All employers with employees working in Colorado should be well aware by now that, regardless of size or industry, employees are entitled to paid sick and safe leave pursuant to the Healthy Families and Workplaces Act ("HFWA").
On both June 24 and Aug. 2, 2022, the Colorado Department of Labor and Employment's Division of Labor Standards and Statistics ("Division") issued yet additional revised and updated guidance as to the HFWA. Interpretive Notice & Formal Opinion ("INFO") #6B, which provides the Division's interpretations with respect to employers' HFWA compliance obligations and employees' rights. The Division also released an updated Colorado Paid Leave, Whistleblowing, & Protective Equipment Poster on June 1, 2022.
Brownstein has previously covered the passage of HFWA ("Colorado Implements New Paid Sick Leave Requirements" and "Colorado Enacts Expanded COVID-19 Paid Leave"). This new update highlights the current HFWA obligations for employers, including the Division's most recent changes to INFO #6B. Additionally, we preview the upcoming implementation of the Colorado Paid Family and Medical Leave Insurance Act ("FAMLI"), C.R.S. Sections 8-13.3-501, et seq.
Summary of HFWA
Under the HFWA, employers are required to provide all employees working in Colorado (e.g., full-time, part-time and temporary employees) with two types of paid sick and safe leave: (1) Accrued Leave and (2) Public Health Emergency ("PHE") Leave. Employers must provide each worker with up to 48 hours of Accrued Leave per year, for use for various health- and safety-related purposes. Accrued Leave may be frontloaded at the beginning of the year, or the employee may accrue it at a rate of one hour for every 30 hours worked.
During a public health emergency, employers must also provide up to 80 hours of PHE-related leave when a PHE is declared. The COVID-19-related PHE was declared by Gov. Jared Polis on March 11, 2020, and since Jan. 1, 2021, all employers in Colorado have been required to provide the PHE-related supplemental leave. (A PHE exists under the HFWA if there is a pandemic, infectious disease or other disaster emergency declared at the federal, state or local health agency level; currently, the state and federal emergency declarations regarding COVID-19 remain in effect.) The PHE Leave is required for the duration of the emergency and until four weeks thereafter. Effective Jan. 1, 2022, an employer is only required to grant an employee one PHE Leave supplement of up to 80 hours. That is, once an employee has exhausted the PHE Leave supplement, an employer is not obliged to provide additional leave beyond the Accrued Leave right.
Compliance with the HFWA has been a moving target since its passage. When the HFWA was enacted, many employers understood that if it had a paid time off ("PTO") plan that provided as much or more leave as required by HFWA, they would not have to promulgate a new paid leave plan to comply with the HFWA. The employer community was shocked to discover in summer 2020 that the Division's interpretive guidance actually required employers to quickly stand up a new paid leave program (beyond what it already had in place). It was only with the promulgation of the Division's updated guidance in January 2022 that it became known to employers that a generous PTO plan (as described below) would suffice.
Key Changes to INFO #6B
Timing of PHE Leave. Under the latest versions of INFO #6B, the 80-hour PHE Leave supplement must be provided at the time of the request, unless the employer provides the sufficient number of hours, free and clear at the outset under a more general, PTO policy.
Previous guidance did not have a timing requirement, such that it was acceptable for an employer to frontload a 32-hour PHE Leave supplement (for full-time employees) if their Accrued Leave had also been frontloaded (in effect, providing employees at the outset with a total of 80 hours of paid leave). However, pursuant to the latest revision of INFO #6B, there is a risk that an employee could now claim that a frontloaded grant of 48 hours of Accrued Leave and 32 hours of PHE Leave is not enough under the HFWA because the employee could read this guidance to entitle them to up to 80 hours at the time of the request. Rather, now, the most risk-averse approaches will be for an employer to either provide the PHE Leave at the time of the request, or to sweep HFWA compliance under an as- or more- generous PTO program.
Using Accrued Leave When PHE-Leave-Eligible. INFO #6B, as updated, further clarifies that if an employee has unused Accrued Leave when the need for PHE Leave arises, the employer may count this Accrued Leave as a "credit" toward the amount of PHE Leave that it must provide. However, employers must still allow employees to use the PHE Leave for a PHE-qualifying condition before the employees use the Accrued Leave. For example, if an employee needs to take PHE Leave for two weeks (80 hours), and has 10 hours of Accrued Leave, then the employer is required to provide 70 hours of the paid PHE Leave (because the employer can use the 10 hours of Accrued Leave as a "credit" against the amount owed for PHE Leave).
General PTO Policies Can Comply. The Division announced that, effective January 1, 2022, for purposes of the COVID-19 PHE, general PTO policies comply with the HFWA's requirements so long as the leave policy provides PTO: (1) in at least an amount of hours with pay sufficient to satisfy the minimum requirements of HFWA and the applicable rules, (2) for all the same purposes of the HFWA and applicable rules, not a narrower set of purposes, and (3) under all the same conditions as in HFWA and applicable rules, not stricter or more onerous conditions (e.g., accrual, use, payment, annual carryover of unused accrued leave, notice and documentation requirements, and anti-retaliation and anti-interference rights). For instance, the Division takes the position in INFO #6B that an employer's PTO policy providing employees with 100 hours of fully paid time off per year, at the beginning of each year, for use for all personal absences, including vacation and sick time, complies with the HFWA's Accrued Leave and PHE Leave requirements.
Importantly, employers using their general PTO policy to comply with HFWA must still follow INFO #6B's various requirements. For example, in a situation where an employee does not show up for work due to an HFWA-covered reason, but uses their PTO, employers have been penalized by the Division if the employee suffers an adverse consequence under the company's attendance policy.
Additional HFWA leave need not be provided if employees use all of their PTO for non-HFWA reasons. The only exception would be if a new PHE is declared after an employee uses all of their PTO for non-HFWA reasons in a benefit year.
Rates of Pay. INFO #6B provides detailed guidance to employers regarding the rate of pay requirements for HFWA leave, including that bonus compensation need not be included, as well as how to handle pay rates for tipped workers and employees with variable hourly rates.
Documentation Needed for Paid Leave. An employer's policy will violate the HFWA if it effectively does the following: (1) requires employees to submit a doctor's note or other document from a medical provider whenever they take sick leave; and (2) automatically denies sick leave requests without such documentation. Employers cannot require employees to submit "official" documentation from a medical provider supporting the need for leave under the HFWA. If the employee cannot obtain a document from a health care provider in a reasonable time or without added expense or if the employee did not receive services from a health care provider, then the employee can also submit their own in writing.
Enforcement and Notice/Posting Requirements. Employers that fail to pay for HFWA leave or properly provide employees with HFWA notice can be ordered by the Division to pay additional fines and penalties (or such employers may be sued in court). The updated Colorado Paid Leave, Whistleblowing, & Protective Equipment Poster, which provides notice to employees of their HFWA rights, has been released on the Division website, with updates effective June 1, 2022. The Division requires that employers provide the poster to all new employees, display it in a location that is "conspicuous and accessible" to workers, share it with remote workers, provide it in other languages as needed and replace any annually updated versions with the new updated sign.
No Retaliation. Retaliation and interference with the employee's exercise of rights under the HFWA is prohibited and punishable by damages and the award of attorney's fees. Importantly, an employee's use of Accrued Leave and/or PHE Leave under the HFWA cannot be counted as an "absence" that may lead to termination or other adverse action against that employee.
Impact on Employers
Colorado employers should that this opportunity review and make any necessary revisions to their HFWA and/or PTO policies to ensure compliance with the latest changes to INFO #6B. Further, employers must ensure that they are not running afoul of the HFWA by requiring certain medical documentation, failing to provide notice or proper posting of the poster, or failing to provide the required amount of leave. To that end, employers should immediately update their handbooks, policies and postings to reflect the latest Colorado Paid Leave, Whistleblowing, & Protective Equipment Poster.
What's Ahead? FAMLI – Jan. 1, 2023
By Jan. 1, 2023, all covered employers are required to register with the FAMLI Division. Virtually all employers with employees in Colorado are covered. Thereafter, in 2023, all employers will need to start collecting and remitting premiums starting January 2023, as well as filing quarterly wage reports.
What will FAMLI provide? Effective Jan. 1, 2024, FAMLI entitles covered Colorado workers to paid family and medical leave benefits for work absences caused by a qualifying condition (e.g., serious health condition of the employee or the employee's family member, caring for a new child, or safe leave). Virtually all employers with employees in Colorado are covered. The maximum weekly benefit to a covered individual is $1,100. The maximum leave in an application year is 12 weeks, or 16 weeks if the covered individual has a serious health condition related to pregnancy complications or childbirth complications. Notably, the term "employee" is broadly defined under FAMLI, and in certain circumstances, could be argued to cover independent contractor relationships. Private employers may obtain a "private plan exemption" if they intend to meet their obligations through such a private plan and pay an administrative fee to the Division. However, the exemption rules have not yet been proposed. To the extent an employer pays the 2023 premiums, but obtains a private plan exemption no later than Jan. 1, 2024 , it is anticipated that the Division will reimburse the employer for 2023 premiums, less the administration fee. The reimbursement will not be available for plan exemptions granted after Jan. 1, 2024.
In a forthcoming alert, Brownstein will provide further details on FAMLI, including the anticipated regulatory cycle, analyzing the proposed regulations and guidance, evaluating the interplay with HFWA and PTO policies, and addressing steps employers may consider as we enter the fourth quarter of 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.