A New Year Brings New Colorado Employment Laws

By Michelle Ferguson, Attorney, Ireland Stapleton Pryor & Pascoe, PC

The Colorado legislature has enacted various new employment laws requiring action by public employers. These changes to Colorado employment laws carry implications for employers of all sizes and in all sectors. This article briefly summarizes those new requirements.

Famli

The Family and Medical Leave Insurance Program (“FAMLI”) is a stateadministered paid leave insurance fund into which employers and employees will contribute premiums, with some exceptions.

Beginning January 1, 2023, the FAMLI Division of the Colorado Department of Labor & Employment (“CDLE”) began collecting FAMLI premiums. In 2023-2024, the premium is equal to 0.9% of the employee’s average weekly wage. Employers with ten or more employees must contribute at least half the premium, or 0.45%, and they must deduct the other half from employees’ wages. Employers with nine or fewer employees are not required to contribute to the premium, but still must make appropriate deductions from employees’ wages to meet the 0.45% contribution requirement. Employers can choose to pay more than half of the premium, but employees can never be required to remit more than half the premium. Premium payments are also considered “fees” (not taxes).

The FAMLI Division will begin accepting claims or making payments to eligible employees on January 1, 2024. At that time, claims must be submitted by the employee to the State, which will then coordinate the determination and provision of FAMLI benefits. FAMLI leave may be taken for a variety of reasons, including where, because of the birth, adoption or placement through foster care, is caring for a new child during the first year after the birth, adoption or placement of that child; is caring for a family member with a serious health condition; has a serious health condition; because of any qualifying exigency leave (i.e., leave related to military service); has a need for safe leave (i.e., leave related to domestic violence response and shelter).

Under FAMLI, eligible employees receive wage replacement at less than 100% their average weekly pay, up to a maximum wage replacement of $1,100 per week through January 1, 2025. FAMLI leave is available for a maximum of 12 weeks or, for those using FAMLI due to childbirth or pregnancy complications, 16 weeks. Eligible employees are those who have earned at least $2,500 in wages over the first four of the last five completed calendar quarters immediately preceding the first day of the individual’s benefit year, or the last four completed calendar quarters immediately preceding the benefit year.

Special districts and local government employers may opt out of FAMLI altogether, in which case they are not required to contribute to FAMLI premiums or make deductions from employees’ paychecks towards the premium. However, employees of local governments that choose to opt out can voluntarily choose to participate in FAMLI and pay their share of the necessary premiums to the CDLE. For more information, please log onto https:// famli.colorado.gov/

Restrictive Covenants

Non-compete and non-solicitation agreements may now be utilized under fewer circumstances in Colorado. Specifically, employers may enforce a non-compete, nonsolicit, or confidentiality agreement only if narrowly tailored to protect the employer’s legitimate interest in protecting their trade secrets, in addition to very few other, limited circumstances. Additionally, non-compete and nonsolicit agreements may only be enforced against those employees who earn a certain minimum salary, defined as the Highly Compensated Employee (“HCE”) threshold established by the Colorado Department of Labor & Employment each year. Employers also must provide notice in a separate document to employees which points them to the specific provisions of an employment agreement containing a non-compete or non-solicit obligation. A detailed analysis of these changes is outlined here https://irelandstapleton. com/insights/insights-into-coloradosexpanded-laws-on-restrictive-covenants/

Colorado Secure Savings Program

In addition to FAMLI, the State has taken on administration of retirement benefits for Colorado employees. The Colorado Secure Savings Program (“CSSP”) requires employers to offer a retirement savings plan or enroll their eligible workers in a state-sponsored Roth IRA plan. Those employers who already offer 401(k) plans or other qualified savings plans are not required to use the CSSP state plan. To be clear, employers are only required to offer a plan to their employees, but are not required to contribute to such plan.

Registration opens “in early 2023” according to CSSP’s website, https:// coloradosecuresavings.com/.

Employers who use the State plan will be required to offer auto-enrollment and facilitate employee payroll deductions into the program. The default savings rate is 5% of the employee’s gross pay, but employees may change the contribution rate and/or opt-out entirely.

Rules are still being developed by the CSSP Board, including default contribution amounts, the process for enforcement, and required disclosures to employees. The fines for non-compliance are $100 per employee, per year and can ratchet up to $5,000 annually.

Separation Notices

Amendments clarify that employers must provide all of the following information to employees who are separating employment for any reason:

• Employer’s name and address;

• Employee’s name and address;

• Employee’s identification number or last four of employee’s SSN;