Colorado Family and Medical Leave Insurance Program: What small businesses need to know
Colorado voters approved Proposition 118 in November of 2020, paving the way for a state-run Family and Medical Leave Insurance (FAMLI) program. FAMLI will allow small employers in Colorado to facilitate access to paid time off to their employees when they need to care for a family member. This is crucial for small businesses and their employees and a welcomed initiative in Colorado. According to a Small Business Majority survey, a majority of small business owners (64%) support establishing a publicly-administered family and medical leave insurance program in the state.
Who qualifies for the Colorado Family and Medical Leave Insurance Program?
- Colorado’s FAMLI program will cover most private sector workers, including self-employed individuals and independent contractors.
- Self-employed workers may voluntarily opt into FAMLI.
- While enrollment can happen at any point, self-employed individuals must agree to a three-year participation period. No action is required for self-employed individuals until they can self-elect coverage when benefits become available in 2024.
- Self-employed workers are only responsible for 0.45% of the premium.
- In order to determine premiums and benefit amounts, self-employed workers may choose to report either:
- gross income
- net earnings from self-employment
How will this program impact employers?
Both small employers and their employees will contribute to cover the program premiums.
- Starting on January 1, 2023, most Colorado businesses will need to begin collecting premiums through a simple payroll deduction for full-time, part-time and seasonal workers. Overall, FAMLI is a shared fee between employers and employees based on 0.9% of wages.
- Businesses with 9 or fewer employees don’t have to pay the employer’s share of the premium, but are still required to submit the 0.45% employee portion on behalf of its employees.
- Businesses with more than 10 employees will pay the employer share (0.45% of premiums).
- Employees are never required to pay more than 0.45% of the total premium.
- FAMLI will start providing benefits to employees beginning January 1, 2024.
What are the requirements to participate in FAMLI?
Participation requirements vary for employers to participate in the FAMLI Program.
- Most Colorado employees become eligible to take paid leave after they have earned at least $2,500 in wages within the State within the last 4 calendar quarters.
- Businesses that already offer paid family leave benefits can apply to use their own private plan that offers the same or greater benefits as the FAMLI plan.
- Self-employed workers (1099 or contract workers) may also be eligible to participate in FAMLI if they have opted into coverage and live and work in Colorado.
- Most eligible employees will receive up to 12 weeks of leave. Those who experience pregnancy or childbirth complications may receive an additional four weeks of coverage.
When can Colorado employers and their employees use FAMLI?
Small businesses and their employees, self-employed individuals and independent contractors can use FAMLI to:
- Manage their own serious health condition.
- Care for a family member with a serious health condition.
- Care for a new child (within the first year of birth, or foster placement, or adoption.)
- Make arrangements for military deployments.
- Address immediate safety needs and impact of domestic violence/sexual assault.
Where can I find more information about FAMLI?
To learn more about the program, visit the Colorado FAMLI portal.