As another year begins, so do some new state laws. And 2023 has a major one that will hit many workers’ paychecks almost immediately.
Paid family leave, which Colorado voters approved in 2020, will cost roughly $4.33 per week for a worker who makes $50,000 a year. In return, that worker will be eligible for up to 12 weeks (or 16 weeks for complicated births) starting in 2024. This isn’t a vacation fund, but kind of an emergency fund that will provide workers paid time off to have a baby or take care of sick loved ones or themselves.
“Starting in 2024, this is going to cover pretty much all employers in Colorado with a very small number of carve outs that were in the statute. All employees would be eligible for up to 12 weeks per year,” said Tracy Marshall, division director of the Family and Medical Leave Insurance Program, or FAMLI. “This is an annual benefit. It’s not a once-in-a lifetime benefit.”
Keep in mind, companies and workers are paying into the program this year so that there will be money to support family or medical leave next year. The expectation? The FAMLI fund will have $1.3 billion in contributions by the end of 2023.
What’s Working covered the details of the how the law will impact companies in an earlier column, but here’s a quick recap:
For employees: For a worker who earns $50,000 a year, here’s what the contribution is, according to the state Department of Labor and Employment:
● $4.33 — Employee’s weekly payroll deduction, or $225.16 a year. Calculate your own payment in the FAMLI estimator HERE
● $4.33/$225.16 — Employer’s payment for the employee, though companies can be generous and cover the employee’s portion, too.
For companies: For a company with 10 employees (smaller companies aren’t required to participate) who all earn $50,000 a year, that comes out to:
● $4,503.20 — This is the employer’s annual contribution. Half of this can be deducted from workers’ paychecks.
● Companies with existing plans can opt out but their paid-leave plans must be approved. Employers can submit their plan HERE.
The benefits: Starting in 2024, here’s what that same $50,000-wage worker will get paid if they take leave:
● $750.88 — Weekly benefit for the worker. That’s about 80% of the worker’s regular pay. Benefits are based on wages. The maximum is $1,100 a week. The benefit is paid by the state, not through the employer, so workers must apply through the state portal.
It’s also not just for new parents. Paid leave will provide a temporary benefit for Coloradans who need to take care of their sick loved ones or even themselves. It’s a benefit that an estimated 2.7 million workers could be eligible for. Roughly 216,000 employers need to register with the state’s program and the first payments are due April 30.
➔ FAMLI: The state’s portal for the Family and Medical Leave Insurance program >> View
➔ Post this: Here’s the notice employers must share with employees or post at the place of business >> SEE
➔ ICYMI: Read the story >> Behind the new fee many Colorado workers and employers will see in 2023
The other new labor laws, fees
Good news, bad news, Colorado. It’s going to cost more to work in 2023. But, for the most part, wages are rising. Here’s what else is changing:
➔ Minimum wage
On average, wages in Colorado have increased 8.5% in one year. But that’s the average hourly wage. For minimum wage earners, that’s going up too — by 9%, or the rate of inflation for the first half of the year, which is what the state uses to calculate the annual cost of living change.
In Colorado, minimum wage is moving to $13.65 an hour on Jan. 1 from $12.56. In Denver, it jumps to $17.29 an hour from $15.87. A visual:
For comparison, here is how Colorado’s average hourly earnings have grown by month, according to data from the state Department of Labor:
Tipped workers are getting an 11% increase to $14.27 an hour in Denver. I wrote about the debate in an earlier column here. To read more about the rising minimum wages, check out this story from August: What’s behind next year’s 9% minimum wage increase in Denver and Colorado
Take this week’s poll:
➔ Unemployment insurance
Similar to paid family leave, when one loses a job and qualifies for unemployment benefits, those, too, are paid out of past employer and employee contributions. As some may recall, Colorado’s unemployment trust fund was depleted in the pandemic as hundreds of thousands of Coloradans lost their jobs.
The state borrowed more than $1 billion from the federal government to keep unemployment benefits flowing.
That debt has been paid off. But because the trust fund was depleted, a mechanism kicked in to refill it faster. In other words, employers must contribute more than before.
But that’s not going up. That solvency surcharge was suspended by the state legislature for 2023 via Senate Bill 234. Higher rates could start in future years if the trust fund isn’t at an appropriate level.
And because Colorado paid off the federal loan by Nov. 10, there’s no Federal Unemployment Tax Act payment increase, which could have amounted to $63 per employee instead of $42 a year.
However, unemployment insurance payments are going up on Jan. 1. That’s because a law passed in 2020 raises the base wage used to calculate insurance payments. Last year, employers had to pay insurance on a worker’s first $17,000 of pay. This year, the minimum jumps to $20,400.
To get into the nitty-gritty of how much more per year an employer will pay, Colorado Department of Labor and Employment economist Ryan Gedney shared an estimate: Employers will pay about 10% more for unemployment premiums in 2023 than this year.
There are ifs and buts and other caveats with this figure because every employer is different. But generally, the estimate is based on an employer with 10 employees who made at least $20,400 in 2022 and 2023. The employer is medium-rated, which translates into a insurance premium rate of 1.5%.
In that scenario, the employer will pay $3,060 in 2023, up 20% from $2,550 in 2022. But it’s possible that if the employer’s rate went down, they could pay less. If the employer’s rate improved and their insurance rate dropped to 1.18%, they’d end up paying 6% less, or $2,407.
However, most Colorado employers won’t see higher insurance rates — just a larger amount than before.
Added Gedney, “approximately 36% of experience-rated employers will see no change in their UI premium rate compared to 2022, while an additional 51% will see their rate decline.”
And about 13% will see their rate increase in 2023 compared with 2022.
Want to know more? Read the Colorado Unemployment Insurance Trust Fund Status Report, from Aug. 31. >> READ
➔ Deductions from final paycheck? Employers must notify workers. There’s a new notice required by Senate Bill 22-161 that employers must notify former workers if any sort of deduction is going to come out of the worker’s final paycheck. If employers skip that, they could face penalties and fines by the state labor department. Prior wage-theft rules went into effect in August, but this required notification starts Jan. 1. >> Read the fact sheet
Other working bits
➔ Quitting down, multiple jobs up — Once the leader of quitting, Coloradans aren’t quitting as much anymore. The rate of quitting has moderated elsewhere in the Rocky Mountain region and that “could simply be a return to normalcy,” according to an analysis by the Kansas City Federal Reserve. Also of note: More workers in the region are adding second part-time job, which could indicate “the impacts of inflation — households may be seeking out additional work at a higher rate to supplement their income in the face of higher expenses.” >> Read
➔ Worker deaths are up in Colorado — Colorado had 96 work-related fatalities in 2021, which is 23% higher than in 2020, according to the latest Bureau of Labor Statistics data. Transportation-related deaths were still the most common factor, but for the first time since 2016, “violence and other injuries by person or animals” came in as the second biggest cause of death. Nationwide, worker deaths increased 8.9% in the same year to 5,190 workers. >> Report
➔ Where to find jobs? Economic development. In 2022, 28 companies were awarded incentives to move or expand to Colorado. But the only way they can get the tax credit is by hiring more people. Read my update on the state’s business incentives and where the jobs are. >> Read
➔ Job opening: We’re hiring! The Colorado Sun needs an operations manager on the business side so we journalists can focus on reporting. If you’re good at juggling multiple tasks, getting them checked off your list and are comfortable using technology, please check out our job opening at coloradosun.com/jobs. >> JOBS
Thanks for sticking with me for this week’s short report. And I’m grateful for readers who keep checking out What’s Working each Saturday. Have a happy new year and I look forward to reporting on what’s happening with Colorado’s economy in 2023.
This story was corrected on January 3, 2023 to update Colorado’s minimum wage to $13.65 an hour for the new year.
Miss a column? Catch up:
- What’s Working: Colorado sees decline in labor force but job numbers are still better than U.S.
- What’s Working: Waiting for unemployment benefits in Colorado? It may now take up to 16 weeks
- What’s Working: Behind the new fee many Colorado workers and employers will see in 2023
- What’s Working: Thanksgiving meal inflation is higher in Colorado than U.S.
- What’s Working: People with a felony record are getting more opportunities from Colorado employers
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