Introduction: Understanding FAMLI

Starting in 2024, businesses have to comply with the Colorado Paid Family and Medical Leave Insurance (FAMLI) program, CRS 8-13.3-501, et seq. This law is more than just an excellent example of legislators working overtime to find a clever acronym. It requires significant action by businesses employing Colorado residents. Generally speaking, it sets up a state fund to pay employees who need to take time off for sick leave or other qualified events. Employers need to be aware of the need to pay into this fund, what employees are entitled to and how they ask for it, and what employment practices are forbidden by the act. 

Eligibility and Coverage

The FAMLI program encompasses every business with at least one employee in Colorado. Eligibility requires an employee to earn a minimum of $2,500 in wages subject to premiums or elect coverage as a self-employed individual. Qualified employees can take leave for a variety of reasons:

  • Caring for a new child post-birth or adoption.
  • Assisting a family member with a serious health condition.
  • Managing personal serious health conditions.
  • Exigent circumstances, generally related to the military. 
  • Safety issues related to domestic abuse.

A “serious health condition” involves inpatient care or ongoing treatment, covering a range of physical and mental conditions. If a qualified employee has one of these reasons, they can take protected time off from work.

Compensation During Leave

The most important difference between FAMLI leave and what was already available under the federal Family and Medical Leave Act, from the employee’s perspective, is that FAMLI leave is paid. However, employees do not get their full wages. Instead, there is a complicated formula for calculating how much an employee receives. 

The employee gets 90% of their average weekly wages up to 50% of the state average, subject to certain caps, and then 50% of their average weekly wages over that. So, if the state average wage for a particular point in time is $1,420.00 the calculation might go something like this. Take the employee’s total earnings for the 13 weeks in the last quarter, take the weekly average, and then compare to $710.00 or so, being half the state average. If the weekly wage was at or below this number, the employee gets 90% of that each week. Any amounts above and beyond the $710.00 would be paid at 50%. Thus, in this example, an employee making $1000.00 weekly might expect to get $639 (90% of $710) plus $125 (50% of the $250 that the weekly wage exceeded the average) for a total benefit of $764.00. 

These are, of course, estimates. A business should rely on its own payroll company or human resources representatives to calculate the correct amounts in each individual case. 

Funding the Leave

The weekly payments under FAMLI are paid by the state, not by each employer. But, they are funded by employers paying a new premium on payroll.  The amount may vary by year. For 2024, employers must pay a surcharge of 0.90% of an employee’s wages. In future years, this amount may adjust upwards depending on the needs of the fund. Employers can deduct half of this premium from employee wages in most cases. 

There are some exceptions on who has to pay this premium applicable to government and very small businesses. A business can also avoid this requirement if it establishes its own sick leave plan but that plan has to comply with a series of rules making it basically as comprehensive as the state-run FAMLI plan.

Employer Obligations and Employee Rights

Though the employee makes its claim for payment for FAMLI leave to the Colorado government the employer is entitled to notice of the leave.  To the extent possible, the employee has to make reasonable efforts to schedule leave to avoid undue disruption to the business. If the leave is unexpected, the employee just has to make a request as soon as practicable. 

It remains to be seen whether there is much an employer can do to protect itself against improper claims of FAMLI leave, but there are some provisions that impose penalties. If an employee makes a knowingly false statement or willfully fails to report a fact, they can be barred from FAMLI benefits for a one (1)  year. 

Policing The Use of the Leave

Similar to requirements under FMLA, employers have to allow employees taking FAMLI leave to return to the same or equivalent position for up to 180 days. During the leave, the employer must also continue benefits to the employee. 

A business cannot interfere with, deny, restrain, or retaliate against an employee for taking FAMLI leave. On the flip side, a business also cannot force an employee to use FAMLI as a form of discipline. So, for example, if an employee is put on unpaid leave while misconduct is investigated, it would probably not be appropriate to seek FAMLI compensation. 

A business who violates the FAMLI rules can be liable in a private action brought by the employee. In this action, the employee can seek wages and benefits lost, interest, equitable relief, and potentially double damages unless the employer shows good faith. Interestingly, the penalty provisions of FAMLI seem to specifically incorporate a subsection of another statue, 29 U.S.C. section 2617 (a)(1), to define damages that does not include attorney fees and costs of suit, so whether or not these are recoverable is arguable.

Interplay with Other Benefits

Employers may require FAMLI leave to run concurrently with FAMLI leave. But the employer cannot require other benefits, such as accrued vacation time, sick leave, or other paid time off to be exhausted prior to using FAMLI. It appears that so long as the employee is not being required to do this, the employee can choose to use FAMLI instead of these other forms of leave. Given the interaction with Colorado’s law regarding payment of wages, employees arguably have an incentive to use FAMLI over these other kinds of leave in some cases. 

Businesses should remember that FAMLI leave is distinct from and in addition to the requirement that businesses provide up to 48 hours of paid sick leave a year to each employee under the Healthy Family Workplace Act. That kind of leave is paid by the employer.


For any inquiries related to FAMLI or if you require the expertise of a skilled Denver Business Lawyer to assist and guide you, don’t hesitate to contact Underhill Law today.