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First Phase of Colorado’s Paid Family and Medical Leave Insurance Program Begins Jan. 1, 2023

  • Employment Law
  • Article
  • 6 min. Read
  • Last Updated: 09/12/2022

A mother cares for her sick child.
Beginning Jan. 1, 2023, Colorado employers must start collecting a percentage of their employees' wages to help fund the state's Paid Family and Medical Leave Insurance program or offer a private plan with benefits equitable to the state program.

Table of Contents

Colorado will make its Family and Medical Leave Insurance (FAMLI) available to private-sector employees and the self-employed starting in 2024, providing 12 weeks of paid leave for eligible employees with qualified reasons while allowing them to maintain job security.

Colorado joins nearly one dozen other states that have established paid family leave programs, and the state’s FAMLI program will be funded by employees and employers, who have the option of matching the percentage of the employee contribution or paying the full amount.

Voters passed Proposition 118, which created the family and medical leave insurance program in November 2020, but the initial measure did not contain a provision for general funding, so there was a delay in getting it up and running until subsequent legislation was passed.

As the state moves closer to implementing the first phase of the program, employers might have questions about their requirements.

What Are Employers’ Requirements Under Colorado Paid Family and Medical Leave?

Eligible employers in Colorado with 10 or more employees in their workforce nationwide, unless they opt-out and offer a leave plan equal to or greater than FAMLI, have the following requirements:

  • Collect 0.45 percent of employee wages
  • Match the employee contribution rate of 0.45% (through 2025, as required by Proposition 118). After that, the rate will be set each year, but the combined rate is capped at 1.2%.
  • Remit quarterly the employee share and employer share (if applicable) of premium to the fund
    • Paying into the fund begins Jan. 1, 2023

It should be noted that employers with fewer than 10 employees are not required to pay the employer share, but they still need to deduct the employee share and remit those contributions.

Since this is a state insurance program, employers are not required to pay wages to an employee who is on leave. The state pays a portion of the individual’s normal weekly wages through the fund. Employers are required to continue paying their normal portion of the employee’s health benefits and an employer could require that an employee on leave continue paying their share of the benefits contribution.

When Do Colorado’s FAMLI Employee Benefits Take Effect?

While employers and employees are required to pay contributions beginning Jan. 1, 2023, employees cannot start filing claims for FAMLI benefits until Jan. 1, 2024.

What is an “Eligible Employee” Under the Colorado FAMLI?

Under Colorado FAMLI, an eligible employee is one who has:

  • Earned at least $2,500 in wages within the state in the past four calendar quarters.
  • For the self-employed (1099 or contract workers) to be eligible, they must live and work in Colorado, as well as have opted into the coverage.

What are Reasons for Qualified Leave Under Colorado FAMLI?

Eligible employees in Colorado can take leave for the following reasons or a combination of these reasons:

  • The birth of a child or placement of a child with the employee for adoption or foster care
  • To care for a spouse, child, or family member with a serious health condition
  • To care for their own serious health condition
  • To make arrangements for a family member’s military deployment
  • To address immediate safety needs of the employee or eligible family member who has been the victim of domestic violence and/or sexual assault. This “safe leave” includes seeking medical, legal, or law enforcement assistance.

How Much Leave Does an Employee Have Under Colorado FAMLI?

Most employees are eligible for up to 12 weeks of paid leave under Colorado FAMLI, although women who experience complications during pregnancy or childbirth may get an additional four weeks.

What are the Benefits Available to an Employee Under Colorado FAMLI?

The benefits available to an eligible employee vary depending on the employee’s average weekly wage. Since this is an insurance program, it is partial wage replacement, so under Colorado FAMLI, employees will receive between 37% and 90% of their wages while on leave. However, the amount anyone can receive is capped at $1,100 per week.

What If an Employer in Colorado Offers Its Own Paid Leave Plan?

Some employers might already have an established paid leave plan at work, and if this private plan is at least equal to the public FAMLI plan regarding rights, protections, and benefits, then they could opt-out of the state plan.

Employers do have the option of requiring their employees to contribute to the private plan, as long as the employee contribution is not greater than what they would have paid into the state plan. See how Paychex can help you keep up with Colorado laws and regulations as well as make it easier to manage your HR, payroll, and employee benefits.


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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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