Now that leaders of Colorado’s Family and Medical Leave Insurance Program have had more than two-and-a-half years to observe how it works, they are seeking several changes around reporting and record-keeping — many of which are likely to please employers.
FAMLI — which offers up to 12 weeks of partially paid leave annually to all private-sector workers needing to care for themselves or a loved one, welcome a new child or escape domestic violence — has been collecting fees since 2023 and offering benefits since 2024. About 6,000 workers per week request leave — roughly twice the amount that did so in 2024 — and the program paid out about $1.1 billion in benefits last year.
Despite the increased usage of the program — a statistic that program director Tracy Marshall attributed to a variety of factors, including heightened knowledge of the benefits and repeat usage by parents having their second children since its inception — the program is operating at costs slightly below projections. That is why officials have proposed that the fee that is split equally between employers and employees fall slightly next year from 0.88% of a worker’s paycheck to 0.86%.
Marshall said in an interview that if the popularity of the program continues to rise, the fees — which began at 0.9% and fell to 0.88% at the start of this year — likely will stabilize and won’t keep going down. But officials are able this year to continue to take advantage of a large reserve fund they built up in the year that they collected fees before they began offering benefits.
“Those decreases aren’t going to last forever,” Marshall said. “We want to take advantage of them while we can.”
Changing rules around private plans
Tracy Marshall is director of Colorado’s Family and Medical Leave Insurance division.
Other changes should ease some of the reporting burden on companies that offer private family-medical-leave programs, typically through insurance companies, with benefits that meet or exceed what the state program offers. Observers were unsure exactly how popular those would be as compared to the state-run program and how much Colorado would have to regulate them when the program launched, and they added what some employers viewed at the time as extra guardrails — regulations that are now being loosened.
For example, companies offering private plans originally received approval for those plans for a period of eight years, after which they would be required to apply again for certifications. A proposal this year would remove that reapplication requirement and give the plans state approval indefinitely until the plans are terminated.
Another proposed change that will be considered at an Aug. 18 rulemaking hearing would allow companies that have private plans at the time they are acquired by or merge with another company to pass those plans intact to the other firm. Currently, they must dissolve such plans and put the covered individuals and unused fees into the state plan, but the proposal would allow the plan to be passed on like other company assets.
Finally, employers with approved private plans that now need to notify the FAMLI division of the number of workers in their plan annually would only have to pass that figure onto the division when the plan begins, not every year. Evan Grimes, policy unit manager for the FAMLI program, said that officials realized they have a lot of information from all other existing reports currently and didn’t feel they needed to be excessive in their requirements.
“A little bit more employer-friendly”
Stacey Campbell, owner of Campbell Litigation and an employment-law specialist, said that removing each of these burdens regarding private plans is helpful and seems to be a product of state regulators seeing how these private plans have worked. He said the provision allowing transition of the plans as a company changes owners makes particular sense, even if it’s a situation the division may not originally have anticipated.
“If you’ve got a company acquiring another company and both companies have a private plan … it ought to be able to negotiate that over, because the successor is taking on these employees,” Campbell said. “I see it as the division trying to make it a little bit more employer-friendly.”
Stacey Campbell is a shareholder with Campbell Litigation.
Both Campbell and division leaders characterized most of the proposed changes this year as minor, with Grimes saying that now that it’s gotten used to operating the program, the state understands what works and wants to just make tweaks around the edges. Legislators also didn’t make any significant changes to the program this year, unlike in 2025, when they approved a benefit of an extra 12 weeks of partially paid leave for parents whose child may be in the neonatal care unit of a hospital.
Further tweaks to family and medical leave program
Among the other changes proposed to take effect on Jan. 1 are:
- Employers must display a copy of the current FAMLI rules in a breakroom or other public area of their office rather than an outdated copy of the rules.
- Officials are clarifying that when a private-sector contractor does most of its work on a federal enclave — say, janitorial services contracted to military bases — they fall under federal rules that don’t provide family and medical leave benefits for those contracted workers. However, those that spend a significant amount of time as well at non-federal facilities do retain their state-generated benefits.
- Employers under investigation by the FAMLI division shall preserve business records in addition to personnel records relevant to the charge until final disposition of the case.
Officials originally crafted the records-retention rules thinking that most investigations would involve claims of retaliation or interference with the employee’s leave, but proposed changes reflect that investigations may be more of the business nature, Grimes said. An employer may be collecting excessive premiums or may have a private plan that violates state rules, and looking into such claims requires availability of business records, he said.
Campbell acknowledged this could be an administrative burden for employers to keep more records, but he said the key to making this policy change work would be for the FAMLI division to state clearly to employers what records they must keep. He added that he has found the division very responsive to employers who call with questions like that.
Some employers still struggle with program
Approved by voters in 2020 and launched in 2023 to help workers who encounter extreme medical needs to care for themselves or loved ones, the FAMLI program has been administratively tough for some employers. The law allows workers to request the time off immediately, regardless of how long they’ve been with a company and regardless of the size of the company, and it requires employers to offer the exact or a similar position upon the end of leave to any employee who’s worked there at least six months.
That has hit smaller companies the hardest in some cases, as they must choose whether to leave a position open while an employee is taking leave or to invest in another employee, whether a temporary replacement or additional fulltime worker.
One of the biggest implementation issues at this point is that the FAMLI division can launch a complaint investigation that might spur an employer to get an audit and invest serious resources just to find they face minor penalties and fines. The biggest change he’d like to see is not one involving any particular rules but rather increased communication from the division about the scope of investigations and the potential cost to employer, he said.
“I would encourage employers, if you do have a question, to reach out to the division,” emphasized Campbell, chairman of the Colorado Chamber of Commerce Labor & Employment Council.
Chances to weigh in on changes to family and medical leave program
Marshall acknowledged that while the fees charged to employers are going down next year, they still could end up paying a little bit more in FAMLI premiums because worker wages are rising. But she said that increase could be a matter of “pennies.”
“Overall, I think we’re in a really good spot,” she said. “We’re delivering what we said we would deliver.”
Employers can see the full slate of proposed rule changes and sign up to participate in the Aug. 18 rulemaking hearing on the FAMLI website. There also will be an Aug. 19 webinar to discuss the changes. State leaders are expected to adopt the new rules by Sept. 1 so they can be in place by the start of next year.