January 2022

State Updates

 

Colorado updates Paid Sick Leave rules

1/7/21

Author: ADP Admin/Tuesday, January 5, 2021/Categories: Compliance Corner , State Compliance Update, Colorado

The Colorado Department of Labor and Employment (CDLE) has issued final rules addressing the state's new paid sick leave requirements under the Healthy Families and Workplaces Act of 2020 (HFWA).

Background:

Colorado enacted the HFWA (Senate Bill 20-205) in July 2020 to require employers to provide paid sick leave and public health emergency leave to employees. The leave must be paid at least at the same rate the employee normally earns during worked hours.

The HFWA includes three components:

  • Paid sick leave. Effective January 1, 2021, employers with 16 or more employees must provide paid sick leave to their employees. For employers with 15 or fewer employees, the paid sick leave requirement takes effect January 1, 2022. Paid sick leave must accrue at a rate of at least one hour for every 30 hours worked, up to a maximum of 48 hours. Accrual begins when employment starts or the applicable effective date, whichever is later. However, employers have the option of providing all the paid sick leave at the beginning of the year, a practice commonly known a frontloading. Employees are entitled to carry over up to 48 hours of unused paid sick leave to the following year.
  • Public health emergency leave. In addition to the paid sick leave outlined above, employers must provide public health emergency leave (PHEL). Employees who normally work 40 hours or more per week are entitled to at least 80 hours of PHEL. Those who normally work fewer than 40 hours in a week are entitled to at least the greater of either the amount of time the employee is scheduled to work in a 14-day period or the amount of time the employee actually works during an average 14-day period. Employees are only eligible for PHEL once during the entirety of the public health emergency, even if it's amended or extended. Employees may use PHEL until four weeks after the official public health emergency. Employers may count an employee's unused paid sick leave toward the PHEL the law requires.
  • COVID-19 emergency paid sick leave. Through December 31, 2020, all employers must provide each employee with emergency paid sick leave for reasons related to the COVID-19 pandemic in the amounts and for the purposes specified in the emergency paid sick leave provisions of the federal Families First Coronavirus Response Act (FFCRA). Since the FFCRA already covers employers with fewer than 500 employees, the HFWA effectively extends the emergency paid sick leave requirements to larger employers so that all employers in the state must now comply with the FFCRA leave requirements. However, the FFCRA also included an exception under which an employer of a healthcare provider or an emergency responder may elect to exclude the employee from the federal emergency paid sick leave requirement. As a result of the HFWA, these employees are now entitled to emergency paid sick leave in Colorado. Additionally, under the FFCRA, employers with fewer than 50 employees may be eligible to claim an exemption from the FFRCA's requirement to provide paid leave to an employee who is caring for their child due to their school or place of care being closed, or their childcare provider is unavailable, for COVID-19 related reasons if it would jeopardize the viability of the business. Under the HFWA, small employers in Colorado cannot claim that exemption.

Final Rules:

Effective January 1, 2021, the final rules make the following clarifications.

16-Employee Threshold:

To determine whether an employer meets the 16-employee threshold for HFWA coverage in 2021, the rules for how to count employees under the federal Family and Medical Leave Act apply:

  • The employer must employ the requisite number of employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year;
  • Any employee whose name appears on the employer's payroll will be considered employed each working day of the calendar week, and must be counted whether or not the employee received any compensation for the week;
  • Employees on paid or unpaid leave, including sick or medical leave, leaves of absence, and disciplinary suspension, are counted as long as the employer has a reasonable expectation that the employee will later return to active employment; and
  • Employees are counted if they're in any state, the District of Columbia, or any territory of the United States.

Accrual and Carryover:

Paid sick leave begins to accrue at the start of employment or on January 1, 2021, whichever is later.

For the minimum HFWA accrual rate of one hour of leave for every 30 hours worked, accrual is based on all "time worked" with regular and overtime hours counting equally. However, an overtime-exempt employee accrues paid leave based on their normal hours worked up to a maximum of 40 per week.

On the day a public health emergency is declared, employers are required to immediately provide each employee with additional hours of paid leave. Employers must provide employees with a one-time supplemental number of hours which, when added to what the employee has already accrued for the year, will provide them with access to 80 hours of total paid leave. Employees who normally work fewer than 40 hours in a week are entitled to the greater of either the amount of time the employee is scheduled to work in a 14-day period or the amount of time the employee actually works during an average 14-day period.

Employees are entitled to carryover up to 48 hours of accrued, unused leave to the following year, but employers may allow employees to carryover more.

Rate of Pay During Leave:

The final rules clarify that the leave must be paid at least at the same rate the employee normally earns during worked hours and at least the applicable minimum wage.

Increments:

Employers may limit employees to using HFWA leave in hourly increments, but employers may allow smaller increments. If an employer doesn't specify the minimum increment in writing, employees may not use increments smaller than six minutes.

Existing Leave Policies:

HFWA doesn't require additional leave if an employer policy provides fully paid leave for both HFWA and non-HFWA purposes (such as sick time and vacation) and the employer makes clear to employees, in writing and distributed in advance of an actual or anticipated leave request, that:

  • Its leave policy provides at least the amount of time off with pay sufficient to satisfy HFWA and applicable rules (including, if a public health emergency is declared and a supplemental amount of leave is required to satisfy the law);
  • Its leave policy permits employees to take leave for all the same purposes covered by HFWA and applicable rules, not a narrower set of purposes;
  • Its leave policy permits employees to take leave under all the same conditions as under HFWA and applicable rules, not stricter or more onerous conditions (including but not limited to accrual, use, payment, annual carryover of unused accrued leave, notice and documentation requirements, and anti-retaliation and anti-interference rights); and
  • Additional HFWA leave will need not be provided when an employee uses all of their available paid time off for non-HFWA-qualifying reasons (such as vacation), except if a public health emergency is declared after an employee uses some or all available paid time off for the applicable benefit year, the employer must supplement the employee's current total of accrued, unused leave.

Documentation:

For absences of four or more consecutive workdays, employers may require reasonable documentation that the leave is for a covered purpose. The final rules clarify that this is defined as four consecutive days on which the employee would have worked, not four consecutive calendar days. See the text of the rule for details on the types of documentation employers may require.

Note: Employers are prohibited from requiring any documentation for leave related to a public health emergency.

Leave Statements:

The final rules clarify that upon an employee's request, an employer must provide, in writing or electronically, documents sufficient to show, or a dated statement containing, the then-current amount of paid leave the employee has:

  • Available for use (including accrued leave); and
  • Already used during the current benefit year, including information as to any supplemental leave provided and used.

Employees may make such requests no more than once per month, except they may make an additional request when any need for HFWA leave arises. Employers may choose a reasonable system for fulfilling such requests, including but not limited to listing such information on each pay stub, or using an electronic system where employees can access their own information, or providing the necessary information in a letter or electronic communication.

Compliance Recommendations:

Colorado employers should review the final rules in full and ensure compliance by January 1, 2021. Please contact your dedicated service professional with any questions.

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