New Programs for Colorado-based Employees

New Programs for Colorado-based Employees | vcfo

Two New Programs for Colorado-based Employees – What Employers Need to Know

Virtually everyone recognizes the win-win of programs that promote employee health and well-being. These programs are appreciated and valued by employees and, in turn, promote higher employee satisfaction and productivity, as well as outcomes such as reduced employee stress and absenteeism. But not every business can find the funds and resources required to implement the full range of employee-focused programs they’d like to offer.

To help employees and employers alike, Colorado is soon launching two new state-run programs, the Paid Family and Medical Leave Insurance (FAMLI) program and the Colorado SecureSavings Program. Here, we break down key aspects of the respective programs and what employers need to know.

Colorado’s Paid Family and Medical Leave Insurance (FAMLI) Program

The aim of Colorado’s Paid Family and Medical Leave Insurance (FAMLI) program is to “ensure all Colorado workers have access to paid leave in order to take care of themselves or their family during life circumstances that pull them away from their jobs.” It is important to note that the program applies to both employers based in Colorado and employers based outside of Colorado who employ Colorado residents. These employers must register with the program via the FAMLI Business Registration Portal by the end of 2022.

While the FAMLI program won’t begin providing benefits to employees until January 1st, 2024, employers must start contributing premiums to the program beginning January 1st, 2023. In preparation, these employers will also need to determine and budget accordingly for the premium amount they will need to pay. Premium amounts are set at .9% of an employee’s wage and cap out at ~$1,440 annually. FAMLI premiums may be fully covered by the employer or split 50/50 (.45% to the employer and .45% allocated to the employee) to comprise the required .9%.

Along with setting up their payroll systems to apply this deduction and reflect it on pay stubs and accounting records, employers must take steps to ensure their employees are aware of and understand the FAMLI program and know what they need to do to participate. The FAMLI employers web page provides detailed information and a FAMLI employer toolkit that “includes several resources to help your employees navigate the upcoming changes that begin in January including the 2023 Required Program Notice, a Paycheck Stuffer, the FAMLI Employee Handbook and more.”

Lastly, private businesses will have the option of using an approved private plan that offers the same or greater benefits and protection as the FAMLI program. However, private businesses are not exempt from paying FAMLI premiums until program administrators have reviewed and approved their comparative private plan.

FAMLI Key Deadlines to Keep in Mind:

  • DEADLINE:  12/31/22
    • Employers to register with the FAMLI Division
    • Determine the premium amount & budget accordingly for 2023
    • Communication strategy to employees
    • Updating payroll systems, employee handbook, and leave programs for 2023
    • Workplace Notice Posting requirement– must post in prominent location in the workplace during Q4
  • BY: 1/1/23
    • FAMLI premiums deducted and submitted to CDLE beginning January 1, 2023

The Colorado SecureSavings Program

The Colorado SecureSavings program was enacted in response to 940,000 workers in Colorado not having access to an employer-sponsored retirement savings plan. That number equates to nearly 40% of the state’s private sector workforce. Upon enrollment into Colorado SecureSavings, employees will be able to contribute to a Roth Individual Retirement Account (IRA) via paycheck deduction and access tools that will help them shape their financial futures.

All Colorado businesses that have been in business for two+ years, have five or more employees, and don’t already offer their employees a retirement savings plan, are required by law to facilitate Colorado SecureSavings. There is no cost for employers to participate. Employers that offer their employees a comparable retirement savings option (e.g., 401K, 403B, etc.) can opt out of the program by completing the exemption certification process that will confirm their eligibility to do so.

According to Prosper Retirement Partners, the full implementation deadline for affected employers who employ 25+ employees is March 15, 2023, and for employers with 5+ employees, that deadline is May 15,2023. https://prosperretirement.com/states/colorado

Affected employers across Colorado will be notified in early 2023 when it’s their time to register. When that time comes, each employer will need its EIN as well as the Colorado SecureSavings access code that will be included in their notification to get started. Once registered, employers will simply upload their employees’ payroll information (including their respective savings contributions levels) and keep employees’ records up to date thereafter.

The Colorado SecureSavings website also offers a comprehensive FAQs resource as well as a Registration Checklist that details all the sign-up steps, timing, and where to go for more information.

Colorado SecureSavings Deadlines to Keep in Mind

  • Deadline 3.15.23
    • Full implementation of Colorado Secure Savings Program for affected employers of 25+ Employees
  • Deadline 5.15.23
    • Full Implementation of Colorado Secure Savings Program for affected employers of 5+ Employees
  • Deadline 12.15.23
    • Compliance deadline meaning fees/penalties could be applied to noncompliant affected employers of 25+ Employees
  • Deadline 02.15.2024
    • Compliance deadline meaning fees/penalties could be applied to noncompliant affected employers of 5+ Employees

Good for Employees. Good for Business.

Employee programs that alleviate anxieties and support individuals’ goals outside of the workplace also translate to a wide range of positive outcomes for the employers that offer them. Colorado’s Paid Family and Medical Leave Insurance (FAMLI) program and Colorado SecureSavings program are two such programs that will enable Colorado workers to temporarily step away from work with less worry when circumstances compel it and to save for their post-work future.

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