the state system to avoid the 5% payroll deduction.
FAMLI:
Effective Jan. 1, 2023, ALL employers in Colorado must start paying premiums to the State of Colorado to fund the Colorado Family and Medical Leave Insurance Program (FAMLI). FAMLI is a voter approved program to fund a paid family leave program.
- Employers with nine or fewer employees: A premium of 0.45% should be deducted from the employees’ wages. There is no employer contribution.
- Employers with more than nine employees: A premium of 0.9% should be deducted from the employees’ wages—half contributed by the employer and half contributed by the employee (0.45% by each).
- Employers are responsible for collecting those deductions and sending them into the FAMLI Division of the state on behalf of their employees once a quarter—at the end of the month following the end of the quarter. For example, March 31 is the end of the first quarter, so April 30 is the due date of the first premium. Additional information concerning this program can be found at the Colorado Department of Labor and Employment or at famli.colorado.gov/my-famli-employer.
- It is important to deduct the full amount of the employees’ premium in each pay period, as retroactive deductions from future paychecks are not allowed.
- Additionally, employers can also choose to pay the total premium on behalf of the employees instead of deducting half of the premium from employees’ paychecks.
- For calculation purposes, the definition of wages includes hourly or salary wages, tips and gratuities, commissions, bonuses, holiday pay and sick pay.
Employers should communicate to employees that the purpose of this program is to provide paid family leave. Employees must be informed that from Jan. 1 forward their earnings will be taxed .45% for this program and that employees will be able to access benefits starting on Jan. 1, 2024. Benefits will be paid directly by the state once they begin in 2024. There is not an opt out for this state program.
The employee share of FAMLI premiums is set at 0.45% of employee wages through 2024. For 2025 and beyond, the director of the FAMLI Division will set the premium rate according to a formula based on the monetary value of the fund each year.
2024 FAMLI Benefits for Employees
Starting in 2024, paid family and medical leave benefits are available to most Colorado employees who have a qualifying condition and earned $2,500 over the previous year for work performed in Colorado.
The qualifying conditions for paid family and medical leave are:
- Caring for a new child during the first year after the birth, adoption or foster care placement of that child.
- Caring for a family member with a serious health condition.
- Caring for your own serious health condition.
- Making arrangements for a family member’s military deployment.
- Obtaining safe housing, care and/or legal assistance in response to domestic violence, stalking, sexual assault or sexual abuse.
Covered employees are entitled to up to 12 weeks of paid family and medical leave per year. Individuals with serious health conditions caused by pregnancy complications or childbirth complications are entitled to up to four more weeks of paid family and medical leave per year for a total of 16 weeks.
Leave may be taken continuously, intermittently or in the form of a reduced schedule. It will be paid at a rate of up to 90% of the employee’s average weekly wage, based on a sliding scale. Employees may estimate their benefits by using the benefits calculator available at famli.colorado.gov.
There is not a minimum amount of time required to work for an employer to qualify for paid family and medical leave benefits. If FAMLI leave is used for a reason that also qualifies as leave under the federal FMLA, then the leave will also count as FMLA leave used. Employees may choose to use sick leave or other paid time off before using FAMLI benefits, but they are not required to do so.
Employers and employees may mutually agree to supplement FAMLI benefits with sick leave or other paid time off to provide full wage replacement.