The changing of the calendar is often accompanied by the start of new laws and state programs that apply to employers. The following is a brief summary of the biggest changes that employers need to be aware of as they move into 2023.
Family and Medical Leave Insurance (FAMLI)
Withholding to fund Colorado’s new Family and Medical Leave Insurance program went into effect as of January 1, 2023, and benefits under the program will be available beginning January 1, 2024. Employers should take the following steps to comply:
- Notify employees of payroll deductions by posting the Required Program Notice[1] in a prominent, visible workplace location.
- Take payroll deductions to cover FAMLI premiums.
- Prior to April 30, 2023, register with the state’s online portal (“My FAMLI+ Employer”), and submit quarterly wage report and remit premium payments.
Employers may also apply for a private plan exemption if they use a private insurance plan that offers the same or greater benefits and protections of the state-run FAMLI plan. All private plans must get approval from the FAMLI Division.
Once benefits are available starting in 2024, employees will be able to take up to 12 weeks of leave for family/medical reasons, and the state program (not the employer) will pay the employee a partial wage replacement. An employer may not require the employee to use sick, vacation, or PTO leave while out on FAMLI leave, but employees may choose to do so to supplement FAMLI up to 100% of employee’s pay.
Colorado SecureSavings
Colorado’s new SecureSavings program applies to private-sector employers who have been in business for two or more years and who have 5+ employees. Employers can obtain an exemption if they already offer a retirement plan.
For employers who participate in the program, all employees will be auto-enrolled and a deduction will need to be taken out of their paycheck. Employees will have the option to unenroll or to change their contribution amount. Employee contributions will go towards a Roth plan, meaning that the max contribution is $6,000 and high-income employees will not be eligible to contribute.
Employers with 50+ employees must register with the state by March 15, 2023, employers with 15-49 employees must register by May 15th, 2023, and employers with 5-14 employees must register by June 30th, 2023.
Healthy Families and Workplaces Act (HFWA) & Public Health Emergency Leave
While Colorado’s Healthy Families and Workplaces Act has been in effect for a couple years now, many employers have not yet updated their leave policies to reflect the law. Starting on an employee’s first day of employment, employees accrue 1 hour of HFWA leave per 30 hours worked, capped at 48 hours per calendar year. Employees are permitted to use this leave as soon as it accrues for qualifying reasons, such as sickness, caring for a family member with a sickness, or needs due to suffering from domestic violence.
In addition to paid sick leave, all employers in Colorado are also required to provide Public Health Emergency (“PHE”) Leave while state and federal PHE’s remain declared. Employees are entitled to receive up to two weeks’ worth of leave to be used by the employee for COVID-related needs. The two weeks of leave is usable only once per public health emergency, so an employee who already used the entire two weeks of leave in 2021 or 2022 cannot use the time again. Employers cannot require documentation from employees to show that leave is for PHE-related needs. Based on the current emergency declarations, PHE emergency leave will continue at least until May 2023.
Colorado and National Restrictions on Non-Compete Agreements
Beginning in August 2022, Colorado enacted a new law that prohibited the use of non-compete agreements unless the employee earns $101,250 annually (increased to $112,500 for 2023). Likewise, non-solicit agreements were prohibited for employees earning less than $60,750 annually (increased to $67,500 for 2023). However, this prohibition does not apply to individuals who sell a business, nor does it prohibit the use of confidentiality provisions.
The Federal Trade Commission has proposed a new rule that would ban employment-related noncompete clauses nationwide. If it takes effect, all current employment-related non-competes would be rescinded and employers would be required to actively inform their employees that the non-compete is no longer in effect. However, as of this writing, the FTC is still accepting comments on the proposed rule, and no final rule has been enacted. Further, if such a rule is enacted, it is likely that there will be litigation on whether the FTC has the power to enact the rule. Employers who use (or intend to use) non-compete agreements will need to watch for further updates.
Other Miscellaneous Updates
- For 2023, the Colorado minimum wage rate is $13.65/hr. In the city of Denver, the 2023 minimum wage rate is $17.29/hr.
- In 2022, the Colorado Department of Labor defined vacation leave as any leave that is usable at the employee’s discretion, regardless of what the employer calls the leave (vacation leave, pto, personal time, etc.). Further, any time classified by the Department of Labor as vacation leave must be paid to the employee upon termination of employment. However, bereavement leave, medical leave (including leave required under HFWA), and holidays are not payable at termination.
- Beginning in 2022, Colorado’s unemployment division began requiring employers to provide a letter to employees who are terminating employment, whether the termination is voluntary or involuntary. The letter must include (1) dates of employment, (2) year to date earnings, (3) earnings for the last week worked, (4) reason for separation, and (5) employer information – legal name, address and FEIN.[2]
Please contact our office if you have further questions about any of these topics or need legal help with other employment issues.