Employer FAQs

No. The program is a social insurance, and the State pays your employee (the claimant) a portion of their weekly wages directly through a debit card or direct deposit. 

As the employer, you are not responsible for the salary or wages while someone is on leave. However, any portion of the employee's health insurance benefits you normally cover; you are required to continue. You may choose to require the employee to continue to pay their share of their contribution to these benefits while they are on leave. 

Local government employers which opt-out of the FAMLI program are not required to maintain health insurance benefits during FAMLI leave for their employees who opt-in to the program. See C.R.S. 8-13.3-509(8). However, while the FAMLI Act does not require a local government employer to maintain benefits in this situation, the terms of your specific benefits policies and/or other laws or regulations may require benefits to be maintained during paid family and medical leave.

While an employee is on leave, employers are not responsible for paying wages at that time. Because of this, you may have access to vacancy savings to spend as needed. Optionally, as an employer you may, but are not required to, contract with a temporary worker to supplement your staffing needs.

Your employee will only be receiving a portion of their paycheck dependent on their average weekly wage and not the full amount. The benefit is capped at $1,100.00 a week. Employees are not required to use earned paid time off (PTO) before taking leave under the FAMLI program, but employers may allow employees to use their accrued PTO to “top off” or cover the remaining balance of their typical weekly wage in order to “make whole” their take-home pay while on leave. 

This decision lies with the  employer. As best practice, being honest with the temporary worker that their position may be limited to cover temporary leave for another employee will be helpful. 

However, depending on the permanent employee’s circumstances and reason for taking leave, it is possible another federal law such as the American with Disabilities Act (ADA) would be relevant to the employee's new life circumstances, and a partial return to work/job sharing model may exist for a time. If time was spent onboarding the temporary worker, having them available during a transition or for another event may be helpful and can save time and effort

Even a single employee vacancy can be a strain for a businesses’ daily operations. Businesses may have other employees share the workload from the employee taking leave. While an employee is on leave, employers have access to vacancy savings. Employers may use vacancy savings from an employee on leave to provide a bonus or hazard pay for other employees who take on additional work. 

Overall, FAMLI is a shared fee between employers and employees based on 0.9% of wages. This rate is set through 2025 by Proposition 118, voted in by 57% of Coloradans as the authorizing vote of the people to create the FAMLI enterprise fund.

Employers are responsible for “remitting” on behalf of their employees or paying into the fund on their employees’ behalf. This can be achieved through a wage deduction as a part of existing payroll processes. An employer will not be required to pay more than 0.45% (or half the premium)* into the program from its own business expenses. 

If you have less than 10 employees, you are not required to pay the employer share.

If you have 10 or more employees, you may deduct up to 50% of the 0.9% premium as a standard payroll deduction. 

Because the rate has already been set, this formula is used to calculate premiums:

• (subject annual wages X .009) / 2 = employer share
   
• (subject annual wages X .009) / 2 = employee share

The upper limit of what an employer may be required to pay for a senior level or executive employee is capped at the same rate their social security withholding is. The Federal Social Security Wage Cap is set at $160,200 for earnings in 2023.

The chart below is a floor to ceiling calculation of what a self employed individual or an employer can expect to pay as a premium. See the table below. 

 FAMLI Floor to Ceiling Calculation in 2023 dollars 

Estimates only. Annual cost to employer/employee at 50/50 in red.

This table shows the new 2023 minimum wages as a floor and the new 2023 Social Security Wage Cap as a ceiling. 

Both employers and employees will begin paying into the fund starting in January 2023 through payroll deductions. Employers need to submit to the Colorado Department of Labor and Employment both their share (if required) and their employee's share of the premium through an online system at the end of each quarter. These quarterly filings should be similar to how most companies submit their unemployment insurance today. 

These contributions build the FAMLI fund during 2023. Starting on January 1, 2024 employees may begin to file claims to receive their FAMLI benefits through an online process in development by the Department. The 2023 premium payment schedule is:

• April 30, 2023 - A 30-day grace period will be offered before the first premium payments and wage reports are considered late. 
• July 31, 2023
• October 31, 2023
• January 31, 2024

Responsibilities Under Proposition 118

FAMLI leave is different from paid sick days and will require documentation of need in most cases before the benefit is approved by the FAMLI Division. Depending on the reason and need for leave, the benefit leave period may be up to 12 weeks. For people experiencing pregnancy and childbirth complications this may be extended an additional 4 weeks, for a total of 16 weeks. 

The FAMLI benefit can only be taken once a year across a rolling annual calendar year. For example, if an employee takes paternity leave on February 11th, 2024 for the full 12 weeks, they would not be eligible for any other FAMLI leave period covered until February 11th, 2025. 

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. 

Self Employed Workers (1099 or Contract Workers) may also be eligible if they have opted into coverage and live and work in Colorado. 

Under the FAMLI Act, an “employee” is any individual, including a migratory laborer, performing labor or services for the benefit of another, irrespective of whether the common law relationship of master and servant exists. The FAMLI Act’s definition of “employee” includes a two-prong
exception:

• If a person is both primarily free from control in the performance of their work, and that work is part of their independent profession or trade, then that person is not an employee under the FAMLI Act, and payments to them would not be subject to premiums. §8-13.3-503 (7) C.R.S.

It's important to note that the Division may investigate claims that an employer has misclassified one or more employees as independent contractors. 

This depends on several factors and will need to be decided on a case by case basis. 

However the Colorado FAMLI leave benefit is never more than 12 weeks, or 16 weeks for complicated births. The Division will issue rules as well as guidance to help you navigate these conversations and determinations prior to January 2024, which is the first month a person may take FAMLI leave. 

The FAMLI program was designed to be able to run concurrently with the FMLA. For more information, see U.S. Department of Labor Office of Wage and Hour Opinion Letter FMLA-2019-1-A.

The Division is building a technological solution that will notify an employer when an employee files a claim,  provide information as to an anticipated return to work date based on the nature of the claim, facilitate an appeals process for employers, and provide any other available documentation. The Division is anticipated to launch this online portal ahead of January 1 2024. 

Your total nationwide employee count will be what determines whether or not you pay the employer share of the premium. You will only need to pay premiums for the employees who are localized in Colorado. For example, if you have 15 employees nationwide, and eight working completely in Colorado, you as the employer would be required to pay the 0.45% employer's share and collect and remit the 0.45% of the employee's share for each of those eight employees. 

Under the FAMLI Act, most private sector employers must provide paid family and medical leave to their Colorado employees, whether through the state-run plan or through a private plan with equal or greater benefits and protections. An employee's wages will be subject to FAMLI premiums if:

1. The employee's work is performed entirely within Colorado;
2. The employee performs work both within and outside of Colorado, but the work performed outside of Colorado is incidental to the employee's work within Colorado, or is temporary or transitory and consists of isolated transactions; or
3. The employee's work is not primarily localized in any state, but some work is performed in Colorado, and one of the following is true:
   • The employee's base of operations is in Colorado, or if there is no base of operations, the place from which the employee's work is directed or controlled is in Colorado; or
   • Neither the base of operations nor the place from which some part of the work is directed or controlled is not in any state in which part of the employee's work is performed, but the employee's individual residence is in Colorado. More information regarding localization can be found in the FAMLI Division's Premium Rules at 7 CCR 1107-1, Section 1.5.4.B.

We've created the following decision tree to help employers determine Colorado localization when it comes to employees being subject to FAMLI:

Great question! The answer is no. Religious organizations, nonprofits or any other employer who may be exempt from FUTA premiums are NOT exempt from paying FAMLI premiums.

If the pastor or religious leader meets the definition of employee, they would not be considered a self-employed worker and should be counted as an employee and contribute premiums the same way all other employees in the organization do. Under the FAMLI Act, an “employee” is any individual, including a migratory laborer, performing labor or services for the benefit of another, irrespective of whether the common law relationship of master and servant exists. The FAMLI Act’s definition of “employee” includes a two-prong
Exception:

• If a person is both primarily free from control in the performance of their work, and that work is part of their independent profession or trade, then that person is not an employee under the FAMLI Act, and payments to them would not be subject to premiums. §8-13.3-503 (7) C.R.S.

It's important to note that the Division may investigate claims that an employer has misclassified one or more employees as independent contractors. 
 

FAMLI premiums should be considered post-tax deductions that do not reduce an employee’s taxable income.

Employers should report such deductions on IRS form W-2 in Box 14, and list “FAMLI” as the label. The FAMLI Division does not regulate income tax reporting requirements, and we encourage employers to confer with counsel, their accountant, and/or the IRS to ensure compliance.

The structure of a business isn’t what matters for FAMLI compliance. What matters is whether the business has qualifying employees. If you have at least one qualifying employee, you will need to register with the Division, submit wage data and send in premiums on behalf of that employee. Under the FAMLI Act, an “employee” is any individual, including a migratory laborer, performing labor or services for the benefit of another, irrespective of whether the common law relationship of master and servant exists. The FAMLI Act’s definition of “employee” includes a two-prong exception:

• If a person is both primarily free from control in the performance of their work, and that work is part of their independent profession or trade, then that person is not an employee under the FAMLI Act, and payments to them would not be subject to premiums. §8-13.3-503 (7) C.R.S.