Proposed Senate Bill 188 Would Create Paid Family Leave System in Colorado

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On March 7, democratic lawmakers introduced Senate Bill 188, which would provide partial wage replacement for Colorado workers by mandating a state family and medical leave benefit. Under the legislation, Coloradans would be able to take up to 12 weeks of paid leave to care for a newborn, a family member with a serious health condition, or who is unable to work due to the individual’s own serious health condition or on account of being the victim of domestic violence or abuse.

Under the new law, each employee and employer in Colorado would pay one-half the cost of a premium based upon a percentage of the employee’s annual wages. The premiums would be deposited into a family and medical leave insurance fund from which leave benefits would be paid. The state would administer the program similar to unemployment insurance. The program would be mandatory for all full- and part-time workers of any size business.

The costs would be split evenly between employers and employees. Workers and their employers would pay up to $160 per year for every $50,000 of annual income. The bill’s proponents state that the paid family leave would be considered a “fee” rather than a “tax”, and therefore the premiums paid into the fund are not considered state revenues for purposes of the taxpayer’s bill of rights (TABOR). Because the premium would not be a “tax”, the bill will not require voter approval.

If the bill passes, employers will want to consider impacts on their paid leave programs.

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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