Mandatory Payroll Deductions Begin in January for Two Colorado Programs

By Randi Lewis posted 08-26-2022 09:45 AM


Beginning January 1, 2023, Colorado employers will have two new state mandates that will affect employees’ paychecks. These new programs, the Colorado Secure Savings Program and the Colorado Family and Medical Leave Insurance Program (FAMLI), are intended to help employees have access to retirement savings and paid family leave if their employer does not offer similar programs that meet the requirements. While employees may welcome these increased benefits, you won’t want them to be surprised about the impact on their pay.

Secure Savings

  • Background: The Colorado Treasury Department is developing an online portal for employers to onboard to the program. Employers that do not sponsor a tax-qualified retirement or savings plan and have at least five employees will need to register through the portal when it becomes available later this year. Subject employers will need to input identifying data for each eligible employee, enabling the State to send that employee a notice with information about Secure Savings. The notice will give the employee 30 days to opt out of the program or specify a contribution amount different from the automatic contribution of 5% of pay.

  • What to communicate now to your employees: Let employees know that the purpose of the Secure Savings Program is to make it easy for employees to save for their retirement through payroll deductions to individual retirement accounts (IRAs). Employees will have the opportunity to: 1) allow the automatic 5% of pay contribution to begin, 2) designate a different amount of contribution, or 3) opt out of the program during a 30-day window in January. Tell employees you will share details about the Secure program as they become available from the State. You can also share the state-provided Employee Overview.


  • Background: All employers with one or more employees in Colorado, except local governments that have opted out, must begin paying premiums to the State effective January 1, 2023. For employers with nine or fewer employees, the total premium amount is 0.45% of an employee’s wages, which can be deducted from the employee’s pay with no employer contribution. For employers with more than nine employees, the premium is 0.9% of an employee’s wages, half of which must be contributed by the employer and half, or 0.45%, contributed by the employee as a payroll deduction. All employers can choose to pay the total amount of the premium on their employees’ behalf. Learn more about the program by exploring the state’s online resources.

  • What to communicate now to your employees: Let employees know the purpose of the FAMLI program is to provide paid family leave benefits. Payroll deductions and employer contributions to fund the program will begin on January 1, 2023, and employees will be able to access benefits starting January 1, 2024. The benefit for employees is partial wage replacement, paid by the State and available when they must be absent due to their own or a family member’s serious health condition, to care for a child, or to address needs around domestic violence and/or sexual assault. Tell employees to expect 0.45% of pay to be deducted from each paycheck beginning with their first one in 2023, unless your organization elects to pay the entire premium. Let them know the FAMLI program is not optional.

If you have questions about either or both programs, please email the Employers Council Member Experience team.