Colorado’s paid family leave law, the Family and Medical Leave Insurance program (FAMLI), was passed by ballot initiative in November 2020. A small business, Chronos Builders, challenged the law. The claim was that FAMLI violated the state’s Taxpayer's Bill of Rights (TABOR) law by creating an unconstitutional tax on employers. TABOR prohibits additional surcharges above a flat tax. The lawsuit was dismissed by the trial court. Due to the short time for when the deduction was set to begin in 2023, the Colorado Supreme Court took the case without an appeal first.
On June 21, 2022, the state Supreme Court struck down the challenge to the law. It explained that the additional amounts charged to employers and employees to fund the program are not a tax on income but instead are fees to create a fund for employees who receive paid sick leave when they are not well enough to go to work.
What this means for employers is that Colorado will join 11 other states in offering paid family leave, and employers in Colorado should assume that this law will go forward, beginning in 2023. Employers Council is dedicating time and attention to this program to help members understand the law and know what they must do to follow it. Members may want to use our checklist to see how prepared they are for this new law. If you have any questions, please email the Member Experience team.
#Leaves
#Leaves-Mandated#Colorado