Employee and employer contributions begin for state-run paid family leave

COLORADO (KRDO) -- Colorado voters approved Proposition 118 in November of 2020, paving the way for the state-run paid family and medical leave insurance program, also known as "FAMLI."

Premium payments began on Jan. 1, which means employees started seeing deductions on their wages. Employers can start paying their contribution now, but it's required starting Apr. 30.

The state says the FAMLI program helps ensure that Colorado workers have access to paid leave when they need to take care of loved ones who are sick or start or grow their families.

The program works by siphoning off funds now to be used later. In Jan. of 2024, employees will be able to cash in on the paid leave.

Premiums for FAMLI are set at 0.9%, which is split by the employee and employer, each paying 0.45%. Premiums may be adjusted in future years but are capped by law at 1.2%.

Glenn Carlson is the owner of Absolute Body Balance in Colorado Springs and said he is happy to fund the paid time off for his employees and thinks it's a good thing.

"As a small business, shopping for things like health insurance for our staff is incredibly difficult and incredibly expensive," Carlson said.

His business already had maternity leave in place for their employees, so he said it's not a major change. However, he recognizes the new plan may be harder on businesses that don't already have money set aside or have a longer training time for their employees.

Right now, businesses with nine or fewer employees aren't required to cover the employer's share of premiums. They are only responsible for deducting and saving 0.45% of the employees' shares to the FAMLI division once a quarter.