Colorado Issues Final Rules on Paid Family and Medical Leave

​Colorado's rulemaking process regarding its new paid family and medical leave insurance program (FAMLI) continues.

On Aug. 26, the state published final regulations, which provide the most concrete guidance to date regarding the benefits to which employees will be entitled under the FAMLI program as of Jan. 1, 2024.

Under the FAMLI statute, all workers are entitled to FAMLI benefits once they have earned $2,500 in Colorado at any point over the preceding year. This $2,500 threshold can be met from any combination of employers. Functionally, most Colorado employees will thus be eligible for FAMLI benefits on or soon after day one of their employment, unlike the federal Family and Medical Leave Act (FMLA), which provides that employees are not eligible for FMLA benefits until they have been employed for at least 12 months.

Under FAMLI, an employee is entitled to up to 12 weeks of paid leave for qualifying reasons, plus an extra four weeks for pregnancy or childbirth-related reasons, on a 12-month period rolling backwards, beginning on the first day in which an employee begins taking FAMLI benefits. Again, this differs from the FMLA, which gives employers the option of calculating a 12-month period based on a calendar year, any fixed 12-month period, or a 12-month period rolling forward or backward. Employers may only use the 12-month period rolling backwards period in evaluating benefits eligibility under the FAMLI program.

The process for how employees may apply for benefits is clearly spelled out in the new guidance. Employees will apply for benefits directly to the FAMLI Division, unless an employer has been approved to use a private plan to meet its FAMLI obligations. Such applications may be submitted at least 30 days prior to an anticipated start date for benefits, although the FAMLI Division will consider applications submitted at least 30 days after leave has begun if earlier notice was impracticable under the circumstances.

Employees must provide different forms of information, depending on the nature of their leave. For example, an application to take leave for an employee's own serious health condition will require the employee to submit a "Serious Health Condition Certification – Self Form," while a separate "Serious Health Condition Certification – Family Member Form" will be utilized if the leave is in connection with a family member's serious health condition.

Once the FAMLI Division receives an application for benefits, it will notify the claimant's employer of the application within five business days. Employers can require employees to inform the employer directly of the need for FAMLI leave, separate from the division providing notice of the benefits application. Employees should notify employers of their need for leave in the same manner as they would typically communicate work unavailability and should follow the employer's usual and customary notice and procedural requirements for leave.

Adjudication of Claims and Appeals Processes

Once an application for FAMLI benefits is submitted, the division will adjudicate the claim for benefits within two weeks. The division will notify the employee and employer of the outcome of the claim.

If benefits are approved, the division's notice will include the leave start date, leave duration, any denied segments of requested leave, and a description of any approved reduced leave or intermittent leave where applicable. Upon the employer's request, the division will share certain information regarding the benefit amount and reason for leave to ease coordination with other employer-provided benefits, such as PTO, sick leave, or other paid leave.

The guidance explains separate and distinct mechanisms by which employers and employees may appeal a benefits determination. If an employer has a good-faith belief, supported by evidence, that an award of benefits was erroneous, it may submit a grievance to the division. This grievance may be based on the approved benefits being in an amount, duration, or frequency beyond what the claimant is entitled, or in such a way that unduly disrupts the employer's operations. The division will then investigate and adjudicate the employer's grievance.

If a claim for benefits is denied, the employee may appeal the adverse determination. Such appeals must be made within 30 days of the adverse claim determination, although that period may be expanded to 60 days upon a showing of good cause. The division will designate a hearing officer to review the matter. Both the employee and employer will have the right to participate in the appeal hearing. If the appeal is upheld, the employee may seek recourse in the courts. Employers may require a worker to submit a fitness-for-duty certification upon their return to work after a serious health condition, similar to the process under the FMLA.

Private Plans

On Aug. 31, the state posted a webinar that addresses the process by which employers can meet the legal requirements through a private plan, as opposed to the public, state-run plan. The state repeatedly emphasized that rules on private plans have not been adopted and that it is currently undertaking stakeholder meetings to ensure the final rules address the interests of employers and insurers. Its current guidance is not final and is subject to change.

A private plan must provide equal or greater benefits and protections than the public FAMLI plan. As compared to the public FAMLI program, the private plan must:

• Provide the same number of weeks of benefits.
• Provide the same level of wage replacement.
• Include no additional requirements or conditions.
• Deduct no more than the same amount from employee paychecks to fund the plan.
• Cover all employees through the duration of their employment. (New, part-time and temporary employees must be eligible for the paid family and medical leave benefits if they have earned $2,500 in Colorado.)
• Remain compliant with all other FAMLI requirements.
• Be approved by the state as compliant.
  

All employers will need to collect and remit premiums under the FAMLI program beginning Jan. 1, 2023, even if the employer intends to meet the FAMLI requirements through a private plan. However, employers will be eligible for a refund of these premiums if they have received approval by the state for a private plan with an effective date on or before Jan. 1, 2024.

The state will issue separate rules on the coordination of FAMLI benefits with other paid and unpaid leave benefits, as well as amendments to the local government rules adopted early in 2022.

Even though employees will not be entitled to FAMLI benefits until Jan. 1, 2024, employers do have obligations with a more imminent deadline. By Jan. 1, 2023, Colorado employers must register with My FAMLI+, the state-run portal expected to launch sometime in late 2022. Starting Jan. 1, 2023, employers will need to begin to withhold premium payments and submit quarterly wage reports through the My FAMLI+ portal.

David Gartenberg and Carolyn Theis are attorneys with Littler in Denver. © 2022. All rights reserved. Reprinted with permission.