Employer-Provided Benefits for Delaware and Colorado

As of 2022, around 11 states have joined the employer-provided benefits movement, with Delaware as the most recent state. Colorado adopted employer-provided benefits in 2020 and will begin deducting taxes on January 1, 2023. 

Each state has its own rules and regulations for employees regarding employer-provided benefits. Employees will not be able to take advantage of these benefits for another few years. Still, the funding for these programs will begin as soon as 2023.

Here are a few things employers in Delaware and Colorado need to know to be compliant and prepared to provide their employees with employer-provided benefits and for employees to expect in the following years.

Delaware

Delaware is the 11th state to provide guaranteed paid leave for private-sector employees. Paid leave will include parental, medical, and military leaves. Employees will not be able to participate in these benefits until January 1, 2026, but contributions to the program are expected to begin on January 1, 2025.

The paid leave will be known as the Healthy Delaware Families Act. It will require covered employers to provide eligible employees with up to 12 weeks of paid parental leave and six weeks of paid medical or military leave. For paid medical leave, employees can either use the six weeks to take care of their own serious medical condition or take care of a family member with a severe medical condition. Eligible employees will receive 80 percent of their weekly wages during the paid leave, capped at $900 per week.

Eligible employees

Employees can figure out their eligibility with the following four criteria:

• Work for a covered employer.
• Report primarily to a worksite within Delaware
• Be employed by a covered employer for a minimum of 12 months.
• Work at least 1,250 hours for the employer in the preceding 12 month period

Suppose an employee primarily reports to a worksite employer outside of Delaware. In that case, they are not eligible for the Healthy Delaware Families Act benefits.

How Can Employers Prepare

Employers can take a few different actions to prepare for the upcoming employer-provided benefits. The following actions will ensure compliance with the forthcoming Act:

• Figure out if you are a covered employer
• Determine if current policies will allow your business to opt-out
• Figure out who is a “covered” employee
• Consider budgets and any staffing needs for the future

Colorado 

In 2020, Colorado executed a statewide paid family and medical leave insurance plan called the Paid Family and Medical Leave Insurance (FAMLI) program. It is a state-run program providing Colorado workers paid benefits. The program is not yet live and will not be until January 1, 2024, but employers will be expected to begin the first phase in 2023.

Employers are expected to prepare for the first phase now and anticipate additional guidance from the Colorado Department of Labor and Employment (CDLE) in the future.

Employers who are eligible to be covered by the FAMLI program qualify for paid leave, which can be used to

• Care for their own or family member's serious health condition
• Care for a new child, which includes adopted and fostered children during the first year of birth, adoption, or placement
• Plan a family member's military deployment.
• Take "safe leave" for themselves or a family member.

Employees can take up to 12 weeks of paid leave. Pregnancy-related or childbirth-related leave is allowed an additional four weeks of paid leave, totaling 16 weeks of leave. Benefits while on leave include partial wage replacement depending on that employee's earnings and will be capped at $1,100 per week.

Eligible Employees and Premiums

The FAMLI program will cover nearly all Colorado employers. Employers who have a minimum of one employee in Colorado must provide the FAMLI program to the eligible Colorado employee.

Regulations in regards to premiums have already gone out to employers. Employers are required to begin deducting premiums for all Colorado employees to fund the FAMLI program starting January 1, 2023. 0.9 percent payroll tax will be deducted from all Colorado employees, and the FAMLI program will be funded through a 50/50 split of employer and employee payroll tax deductions. Employers can elect to pay the full amount to offer as a perk to employees. 

How Can Employers Prepare

Employers should begin preparing their business, finances, and employees for the FAMLI program. Employers are expected to start deducting taxes at the beginning of 2023, but other ways are to prepare for the program.

Here are some ways employers can better prepare for the upcoming FAMLI program rollout

• Continue to educate themselves and stay up to date.
• Register with the FAMLI Division open in quarter three of 2022
• Estimate premium budgets 
• Notify human resources and payroll departments
• Notify employees about when payroll deductions begin
• Remind employees when they can expect to partake in the program's benefits.