What You Need To Know About Colorado’s Paid Family and Medical Leave Insurance Act

In January, roughly 2.69 million Colorado workers will finally have access to three months of time off for childbirth, sick leave, and other difficult life events—with compensation. Voters passed the Paid Family and Medical Leave Insurance (FAMLI) Act in November 2020, and for the past year, companies and employees have been paying into the program. Now that FAMLI’s coffers are full, folks can start applying for benefits next month. But before you do, here are five key points to keep in mind.

Paid leave doesn’t mean full pay

Most Coloradans who have earned at least $2,500 in the past year are eligible for FAMLI. But benefits are doled out on a sliding scale, with the lowest earners receiving around 90 percent of their average weekly wage and applicants collecting a smaller percentage as their salaries increase. Regardless, there’s an $1,100 weekly max payout.

What this means IRL: The state’s benefits calculator (famli.colorado.gov) will ballpark how much you qualify for. And speak with your employer: It can’t require you to take PTO before or during your leave, but you may be able to use it to fill in the gap between your benefits and the rest of your wage.

The program embraces an expansive definition of family

When someone gets sick, caretaking isn’t limited to parents or spouses. So lawmakers used a broad definition of family that includes those with whom you have significant personal bonds, as evidenced by shared finances, emergency contact designations, geographic proximity, and expectations of care when you fall ill.

What this means IRL: While the broadened definition applies equally to everyone, it was designed with inclusivity in mind, especially for members of the state’s immigrant communities who may not have relatives nearby and for those who identify as LGBTQ and otherwise might not be recognized as caretakers.

You’ll have to wait for job protection

You don’t have to work a minimum number of days in order to qualify for FAMLI benefits, but you do have to have been employed at your current gig for at least 180 days to guarantee your position will be waiting for you when you get back.

What this means IRL: If you’ve started a new job and you or a loved one gets hurt, your employer can fire you if it feels that you’re taking too much time off.

Self-employed workers and independent contractors can opt in

Most Colorado workers will automatically pay FAMLI premiums. Self-employed folks can participate, too, but once they opt in, they’re locked in to paying premiums directly to the state for three years.

What this means IRL: While you have to sign up for three years, there’s no enrollment period, so you can take leave immediately after opting in—you’ll just pay for it later.

It’s not clear how the IRS is going to deal with FAMLI pay

Colorado won’t tax FAMLI benefits. The IRS, on the other hand, has yet to say if the payments are subject to federal income tax. So far, residents of other states with similar laws haven’t had to pay up.

What this means IRL: You’ll want to talk to a tax professional before you file and share the state-provided 1099 form with them, just in case.