Colorado’s paid leave program has set an impressive precedent for other states. Not only does the Centennial State have one of the most inclusive and comprehensive paid leave programs, but it’s also the first state to offer paid neonatal care leave for parents with babies in the NICU, a policy that’s nothing short of life-changing for the people it supports.
If you employ people in Colorado—or plan to hire there—take some time to learn how the state program functions, which protections employees are entitled to, and what your costs and obligations are as an employer.
Our Gusto guide has everything you need to know.
What is Colorado’s paid family leave program?
The Family and Medical Leave Insurance Program (FAMLI) is Colorado’s all-inclusive answer to leave, including family-related leaves and disability leaves.
FAMLI, which went into effect in 2024, gives eligible Colorado workers up to 12 weeks of paid, job-protected leave each year for a handful of reasons, including:
Bonding with a new child, including adopted and fostered children
Recovering from a serious health condition
Caring for a family member or loved one with a serious health condition
Seeking safety from domestic violence or assault
Preparing for a family member's military deployment
Colorado parents whose babies have to spend time in the NICU can qualify for an additional 12 weeks of paid leave, on top of the time they already receive for bonding. Birthing parents with pregnancy complications are also eligible for an extra four weeks of medical leave to stack onto their bonding time.
How is FAMLI funded?
FAMLI is funded by both Colorado employees and employers; you split the cost of the premium. In 2026, the rate is based off of 0.88% of employee wages, up to the Federal Social Security Wage Cap, which is set at $184,500 in 2026.
However, you don’t necessarily have to pay the employer premium—it depends on the size of your workforce. If you have:
1-9 employees → You’re responsible for sending 0.44% of all employee wages to the state, which you can deduct from your employees’ paychecks, meaning you won’t pay anything out of your company’s pocket.
10 or more employees → You’re responsible for sending 0.88% of all employee wages to the state, which means you’ll deduct 0.44% from your employees’ paychecks and contribute 0.44% yourself.
Keep in mind that your employee headcount is based on the number of people employed during 20 or more calendar workweeks in the previous calendar year, regardless of how many days or hours they worked during each week.
How much do employees receive with FAMLI benefits?
During leave, Coloradans receive weekly benefits that range from 46% to 90% of their usual pay, up to a maximum. The state calculates benefits on a sliding scale using two numbers: 1) an employee’s average weekly wage from the previous five calendar quarters and 2) the state’s average weekly wage.
As an example, if an employee’s average weekly wage is between $1,000 and $1,500, they’ll receive $807 in weekly benefits, up to a maximum annual benefit of $9,684. See the full sliding scale here.
Who’s eligible for FAMLI?
The great news about Colorado’s leave program is that it’s inclusive by design. Almost all Coloradan workers qualify, as long as they’ve earned $2,500 in total wages within the state during the last five calendar quarters.
There are just a few exceptions:
Employees of local governments that chose not to participate in FAMLI (though they can opt in themselves)
Federal employees
Employees covered by the federal Railroad Unemployment Insurance Act
Employees of a Tribal Nation working on tribal land
Can sole proprietors qualify for FAMLI?
Independent contractors, self-employed people, S-corporation owners, and employees of local governments that opted out of FAMLI all have the option to participate in FAMLI on their own. They just have to create an account and start paying into the program.
If you’re a business owner and only pay yourself (no employees), then you’re considered self-employed under FAMLI, which means you have to voluntarily opt in if you want to receive leave benefits.
How does FAMLI work with FMLA?
Colorado’s FAMLI leave is separate from the Family and Medical Leave Act (FMLA), a federal law that requires employers with at least 50 employees to offer 12 weeks of unpaid, job-protected leave for bonding, caregiving, medical recovery, and military exigency.
FMLA is much harder to qualify for than FAMLI, but some of your employees might be eligible for both types of leave. In that case, the leaves run concurrently with one another, and your employees are entitled to whichever protections are strongest (in this case, that’s FAMLI).
Let’s compare the differences.
FAMLI vs FMLA
FAMLI | FMLA leave | |
Reasons for leave | Bonding with a new child; recovering from a serious health condition; caring for a family member or loved one; seeking safety from domestic violence or assault; preparing for a family member's military deployment | Bonding with a new child; personal health conditions; caring for a family member who has a serious health condition; military exigency leave |
Eligibility requirements | Have earned $2,500 in total wages within Colorado in the last five calendar quarters | Have worked for the employer for at least one year; have over 1,250 hours of service in the past year; the employer has at least 50 employees who work within a 75-mile radius |
Job protection | Yes, as long as employees are employed for 180 days before the start of leave | Yes |
Length of leave | Up to 12 weeks within a year (people with pregnancy complications can qualify for up to four additional weeks; people with babies in the NICU can qualify for up to 12 extra weeks) | Up to 12 weeks within a year |
Payment | Weekly benefit payments are dependent on wages (up to 90% of usual pay) | Unpaid |
Health benefits | Yes, employers are required to continue providing health benefits to employees receiving FAMLI benefits | Yes, employers are required to continue providing health benefits to employees on FMLA leave |
PTO usage during leave | Employers can’t require employees to use accrued vacation, sick leave, or other PTO before or while receiving FAMLI | Employers can require their employees to use PTO and sick leave during FMLA leave |
What are my FAMLI responsibilities as an employer?
If you employ at least one person in Colorado, you’re required to participate in FAMLI. Here’s what you need to do:
1. Register with the FAMLI Division and send FAMLI premiums
If you haven’t already, you need to register with the FAMLI Division and send premiums to the Colorado Department of Labor and Employment.
If you have nine employees or fewer, you’re in charge of sending in 0.44% (half of the 2026 rate) of your employees’ wages; you can either deduct it from your employees’ paychecks or cover the portion yourself.
If you have 10 or more employees, you have to send in 0.88% (the full 2026 rate) of your employees’ wages, which means you’ll pay 0.44% yourself and deduct the other 0.44% from your employees’ paychecks.
You need to submit your payments on a quarterly basis. There are a few different online payment options, but the easiest is through the My FAMLI+ Employer portal. The due dates are April 30, July 31, October 31, and January 31. And don’t forget to report FAMLI deductions on IRS Form W-2 in Box 14, using FAMLI as the label.
2. Share the official FAMLI program notice
Just like with other labor law posters, you need to post the official FAMLI Required Program Notice in a visible area in your workplace. The notice describes what FAMLI covers, who’s eligible, and how individuals can file complaints.
You’re legally required to post the notice in English, Spanish, and any other languages spoken by at least 5% of your workforce.
You also have to give all your employees a copy of the official program notice when they’re hired. A summary of the program in your employee handbook doesn’t cut it; you have to provide the form separately.
Finally, you have to share the official notice with individual employees who request a leave or notify you about a qualifying life event—within five days of them doing so.
If you don’t follow the state’s notice requirements, you could receive a $500 penalty for each separate violation.
3. Review the notice of claim submission
When your employees file claims to receive FAMLI benefits, the state will send you a Notice of Claim Submission. You should review the notice to verify that the information your employee provided (like their work schedule and leave dates) is correct.
If the information is correct, you don’t have to take any action. If the information isn’t right, however, you need to contact the FAMLI Division to let them know.
4. Maintain your employee’s health insurance and protect their job
You need to continue paying your employees’ health insurance premiums while they’re on FAMLI leave, and maintain their positions while they’re gone. They’re entitled to job protection, which means they’re guaranteed to be restored to their same role or an equivalent one when they return from leave.
5. Keep all your paperwork
Make sure you keep all your payroll and personnel records for at least three years. That includes payroll records, paystubs, official employee requests for leave, and documentation of leave start and end dates.
If you need more information or resources, check out Colorado’s comprehensive Small Business Guide to FAMLI.
What happens if I don’t comply with FAMLI?
You’re not allowed to stop or discourage your employees from taking leave under FAMLI, nor can you threaten or discriminate against them for requesting or taking a leave of absence of any kind.
If you don’t grant your employees the FAMLI or FMLA leave they’re entitled to, or if you don’t collect premiums, post notices, or reinstate employees to their jobs, you could face serious fines and interest fees from the state—not to mention potential lawsuits from wronged employees.
What will paid leave cost me?
The amount of money you’ll spend on paid leave each year depends on the size of your workforce, your employees’ earnings, and how many leave cases you see each year.
Remember: if you have fewer than 10 employees, you don’t have to pay anything for leave. But if you have 10 or more employees, you’ll pay 0.44% (in 2026) of your employees’ wages.
Depending on how much your employees make and how many people take leave at the same time, your costs for paid leave could be anywhere from a few hundred dollars a year to several thousand.
Let’s say, for example, that you have 12 employees, each of whom makes exactly $60,000. According to Colorado’s FAMLI Premiums and Benefits Calculator, your total annual employer contribution per employee would be $264. That means that even if all 12 employees take leave in the same calendar year, which is super unlikely, your total leave premium cost would be $3,168.
It’s also worth noting that you’re not limited by FAMLI’s leave requirements. If you want to give your employees even more paid leave time, like 20 weeks instead of 12, you can. You just have to cover the extra cost yourself.
What information should my employee leave policy include?
The best company leave policies are clear, detailed, and inclusive. Make sure you include the following information in yours:
A complete description of FAMLI, including who’s eligible, what types of leave are allowed, and how much time employees can take
A complete description of FMLA leave, including who’s eligible and what types of leave are allowed
Instructions on how and when to request a leave
Explanation on whether or not employees need to provide certification for their leave
Explanation of how leave review and approval work
What protections employees will be afforded during leave (like job protection and continued health insurance, both afforded through FAMLI and FMLA)
How much employees will be paid during leave, and when they’ll receive payments
Confidentiality during leave, especially with regard to employee medical information
Expectations and reasonable accommodations upon returning from leave
More Colorado-specific business resources
Want to brush up on Colorado hiring laws and business taxes? Save our guides on hiring, starting a new business, and state tax incentives.
