All employers must begin collecting premiums for Colorado’s state-run paid family and medical leave insurance program on Jan. 1, 2023. Details regarding recently released Private Plan Rules can also be found below.
ADP® will automatically set up your Colorado FAMLI tax profile with the same service level as your CO SUI tax profile.
Beginning with payrolls with pay dates on or after Jan. 1, 2023, ADP will withhold employees coded to Colorado SUI. While these premiums cover both family leave and medical leave, they will be withheld in the single FAMLI Tax field.
The Details
Here are some key details about premiums for the program:
- If an employer has 10 or more employees, both the employer and employee must pay a share of the premium. For 2023 and 2024, the employer’s and employee’s share are set at 0.45 percent of wages each (for a total of 0.9 percent). If an employer has fewer than 10 employees, only the employee must pay a share of the premium (0.45 percent of wages in 2023 and 2024). Employers can estimate premium amounts using a calculator created by the state. The law allows employers to pay all or part of their employees’ share of the premium cost.
- Employers with 10 or more employees in the first quarter of 2023 must pay the employer share of the premium for all calendar quarters in 2023, even if they dip below that threshold during the year.
- When calculating the number of employees, employers must count all employees companywide who were employed during 20 or more workweeks in the previous calendar year. The number of employees employed by an employer will not affect an individual's right to FAMLI leave. More information regarding counting employees and employees living in Colorado but working in another state and employees working in Colorado but living in another state can be found in the FAMLI Division's Premium Rules at 7 CCR 1107-1, Section 1.5.6.
- Employers are prohibited from deducting the employee share of the premium for a pay period where there is a lack of sufficient wages to cover the premium for that pay period.
- Employers are also prohibited from collecting missed premiums from employees in later pay periods. If an employer fails to deduct the maximum allowable employee share of the premium from wages paid for a pay period, the employer is considered to have elected to pay that portion of the employee share.
- Premiums will become due to the state no later than the last day of the month immediately following the end of the calendar quarter for which the premiums have accrued.
Wages Subject to Premiums
Premiums are paid on wages up to the federal Social Security Wage Cap, which is $160,200 in 2023. For the purposes of the premiums, wages include:
- Salary or hourly wages, including wages as defined under the state’s unemployment insurance law, and other compensation, including board, lodging, payments in kind, and/or other benefits provided as compensation for services performed by employees; and
- Commissions, payments on a piecework basis, or bonuses earned for labor or services performed in accordance with the terms of any agreement between an employer and employee.
- Any tips/gratuities and service charges when used by the employer in order to meet the minimum-wage requirements of federal or state law will be deemed to be wages. Wages will also include tips that are received while performing services that constitute employment and that are made known to the employer through a written statement furnished by the employee.
- Tips/gratuities and service charges will also be considered to be wages when the employer exercises significant control over the amount and distribution of money received by an employee as a tip/gratuity or service charge. An employer is considered to have significant control over tips/gratuities or service charges when they are collected by the employer and then redistributed to employees.
An employee’s wages will be subject to premiums for all services performed within Colorado and for all services performed both within and outside of the state in certain scenarios. See the state’s Premium Rules for details.
Tax Deposits and Filings
Premiums will become due to the state no later than the last day of the month immediately following the end of the calendar quarter for which the premiums have accrued.
Private Plans
The Regulations Concerning Private Plans, (7 CCR 1107-5) were formally adopted on November 1, 2022. The complete Private Plan rules are now adopted and published on the state’s rules page. Some notable changes from the proposed rules include but are not limited to:
· Approved private plans must take effect no earlier than 60 days after the application date.
· Private plan approvals are good for eight years, with more frequent data reporting and program attestation requirements.
· Employers applying for private plan approval will be subject to an initial $500 administration fee.
· Employers with approved private plans will be responsible for an annual maintenance fee based on the administrative costs of their particular plan.
· If an employer moves from a private plan to the state-run FAMLI plan, there will not be a fee to do so.
In order to qualify for an approved private plan, the plan must provide all of the same rights, protections, and benefits as the FAMLI program.
All Colorado employers will begin paying premiums in 2023. Those who secure an approved private plan effective on or before January 1, 2024 may apply for a refund of paid 2023 premiums, minus the private plan administration fee.
The state anticipates opening the private plan application process sometime between Q1 and Q3 next year and will provide how-to guides with step-by-step instructions to complete the process within My FAMLI+ Employer once the functionality is available.
The deadline to submit a private plan application in order to receive a refund for 2023 premium payments is October 31, 2023.
Next Steps:
- Register with the Division of Family and Medical Leave Insurance (DFMLI) via “MyFAMLI+ Employer”.
- ADP® will automatically set up your Colorado FAMLI tax profile with the same service level as your CO SUI tax profile.
- Beginning with payrolls with pay dates on or after Jan. 1, 2023, ADP will withhold employees coded to Colorado SUI. While these premiums cover both family leave and medical leave, they will be withheld in the single FAMLI Tax field.
- ADP is in the process of finalizing updates to our system to support the FAMLI withholding and deposit.
- You may receive a notification in ADP SmartCompliance® when this new tax profile is set up.
- Review the private plan rules if you are considering a private plan option.
- Visit the CO Department of Labor and Employment’s website for more information.