Understanding Colorado Paid Family Medical Leave

Understanding Colorado Paid Family Medical Leave

With the most recent elections, Colorado has joined a growing number of states that will provide paid family and medical leave.  Proposition 118 passed with 57% majority on November 4th 2020.
 
Summary: Proposition 118 obligates Colorado employers to allows for 12 weeks of paid family and medical leave funded through a payroll tax paid by employers and employees in a 50/50 split.
 
Employer Obligations – Beginning January 1st, 2023 each employer must collect and remit a new payroll tax to the fund to provide for these benefits.  The tax is 50/50 for the total amount of .9% (0.45% paid by the employer and 0.45% paid by the employee). 
For 2023, the maximum annual premium was estimated to be $1,455 since premiums can only be assessed on wages up to $161,700 per person.
After January 1st 2025, the taxation amount will be reviewed.  
This is job protected leave, an employee cannot be fired while on leave if they had been employed for 180 days.  When the employee returns, they must be restored to an equivalent position.
    Exemptions:
  1. Businesses with fewer than 10 employees 
  2. Companies that apply to use a private leave as long as it meets the set criteria approved by the Division of Family and Medical Leave Insurance within the State Department of Labor
 
Employee Eligibility – Beginning January 1st of 2024, employees can request paid Family Medical Leave (FMLA) insurance benefits.  A covered individual may receive up to 12 weeks of paid FMLA  with an additional four weeks of leave for pregnancy or childbirth complications.
Employees earning $2500 at their job and need leave for one of the following items will be eligible for paid FMLA:
  • caring for their own serious health condition;
  • caring for a new child during the first year after the birth or adoption or for foster care of a new child;
  • caring for a family member with a serious health condition;
  • when a family member is on active duty military service or is called for active-duty military service; and
  • when the individual or the individual’s family member is a victim of domestic violence, stalking, or sexual assault.
An Employee may take intermittent leave if that is the common practice offered by the employer.  Benefits are not payable until the employee accumulates at least 8 hours of FMLA insurance benefits.  
 
Employees may receive 90% of their average weekly wage for the portion of wages that are less than or equal to 50% of the state average weekly wage and 50% of the portion of their wages that exceed 50% of the State Assessed weekly wage.  The max benefit is capped at $1100 per week for 2024.  The maximum weekly benefit is estimated to be $1253 per week in 2025.
 

Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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