With the approval of Proposition 118 Colorado joins the growing number of states providing paid family and medical leave benefits to employees. This proposition now needs to go through the rulemaking process with the legislature, governor and department of labor.
What does Proposition 118 do?
Effective private employers with within the state of Colorado will need to provide up to 12 weeks of paid leave within a 12-month period. Employees incapacitated due to pregnancy may take an additional four weeks of leave during the 12-month period. Leave many be taken for:
- Birth and care of a newborn child,
- Placement of an adopted or foster child with the employee,
- To care for a family member (defined as any individual related by blood or whose relationship is the equivalent of a family relationship) with a serious health condition,
- Employee’s own serious health condition, including incapacity due to pregnancy,
- When the individual or individual’s family member is a victim of domestic violence, stalking or sexual assault.
- Any qualifying exigency.
To be eligible for leave, an employee must be employed with the employer for at least immediately preceding the request for leave and have earned $2,500 in wages that were subject to paid family and medical leave premiums. Benefits are continued as if the employee is actively employed and the employee should be reinstated to the same position.
How Will the Paid Leave be Funded?
The premiums for 2023 are set to be .9% of the employee’s wage split between the employee and employer (each paying .45%). Employers can choose to pay a larger percentage of the cost, up to 100%. Premiums will be adjusted for 2025.
What Paid Leave Compensation is Available?
Individuals will receive a portion of their wages based on the average weekly wage. In 2024, the maximum benefit is capped at $1,100 per week, and in 2025, the maximum weekly benefit is estimated to be $1,253 per week.
Is it Possible to Waive Participation in the State Plan if there Currently is a Paid Leave Plan in Place?
Employers are able to submit their private plan for approval. In order to be approved, the private plan must:
- Provide the same number of weeks of benefits
- Provide at least the same level of wage replacement,
- Provide leave for all of the circumstances specified in the Act,
- Cost employees no more than the premium required by the Act
- Post a bond if the private plan is self-insured
- Provide coverage for all employees, and all future employees
- Meet any additional requirements established by the authority.
What are the Notification Requirements?
Employers will be required to post a program notice in a prominent location in the workplace, and notify its employees in writing upon hiring and when learning of an employee experiencing an event that triggers eligibility for paid family and medical leave.
What should employers do now?
No action is needed currently. As Colorado proceeds with its rulemaking process more information will be come available for employers.
About the author
VP, Senior Compliance Manager
Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.
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