Colorado Laws Complicate Multi-Jurisdictional Leave Policies

Colorado, like a growing number of other states, requires that employers provide specific types of employee leave. Many state-mandated leave laws have common elements...
United States Employment and HR
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Colorado, like a growing number of other states, requires that employers provide specific types of employee leave. Many state-mandated leave laws have common elements (with some even having identical, overlapping language), but rarely will an employer's existing multi-jurisdictional leave policy satisfy the myriad state-specific requirements. Even those employers with a single employee working in Colorado need to be mindful of the nuances of the Centennial State's leave laws. To ensure compliance, employers should make sure their multi-jurisdictional policies are current and drafted broadly enough to capture various state requirements or, alternatively, prepare state-specific policy and handbook addendums.

Colorado's Healthy Families and Workplaces Act (HFWA) sounds similar to many other paid sick leave laws (i.e., California's Healthy Workplaces, Healthy Families Act; Maryland's Healthy Working Families Act; New Mexico's Healthy Workplace Act; Rhode Island's Healthy and Safe Families and Workplaces Act, etc.), but it has a number of unique aspects to its substantive employee rights and employer obligations.

HFWA applies to employers with one or more employees in Colorado and covers all employees, including part-time, seasonal, and temporary. Employers must provide up to 48 hours of paid sick leave per year, which can be used for various reasons, including, among others, inability to work due to illness or injury, attending medical appointments, or the need to care for a family member. Beyond these familiar reasons for sick leave, however, Colorado's HFWA also allows employees to take leave for bereavement, financial, or legal needs after the death of a family member, or to evacuate their residence or care for a family member whose school or place of care has been closed because of inclement weather, power/heat/water loss, or other unexpected events. Employers are not permitted to request documentation for HFWA leave unless an employee is absent for four or more consecutive days the employee ordinarily would have worked.

Another factor complicating multi-jurisdiction leave policies is variation in state statutory or regulatory definitions, such as HFWA's definition of "family member." Colorado's law goes beyond many traditional definitions of "family member" to include anyone for whom "the employee is responsible for providing or arranging health- or safety-related care." Finally, notice and posting requirements vary from state to state. Colorado mandates that employers display a HFWA poster and provide individual notice of HFWA rights to employees.

The most recent Colorado law to throw a wrench in employers' multi-jurisdiction leave policies is the paid Family and Medical Leave Insurance Act (FAMLI). Virtually all employers with one or more employees in Colorado are covered by FAMLI, and virtually all employees working in Colorado, even relatively new hires, are eligible for FAMLI leave benefits. For those employers subject to the federal Family and Medical Leave Act (FMLA), unfortunately, compliance with the FMLA will not satisfy FAMLI. Likewise, participation in another state's family leave insurance program will not satisfy FAMLI.

The FAMLI insurance program is run by the state of Colorado and provides partial wage replacement for up to 16 weeks for employees approved to take leave for qualifying reasons. Employers who are self-insured or insured by a third-party private plan providing the same or more generous benefits can apply for an exemption from the state plan.

In the months since the FAMLI program went live on January 1, 2024, coordinating FAMLI leave and benefits with employers' existing leave and paid time off policies has proved to be challenging. While employers can require that FAMLI leave run concurrently with FMLA leave, employees cannot be required to use accrued vacation, sick leave, or other paid time off before or during FAMLI leave. Employers and employees may mutually agree that such accrued paid time off be used to supplement or "top off" FAMLI benefits in order for an employee to receive full pay during FAMLI leave. With prior written notice to the employee, employers are permitted to coordinate FAMLI benefits with employer-provided short-term and long-term disability benefits.

Multi-jurisdictional paid time off and vacation policies are another area that can be tricky for employers with Colorado employees. Under Colorado law, "use it or lose it" policies are unlawful. Once discretionary paid leave (whether called vacation, paid time off, personal days, floating holidays, or any other label meaning paid leave that can be used for any purpose at the employee's discretion) is earned, it cannot be forfeited or waived for any reason and must be paid out on separation. This means that, while employers may cap the amount of vacation time that can be accrued in a year or in total, they may not cap the amount of accrued vacation time that can be carried over from year to year. An employer's failure to pay out earned vacation on separation, or policies that result in forfeiture of earned paid time off, can trigger claims of wage theft subject to criminal liability.

In addition to those highlighted above, Colorado has numerous other paid and unpaid employee leave requirements, such as leave for crime victims, jury duty, voting, disaster relief volunteerism, domestic violence, and military service.

Viewed individually, these Colorado-specific leave mandates might seem close enough to other states' requirements that an employer with only a handful of workers in Colorado may be tempted to run the risk of technical noncompliance. Colorado is not the state in which employers want to test their luck, however. With an increasingly active and aggressive administrative enforcement division, even relatively minor notice and posting violations can result in hefty fines and penalties. Keep in mind the old adage "An ounce of prevention is worth a pound of cure" and consider engaging experienced employment counsel to advise on tweaking your policies to bring them into compliance.

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.

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