SUMMARIZED 2021 LEGILSATION UPDATES
1. Required Paid Leave (ARPA, HFWA, PHEL)
2. COBRA Updates
3. CWCA Vacation Payout
4. Equal Pay for Equal Work
5. CSSP – State required retirement plan
6. Colorado paid FMLA and tax
7. Public Health Emergency Whistleblower Act
There have been numerous legislative changes that impact payroll since March of 2021. Below is a summary of those changes with state and federally released guidance for implementation. The information presented in these materials should not be considered legal, HR or accounting advice, and should not substitute for legal, accounting, or other professional advice in which the facts and circumstances may warrant. We encourage you to consult legal counsel as it pertains to your own unique situation(s) and/or with any specific legal questions you may have.
Colorado has followed a growing trend of state regulations for payroll and HR.
Additionally, ARPA has affected COBRA Subsidy:
- The American Rescue Plan act offers 100% COBRA subsidy to qualified individuals from April – September 2021.
- Includes all employees involuntary terminated and still in their 18-month COBRA eligibility window, even if they decline to elect COBRA earlier.
- Employers are reimbursed via a tax credit.
CWCA - Colorado Wage Claim Act
Under federal and state law you are not required to provide paid vacation as a business owner — it is a voluntary benefit. But if you do, vacation pay, like other wages, cannot be forfeited once earned. In other words, vacation pay policies that take a “use it or lose it” approach are not valid.
When an employee is terminated, compensation for vacation pay is due with their final paycheck.
- Involuntary termination: final pay is due within 24 hours.
- Voluntary termination: final pay is due with next regularly scheduled pay day.
Equal Pay For Equal Work Act
Law effective January 1, 2021, for all Colorado Employers and requires equal pay (including benefits) for substantially similar work. There are requires enhancements to job descriptions, job postings and promotion opportunities.
Job Descriptions: Documentation must be kept for 2 years after an employee leaves employment.
Job postings: Must include the offered pay or range of pay, general description of any other compensation (bonus, commission, tips, etc.) and a general description of the offered benefits.
Promotions: must be announced to all current employees on the same business day prior to the employer making any decisions.
Employers cannot use history of pay to justify a wage difference – wage history can not even be discussed in the interview process.
The law provides 6 valid justifications for differences in pay – Any or all these reasons may be used which together must account for 100% of pay differentials.
- Seniority/Tenure: Permitted to pay employees who have been with your company longer more.
- Merit based system: Tied to a performance review system.
- Quantity or quality-based system: Quantity: bonus/commission based (sales) or number of units produced. Quality: demonstrate low error rates, high customer satisfaction scores, etc.…
- Geographic location: Differences in pay based on geographic location of where work is performed.
- Job related education & training: Permitted to pay employees based on an employee's experience, training, and education to the extent it is reasonably related to the employee’s job.
- Required travel: Pay differential is justified if you require an employee to travel away from home as a regular requirement.
Provisions have been created for employees to seek financial relief for violations:
- Employees can pursue violations for up to 2 years.
- Employees can be awarded 2X damages for up to 3 years of pay.
- Develop policies, put them in writing and be consistent.
- Preform regular pay audits to determine which employees may require an adjustment.
CSSP – Colorado Secure Savings Program
Signed into law in July of 2020 but has no determined start date. This will apply to all business with 5 or more employees and has been in business for at least 2 years.
- If you offer a 401(k), 403(b) or SIMPLE IRA, then you are already compliant
- If you don’t offer a retirement plan, employees must be auto-enrolled in a state-run individual retirement plan – employer contributions are not mandated
FMLA – Colorado Paid Family Leave
Benefit to begin being paid on January 1, 2024, to provide wage replacement for up to 12 weeks (16 in some situations) for various family and medical related reasons.
Funded by a 0.9% tax on wages beginning January 1, 2023
- >10 employees must pay for at least half (the rest can be withheld from employees)
- <10 employees can have employees bear the full cost of the program
Public Health Emergency Whistleblower Act (PHEW)
Effective July 11, 2020, applies to all employers and any business with five or more independent contractors.
- Provides broad protection to employees and contractors that voice concern or file complaints against potential public health violations.
- Allows employees and contractors to wear their own personal protective equipment.