On November 2, 2020, Colorado voters adopted Proposition 118, also known as the “Paid Family and Medical Leave Insurance Act.” It is one of the most progressive family and medical leave programs in the country.
Who is covered?
Under the Act, beginning January 1, 2024, a “covered individual” has the right to take paid family and medical leave and to receive family and medical leave insurance benefits while taking paid family and medical leave. The Act defines a “covered individual” as follows:
(1)(a) the individual earned at least $2,500 in wages subject to withholdings pursuant to the Act during the individual’s base period, as defined in C.R.S. § 8-70-103(2), or alternative base period, as defined in C.R.S. § 8-70-103(1.5); or
(1)(b)(i) Elects coverage and meets the requirements of C.R.S. § 8-13-414;
(1)(b)(ii) Meets the administrative requirements set forth in Part 4 of the Act; and
(1)(b)(iii) Submits an application with a claim for benefits pursuant to C.R.S. § 8-13.3-4 16(d)(6).
When may leave be taken?
Covered individuals will be eligible to receive leave under the Paid Family and Medical Leave Insurance Act, for the following reasons:
- The birth, adoption or placement through foster care of a child; or to provide care to a child during the first year after birth, adoption, or placement of that child;
- To care for a family member with a serious health condition;
- A serious health condition of the employee;
- Any qualifying exigency leave; and/or
- The employee is a victim of domestic violence, stalking, or the victim of sexual assault or abuse.
Duration of Leave
A qualified employee may take paid family and medical leave for a maximum of 12 weeks during an “application year.” Benefits are payable up to an additional 4 weeks to a “covered individual” with a serious health condition related to pregnancy complications or childbirth complications.
The Act defines “application year” as the 12-month period beginning on the first day of the calendar week in which the individual files an application for family and medical leave insurance benefits.
Amount of Benefits
Benefits are determined as follows:
- The portion of the individual’s average weekly wage that is equal to or less than 50 percent of the state’s average weekly wage is replaced at a rate of 90 percent; and
- The portion of the individual’s weekly wage that is more than 50 percent of the state’s average weekly wage is replaced at a rate of 90 percent.
For leave beginning before January 1, 2025, a covered individual’s benefits are capped at $1,100 per week. For leave beginning after January 1, 2025, a covered individual’s benefits are capped at 90 percent of the state’s average weekly wage.
Colorado’s average weekly wage is established annually by the State of Colorado Department of Labor and Employment’s Division of Workers’ Compensation on or before July 1. The average weekly wage when the Act goes into effect through June 30, 2021 is set at $1,180.47. The average weekly wage will be adjusted on or before July 1, 2021 for the following 12 months.
Employers will be responsible for submitting premiums to the state in a manner that has yet to be determined. The amount of premiums owed will depend on the number of employees. Under the Act, the total premium amount is set at 0.9 percent of an employee’s wages for the period from January 1, 2023 through December 31, 2024. After December 31, 2024, the premium amount may be increased.
For employers with fewer than 10 employees, the employer may deduct up to 50 percent of the required premium from the covered employee’s wages. Employers with less than 10 employees are only required to remit 50 percent of the total premium owed. In other words, employers with less than 10 employees are not required to subsidize the cost of coverage under the Act.
For employers with 10 or more employees, the employer may still deduct up to 50 percent of the required premium from the covered employee’s wages. However, employers with more than 10 employees are required to remit 100 percent of the total premium owed. In other words, employers with 10 or more employees must subsidize half of the premium required under the Act.
Different rules apply to employees of local governments and self-employed individuals.
Premiums are not owed on wages above the contribution and benefit base limit established annually by the Federal Social Security Administration for purposes of the Federal Old-Age, Survivors, and Disability Insurance program.
The Act also creates protections for employees who take leave pursuant to the Act. Any “covered individual” who has been employed with their current employer for at least 180 days prior to the commencement of the covered individual’s paid family and medical leave who exercises the covered individual’s right to family and medical leave insurance benefits shall be entitled to the following:
(a) Upon return from leave, the employee shall be restored by the employer to the position held by the covered individual when the leave commenced; or
(b) To be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.
The Act does not entitle a restored employee to the accrual of any seniority or employment benefits during any period of leave or any additional rights, benefits, or positions of employment the employee would have been entitled to if the employee not taken the leave.
Other Important Provisions
During a covered individual’s leave taken pursuant to the Act, an employer shall maintain any health care benefits the covered individual had prior to taking such leave for the duration of the leave as if the covered individual had continued in employment continuously from the date the individual commenced the leave until the date the family and medical leave insurance benefits terminate.
The Act also prohibits retaliatory personnel action or other forms of discrimination against a person because the individual requested, filed for, applied for, or received benefits under the Act.