Colorado voters approved Proposition 118 in November 2020, paving the way for a state-run Paid Family and Medical Leave Insurance (FAMLI) program. The FAMLI program will ensure all Colorado workers have access to paid leave in order to take care of themselves or their family during life circumstances that pull them away from their jobs — like growing their family or taking care of a loved one with a serious health condition.
Both employers and employees will contribute premiums to the program. Premium payments begin in 2023, so employees may start to see a FAMLI premium deduction on their pay stubs beginning January 1, 2023. FAMLI will start providing benefits to employees beginning January 1, 2024. Most eligible employees will receive up to 12 weeks of leave. Those who experience pregnancy or childbirth complications may receive an additional four weeks.
PERA has been tracking the FAMLI laws, rules, and guidance to determine what, if any, impact there will be on PERA-includable salary for both premium payments as well as benefit payments. At this time, under current guidance, PERA can provide the following information:
- Employee-paid FAMLI premiums to the state fund will not reduce PERA contributions. Under current law, there is no exception that FAMLI premiums will reduce PERA-includable salary. For example, if an employee pays $50 in premiums, that $50 is includable in PERA salary and PERA contributions are owed on that amount.
- FAMLI benefit payments from the state fund or from a private plan are not likely to be PERA-includable salary. Thus, an employee who is receiving these payments will not receive service credit or salary for those payments. If an employer is self-insuring the FAMLI payments in lieu of using the state fund, and is providing payments directly to employees, those payments may be includable. If you have questions regarding whether payments from a private or self-insured plan are includable salary, PERA would need to review those plans and payments prior to the effective date for payment.
For additional information on the program, please refer to the Family and Medical Leave Insurance Program (FAMLI) page on the State of Colorado’s Department of Labor and Employment website.