For Colorado Employers, 2020 Caused Sickening Whiplash

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In a year beset by cataclysmic changes in business and social life, Colorado employers faced more than just ever-changing guidance and advice on how to keep themselves and their employees safe. They also faced the near-herculean task of staying abreast of constantly changing paid sick leave rules. Many experienced truly sickening whiplash in 2020.

HELP rules provide anything but

Starting 2020 with no Colorado or federal requirements to provide paid sick leave to their employees, many Colorado employers first had to grapple with the Colorado Health Emergency Leave with Pay (HELP) rules, which significantly changed the landscape. Becoming effective on March 11, 2020, just as the COVID-19 pandemic was taking hold, the HELP rules issued by the Colorado Department of Labor and Employment (CDLE) first mandated that employers in discrete industries (leisure and hospitality, food services, child care, education, home health care, nursing homes, and community living facilities) provide up to four days of fully paid sick leave for employees who (1) had flu-like symptoms and (2) were being tested for the coronavirus.

Effective March 26, the CDLE then changed the rules, adding a new category of covered industry (retail establishments selling groceries) while also expanding the scope of employees entitled to leave to include those who (1) had flu-like symptoms and (2) were being tested for COVID-19 or were under instructions from a healthcare provider to quarantine or isolate because of a coronavirus risk.

Just as Colorado employers were digesting the new (and amended) rules, the CDLE changed them further:

  • Effective April 3, 2020, the agency added another expansive category of industry covered by the rules: food and beverage manufacturing; and
  • Effective April 27, 2020, the CDLE overhauled the rules yet again, adding numerous additional categories of covered industries (retail establishments, real estate sales and leasing, office and office work, elective health services, and personal care services), which made the rules applicable to huge swaths of Colorado employers.

At the same time, the CDLE changed both the amount of required paid sick leave (up to two weeks) and the rate at which it was paid out (at two-thirds an employee’s regular rate of pay).

Just as Colorado employers’ obligations with respect to paid sick leave seemed to finally be crystalizing by late spring 2020 (albeit in an ever-expanding way), both Congress and the Colorado legislature jumped into the mix, adding additional rules to be interpreted and applied by employers in the state.

FFCRA conflicts with HELP rules

On the federal front, Congress enacted the Families First Coronavirus Response Act (FFCRA), which became effective April 1, 2020, and, among other things, mandated paid sick leave for certain enumerated reasons related to COVID-19. The qualifying reasons overlapped somewhat, but not entirely, with the qualifying reasons provided under the HELP rules. And they required a different amount of sick leave payout than the HELP rules.

Generally, the FFCRA required up to two weeks of paid sick leave at full pay for employees who were unable to work because they were (1) quarantined under a governmental order or on the advice of a healthcare provider, or (2) experiencing COVID-19 symptoms and seeking a medical diagnosis. It required up to two weeks of paid sick leave at two-thirds an employee’s regular rate of pay for those who were unable to work because they needed to care for an individual subject to quarantine or a child whose school or care provider had closed because of the virus.

In determining whether the new federal paid sick leave rules or the Colorado HELP rules (or both) applied to them, Colorado employers at first could rely on provisions in the FFCRA limiting the new federal law’s application to employers with fewer than 500 employees. But then the Colorado legislature stepped in.

FFCRA and HFWA: Am I covered?

During its 2020 legislative session, the Colorado General Assembly passed the Healthy Families and Workplaces Act (HFWA), which created new paid sick leave obligations (one hour of paid sick leave for every 30 hours worked) for most employers in the state beginning in 2021 or 2022 (depending on whether they have 16 or more employees). But the HFWA also incorporated by reference the federal paid sick leave rules under the FFCRA and made them applicable to all Colorado employers, regardless of the number of employees they employed, through the end of 2020 (when FFCRA was set to expire anyway under federal law).

So, Colorado employers that had previously determined they were exempt from the FFCRA’s paid sick leave requirements based on their size now found themselves subject to the federal law’s provisions, albeit by operation of state law.

By early summer 2020, many Colorado employers were awaiting Governor Jared Polis’s signature on the HFWA (which was required before the new law went into effect) and had little idea of how the Act (including its incorporation of the FFCRA’s paid sick leave requirements) would interact with the HELP rules.

Governor Polis signed the HFWA on July 14, 2020, making the new state law effective immediately. The CDLE amended the HELP rules the same day to reflect they had been superseded by the HFWA, but it did so with little fanfare, leaving many Colorado employers uncertain about which rules applied to them until they could consult with counsel.

Proposition 118: Voters have final word

Finally, on November 3, 2020, Colorado voters threw another wrench at employers, approving a sweeping new state-run insurance program providing paid medical and family leave to employees in the state. The new program, passed under a ballot initiative (Proposition 118), will be funded through a new payroll tax split evenly between employers and employees, with the tax initially set at 0.9% of an individual’s wages up to a certain limit. Employers and employees will have to start paying into the new system on January 1, 2023, and benefits will be available beginning January 1, 2024.

The new program will provide most Colorado employees with up to 12 weeks of partial pay for various medical and family-related absences from work, and many of the qualifying reasons for paid leave overlap with the qualifying reasons under the HFWA. It remains to be seen whether—and how—an employer’s obligations under the HFWA may be reconciled with its obligations under the new paid medical and family leave program, but the obligations will largely be cumulative. That’s because the new paid medical and family leave program states employers can’t require employees to exhaust their accrued sick leave before receiving benefits under the program.

Conclusion

Colorado employers are understandably sick of all the new paid leave requirements thrown at them in 2020. And they’re understandably nauseous at the prospect of determining how all the new obligations may overlap and interplay in the years ahead. While anyone may be naïve to be optimistic after a year like the one we all just experienced, at least one thing may be said with certainty about the 2021 and years ahead: at least they won’t be 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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