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FAMLI Newsletter — January 31, 2023

Welcome to the Colorado Department of Labor and Employment (CDLE)'s newsletter for Colorado’s new paid Family and Medical Leave Insurance (FAMLI) program. You’re receiving this newsletter because it includes important legal updates that will impact your business in some way. 2023 is here, and it’s a busy year for the FAMLI Division! Remember you can also get these updates sent directly to your mobile phone, just add your mobile number to your subscription preferences, and select SMS/text message.

FAMLI Payroll Deductions Are Underway!

Most Colorado workers are seeing changes on their paychecks this year, as payroll deductions are now underway!

As of January 1, 2023, Colorado employers and employees started contributing to the new FAMLI program. The contributions are building the fund that will eventually provide Coloradans wage replacement benefits during life circumstances that pull them away from their jobs. This time next year, Coloradans will be able to receive paid leave for things like bonding with a new child, taking care of a loved one with a serious health condition, or preparing for a loved one’s military deployment. 

All Colorado employers are required to register with the Division before the first wage reports and premium payments are due on April 30, 2023. If your business hasn’t registered yet, you can get started with step-by-step user guides and how-to videos on our My FAMLI+ Employer page. 

Important information for Self-Employed Workers

The FAMLI Division has recently received a lot of questions about self-employed workers in Colorado. Self-employed individuals and independent contractors will have access to FAMLI benefits, but their participation in the program is optional. If you are considered as a self-employed individual and decide to opt into FAMLI, you must agree to participate by paying premiums and reporting your income for a minimum of three years. Self-employed workers can opt in once benefits become available in 2024. No action is required until then. 

What if you do not want to participate as a self-employed worker?

Self-employed individuals who do not wish to participate in FAMLI do not need to take any action to opt out of the program. You do not need to register in order to opt out. You will only need to register in order to voluntarily opt in and commit to paying premiums for three years once you can self-elect coverage in 2024.

We have more details on how self-employed workers count their earnings on our Individuals & Families page, and if you're unsure about whether or not you are considered self-employed, check out this blog post on self-employed individuals.

January 2023 Webinars: 

We started 2023 with a live webinar focused on employers who use Third Party Administrators (TPAs). We’ve also added two new videos to our TPA page to guide both the TPAs and employers about the FAMLI registration process and making the necessary TPA-employer relationship. If you missed the conversation, don’t worry, all of our webinars are published to our webinar page and our official YouTube Channel.

Upcoming Webinars

The FAMLI team will be hosting a live webinar on Wednesday, February 22 from Noon - 1 p.m. The FAMLI team will be answering your questions live. Please register in advance, as attendance is limited to 500 people. If we reach capacity, you’ll be able to watch the webinar streaming live on YouTube. We’ll also send a recording of the webinar to everyone who registers and publish it to our website following the session. 

Share Your Story With Us!

We want to hear your personal stories. Please tell us how FAMLI could have or will help you. We’ll be sharing stories from both individuals and employers in our newsletter and across social media. This month we’re featuring a story from Katy:

In 2019, I was in a severe car accident that put me out of work for over 6 months. My parents had to take some time off to care for me, so nobody was making any money for a while. A paid family leave program would have reduced the burden off of my whole family. We would’ve been able to pay rent on time, I could’ve paid some of my medical bills, I wouldn’t have had to worry about being homeless while I was recovering from life-threatening injuries. I know this will help so many families in the future!

People Are Asking:

Q: How do I determine the in-state status of employees?

A: An employee’s wages will be subject to premiums if:

• The employee's work is performed entirely within Colorado;
• The employee performs work both within and outside of Colorado, but the work performed outside of Colorado is incidental to the employee's work within Colorado, or is temporary or transitory and consists of isolated transactions; or
• The employee's work is not primarily localized in any state, but some work is performed in Colorado, and one of the following is true:
• The employee's base of operations is in Colorado, or if there is no base of operations, the place from which the employee's work is directed or controlled is in Colorado; or
• Neither the base of operations nor the place from which some part of the work is directed or controlled is not in any state in which part of the employee's work is performed, but the employee's individual residence is in Colorado. More information regarding localization can be found in the FAMLI Division's Premium Rules at 7 CCR 1107-1, Section 1.5.6.C.

We know this is complicated, so we created the following decision tree to help you determine Colorado localization when it comes to employees being subject to FAMLI:

Q: Is employee count based on how many employees work in Colorado or on an employer’s total nationwide headcount?

A: To determine employer size for the purpose of determining your employer liability for premiums, employers must count all employees nationwide. However, only Colorado-employees are subject to FAMLI Premiums contributions and entitled to FAMLI benefits.

For example, if you have 15+ employees nationwide, and eight working completely in Colorado, the employer would be required to pay the 0.45% employer's share and collect and remit the 0.45% of the employee's share (for a total of 0.9%) for each of those eight employees because the employer has more than ten total employees.

The map below also illustrates this concept:

Q: Will FAMLI require employers to report if they paid a portion of their employees’ premiums?

A: Employers may choose to cover any amount of the employees’ portion of the premium. The most an employer can deduct from an employee is 0.45% of their wages, but the employer can choose to only deduct 0.1% or 0.2% or deduct nothing at all. Regardless of how much is deducted from the employee, the employer will be responsible for remitting the full 0.9% of the premium to the Division once per quarter starting in 2023. Typically if an employer fails to deduct the maximum premium permitted, they are considered to have voluntarily elected to pay the remaining premium on behalf of the employee. When employers submit their quarterly wage reports, employers are required to identify what portion, if any, they withhold from each employee. We have more details on submitting your wage reports including file specifications and file templates on our website here.

Q: How do employers report FAMLI deductions on IRS form W-2?

A: Employers should report such deductions on IRS form W-2 in Box 14, and list “FAMLI” as the label. The FAMLI Division does not regulate income tax reporting requirements, and we encourage employers to confer with counsel, their accountant, and/or the IRS to ensure compliance. You can find more information about FAMLI and taxes here. 

Q: What is the difference between gross wages and subject wages?

A: Gross wages are the individual's total earnings or their salary or hourly wages, vacation pay, holiday pay, tips, commissions, severance pay, etc. including the cash value of "in-kind" payments. Subject wages are the individual's wages that are subject to the FAMLI program. Please refer to the table under “Types of Payments that are Considered Wages” for more details on what is considered subject wages.

Q: Where can I find my FAMLI account number?

A: To get your account number, you’ll need to register and create an account in MyFAMLI+ Employer. Once you complete your registration, you’ll receive a 10-digit FAMLI ID number on a confirmation screen and in a confirmation email. If your payroll administrator or Third Party Administrator (TPA) registered on behalf of your employer, they will have your FAMLI account number. If you already registered, you’ll be able to find your account number by logging into your My FAMLI+ Employer account and navigating to “Manage Accounts” from your dashboard.