Mandatory Family and Medical Leave Insurance Bill Moving through Senate
Last Thursday, legislation authorizing the long-awaited Family Medical Leave Insurance Program (FAMLI) was introduced and was quickly heard in and passed out of the Senate Business, Labor and Technology Committee on Wednesday. The business community has been aware of this legislation and has participated in stakeholder meetings over the past several months, trying to temper the negative effects of this bill with little success. Senate Bill 188 will create a state-run insurance program funded through an assessment on employers and employees that will provide partial wage replacement to eligible individuals who take leave from work to care for a new child or a family member with a serious medical condition, because of a serious medical condition of their own or due to certain needs arising from a family member’s active duty service. However, participation is mandatory, and no employers will be exempt, regardless of their size or if they already offer a leave program to their employees. Employee payroll will be taxed at .64 percent to pay for the program, with a 50-50 split between employees and employers to fund it.
The business community has a long list of concerns, including:
- the scope of the program, which is far greater in benefits than any state-run family leave program in the country;
- the potential loss of richer benefits when companies are forced to forgo their programs due to the mandatory nature of this bill;
- and the fact that it does not conform with the federal FMLA program.
However, one of the most alarming issues is the sheer cost of this program. An amendment was introduced to lower the local government employer contribution, including those of local government entities, school districts and the State of Colorado. These deep discounts for governmental entities narrow the assessment base to the private and nonprofit sectors and force employees and employers in those sectors to pick up the tab for government. While we are grateful that the impact on the smallest of businesses was considered in this amendment as well, we remain deeply concerned by the cost implications for many of our member companies. As it stands today, businesses with four or fewer employees will only have to pay one-eighth of the premium and those with five to 10 employees will pay one-fourth, while any companies larger than 10 will pay the full assessment. While the director of the Division of Family and Medical Leave Insurance can raise the assessment should the fund need more money to be solvent, another amendment was accepted to cap the premiums at a maximum of .99 percent of wages per employee.
Mizraim Cordero, vice president of government affairs at the Chamber, was set to testify on the bill at Wednesday’s hearing; however, he, like so many other stakeholders who wanted to share their voice in this process, was unable to attend due to the blizzard. We were disappointed that the Senate went forward with the hearing, forcing many in the business community to have to choose between their safety and having their voices heard. We instead submitted our written testimony for the committee to consider.
We will continue to work with bill sponsors to express our concerns and share ideas for amendments.
As always, Chamber staff will continue working on your behalf, analyzing and weighing in on legislation that can impact your business. We list all our bill positions online. Stay in touch with us by checking our website and sharing with us your concerns as the session progresses.
