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Colorado Family and Medical Leave Insurance Program: What small businesses need to know

Colorado’s Family and Medical Leave Insurance (FAMLI) program gives most workers in the state paid, job-protected time off for major life events. Voters approved it in 2020 through Proposition 118. Premiums began in 2023 and benefits began in 2024. According to a Small Business Majority survey, a majority of small business owners (64%) supported establishing a publicly-administered family and medical leave insurance program in the state. 

Who is covered?

  • ​​​​Most private-sector workers in Colorado.
  • Self-employed people and independent contractors who live and work in Colorado can opt in (see below).
  • Employers can apply to use a private plan instead of the state plan if it offers equal or better benefits.

What does it cost?

Employers and employees share the premium. It applies to wages up to the Social Security wage cap, which is $184,500 in 2026.

  • 2026: 0.88% of wages, split evenly. Employers pay 0.44% and employees pay 0.44%.
  • Starting January 1, 2027: 0.86% of wages.
  • Businesses with fewer than 10 employees don’t pay the employer share. They must still withhold the employee share and send it to the state.

What about self-employed workers?

  • You can opt in at any time, but you must agree to participate for at least three years.
  • You pay 0.44% of your gross self-employment income. Your benefits are also based on gross income.
  • You must file a wage report every quarter, even if your income is zero.
  • You can get benefits after you’ve paid premiums for at least one quarter.

Who is eligible for benefits?

Workers generally qualify once they’ve earned at least $2,500 in Colorado wages over the past year. Self-employed workers qualify once they’ve opted in and met the requirements above.

What can FAMLI be used for?

  • Managing your own serious health condition
  • Caring for a family member with a serious health condition
  • Bonding with a new child (birth, adoption or foster placement)
  • Making arrangements for a family member’s military deployment
  • Addressing safety needs related to domestic violence or sexual assault

How much leave and pay do workers get?

  • Up to 12 weeks a year, plus 4 more weeks for pregnancy or childbirth complications.
  • Neonatal care leave (new in 2026): parents of a baby in a neonatal intensive care unit (NICU) can take up to 12 more weeks.
  • Up to 90% of wages, on a sliding scale. The current maximum is $1,448.02 a week.
  • Job protection: workers who have been with their employer at least 180 days get their job back when they return.

2026 tax update

FAMLI’s federal tax treatment isn’t changing for 2026:

  • Employers have no new withholding, reporting or FICA requirements, and the same applies to third-party administrators (TPAs) and their clients.
  • Employees can still choose to have federal income tax withheld from their benefits.
  • FAMLI will keep sending Form 1099-G directly to employees.

Where can I find more information about FAMLI?

Visit famli.colorado.gov or use the Premium and Benefits Calculator.