7 CCR 1107-1 – Regulations Concerning Premiums and Individuals Electing Coverage

DEPARTMENT OF LABOR AND EMPLOYMENT REGULATIONS CONCERNING PAID FAMILY MEDICAL LEAVE PROGRAM 7 CCR 1107-1 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________

1.1 Authority

This regulation is adopted pursuant to the authority in section C.R.S. 8-13.3-501 and is intended to be consistent with the requirements of the State Administrative Procedures Act, C.R.S. 24-4-101 et seq. (the APA), and the Paid Family and Medical Leave Insurance Act, C.R.S. 8-13.3-501 through 524 (the Act).

1.2 Scope and Purpose

A. This regulation implements the procedural and substantive provisions for the Family and Medical Leave Insurance program pursuant to C.R.S. 8-13.3-507, concerning the establishment, collection, and administration of premium collections.

B. This regulation does not apply to any other premiums, fees, taxes, or collections outlined in unemployment insurance, worker compensation, private temporary disability insurance or private family leave insurance programs or other programs not administered by the Division.

1.3 Applicability

The provision of this Section will apply to employers as defined in C.R.S. 8-13.3-503(8) who are operating within the State of Colorado, no matter what State, county, or territory the employer is physically located in or claims as a base of operations, unless otherwise specified by exemptions in C.R.S. 8.13.3-503(8) or federal law.

The provisions of this Section will be applicable to self-employed persons who elect coverage under C.R.S. 8-13.3-514 and employees of any local government who elect coverage under C.R.S. 8-13.3-514. If any part of these rules is held invalid, the remainder shall remain valid, and if any part is held not wholly invalid, but in need of narrowing, it will be retained in narrowed form.

1.4 Definitions

Calendar Quarter has the same definition as C.R.S. 8-70-103(6). Division has the same definition as C.R.S. 8-13.3-503(5). Employee has the same definition as C.R.S. 8-13.3-503(7). Employee share is defined as 50 percent of the premium required for an employee by section C.R.S. 8- 13.3-507(3).

Employer has the same definition as C.R.S. 8-13.3-503(8). Employer share is defined as 50 percent of the premium required for an employee by section C.R.S. 8- 13.3-507(3).

FAMLI is defined as the Paid Family and Medical Leave Insurance Act, C.R.S. 8-13.3-501 through 524 (the Act).

Net earnings from self-employment has the same meaning as in the Internal Revenue Code at 26 U.S.C. § 1402(a), in effect for the taxable year, and the implementing regulations at 26 CFR 1.1402(a). Gross income has the same meaning as defined at 26 CFR § 1.61-1 through 1.61-14. Individual electing coverage means an individual who elects FAMLI coverage pursuant to C.R.S. 8-13.3- 514.

My FAMLI+ Employer means the online portal through which employers and individuals will interact with the FAMLI Division. Activities completed through this portal include, but are not limited to, electing coverage, declining coverage, reporting wages, and remitting premiums pursuant to the FAMLI Act and its implementing regulations.

Premium is defined as the money payments required pursuant to C.R.S. 8-13.3-507 to finance the payment of family and medical leave insurance benefits and administer the family and medical leave insurance program.

Self-Employed Person or self-employed individual, as used in the FAMLI Act and its implementing regulations includes individuals who meet the FAMLI Act’s two-prong exception to the definition of employee at C.R.S. 8-13.3-503(7).

Wages as used in the FAMLI Act and its implementing regulations has the same meaning as C.R.S. 8-70- 141 and its implementing regulations at 7 CCR 1101-2, and excludes remuneration described by C.R.S. 8-70-142.

1.5 Assessing and Collecting Premiums

1.5.1 Election, Withdrawal, and Cancellation of Coverage for Individuals Electing Coverage A. Individuals electing coverage may elect coverage under C.R.S. 8-13.3-514 for an initial period of coverage of three years.

1. Notice of election of coverage must be submitted to the Division via My FAMLI+ Employer.
2. Elective coverage becomes effective on the date of filing the notice.
3. A period of coverage is defined as:
1. (a) The three years following the first day of elective coverage or any gap in coverage; and (b) Each subsequent year.
4. Any individual electing coverage may file a notice of withdrawal within thirty calendar days after the end of each period of coverage. The notice of withdrawal must include an effective date of the withdrawal, which must be no sooner than thirty days after the filing of the notice of withdrawal.
5. A notice of withdrawal from coverage must be submitted to the Division online or in another format approved by the Division.
6. Upon termination of coverage, due and unpaid premiums must be paid, as well as any interest, fines, or penalties assessed.

1.5.2 Determining Wages Earned for Self-Employed Persons Regarding Premium Assessment A. An individual electing coverage must submit earnings reports and remit premium payments no later than the last day of the month immediately following the end of the calendar quarter for which the premiums have accrued.

B. Pursuant to C.R.S. 8-13.3-507(4)(a), an individual electing coverage is required to submit only 50 percent of the premium required for an employee by section C.R.S. 8-13.3-507(3) on that individual’s income.

C. Upon electing coverage, self-employed individuals shall choose between reporting gross income or net earnings from self-employment, for purposes of calculating premiums and benefits.

D. A self-employed individual may elect to change their premium and benefit calculation basis between gross and net one time within a coverage period.

E. The Division may require copies of tax returns, bank records, self-attestations, or any other documents deemed necessary by the Division to verify or determine the income of an individual electing coverage.

1.5.3 Premiums Remitted by an Employer

A. Premiums must be paid not less than quarterly in the form and manner determined by the Division. Quarterly payments must include all premiums with respect to wages paid during the calendar quarter.

1. Due Date of Premiums. Premiums must be paid no later than the last day of the month immediately following the end of the calendar quarter for which the premiums have accrued.
1. (a) Payment will be considered timely if postmarked or received electronically on or before the due date. If the due date of premiums falls on a Saturday, Sunday, or legal holiday, payment will be considered timely if postmarked or received in person or electronically on the next business day that is not a Saturday, Sunday, or legal holiday.
2. (b) Quarterly payment will not be required when the total amount of any premiums due, including any penalties and interest accrued for an untimely or incorrect report, is less than five dollars.
2. Erroneous Rate Notice. If, as a result of an incorrect notification or computation by the Division of premiums due, an employer is required to make an additional payment of premiums, such additional payment will not accrue interest until thirty days after notification by the Division that such additional payments are due.
3. First payment of a new employer, unless stated otherwise by exemption.
1. (a) The first premium payment of any employing unit that becomes an employer subject to C.R.S. 8.13.3-501 et seq., at any time during a calendar year must be paid on or before the last day of the month immediately following the calendar quarter in which such an employing unit becomes an employer.
2. (b) Said payment must include the FAMLI premiums with respect to wages paid for employment occurring on and from the first day of the calendar year through all payroll periods that end within the calendar quarter in which the employing unit becomes an employer.

B. Employers ability to deduct premiums from employees

1. An employer required to remit premiums pursuant to C.R.S. 8-13.3-507 may not deduct more than the maximum allowable employee share of the premium from wages paid for a pay period.
1. (a) If an employer fails to deduct the maximum allowable employee share of the premium from wages paid for a pay period, the employer is considered to have elected to pay that portion of the employee share under C.R.S. 8-13.3-507, and the employer cannot deduct this amount from a future paycheck of the employee for a different pay period.
2. (b) Notwithstanding Rule 1.5.3.B.1(a) above, where there is a lack of sufficient employee wages to cover the employee share of premiums for a pay period, the employer may deduct the uncollected portion of the employee share from one or more paychecks for future pay periods.
3. (c) In the payment of any premiums, a fractional part of a cent will be disregarded unless it amounts to one-half cent or more, in which case it will be increased to one cent.
2. Employers not required to pay the Employer share of the FAMLI premium due to employer size of business pursuant to C.R.S. 8-13.3-507(5) must remit the employees’ share of the premium in the manner outlined by the Division. Such employers may deduct up to 50 percent of the premium required for an employee by C.R.S. 8-13.3-507(3), from the employee's wages and must remit 50 percent of the premium required by C.R.S. 8- 13.3-507(3), to the Division.

C. Application of payments made to premiums

1. A payment received by the Division as a premium payment will be applied to the quarter for which the premium assessment applies.
1. (a) A payment exceeding the legal fees, fines, penalties, interest and premiums due for that quarter will be applied to any other debt owed to the Division in accordance with these rules.
2. (b) If no debt exists, premium overpayments of less than fifty dollars will be credited to future payments due.
3. (c) If no debt exists, premium overpayments of fifty dollars or more may be refunded to the employer at the employer's request. Otherwise, such overpayments will be credited to future payments due.
2. Payments received will be applied in the following order of priority:
1. (a) Current quarter balance;
2. (b) Any previous quarter premium balance due starting with the oldest quarter;
3. (c) Then beginning with the oldest quarter in which a balance is owed:
  1. (1) Penalties;
  2. (2) Fines;
  3. (3) Fees; and (4) Interest charges.

D. Pursuant to C.R.S. 8-13.3-507(6), premiums will not be required for wages, gross income, or net earnings from self-employment above the contribution and benefit base limit established annually for the federal social security administration for purposes of the federal old-age survivors, and disability insurance program limits pursuant to 42 U.S.C. § 430.

1.5.4 Calculating Employer Size Related To Premium Exemptions

A. For determining employer size for the purpose of determining premium liability pursuant to C.R.S. 8-13.3-507(5), an employee counts toward the total number of employees if he or she is employed during 20 or more workweeks in the preceding calendar year. A person is considered employed during a workweek for the purpose of determining premium liability if: (1) he or she performs any work for the employer during the workweek; or (2) he or she is on any type of paid or unpaid leave during the workweek, and the employer has a reasonable expectation that the employee will later return to active employment.

1. If the Division determines the employer's status has changed as it relates to premium liability, the Division will notify the employer as to their premium liability.
2. An employer's size for purposes of this regulation 1.5.4 will be calculated upon registration and annually thereafter during the first calendar quarter of the year. Any change to premium liability as a result of a change in employer size will happen no more frequently than one time per calendar year.

B. Determining in-state status of employees

1. An employee’s wages will be subject to premiums if:
1. (a) The employee’s entire service is performed within Colorado;
2. (b) The employee’s service is performed both within and outside of Colorado, but the service performed outside the state is incidental to the employee’s work within Colorado or, for example is, temporary or transitory in nature and consists of isolated transactions; or (c) Services are not localized in any state, but some of the services are performed in Colorado, and
  1. (1) The base of operations is in Colorado, or if there is no base of operations, then the place from which such services are directed or controlled is in Colorado as established in C.R.S. 8-70-117, or (2) The base of operations or place from which some part of the service is directed or controlled is not in any state in which part of the service is performed, but the employee’s residence is in Colorado.
2. Payment to Another Jurisdiction. An employer who has erroneously paid to another jurisdiction an amount as premiums properly payable to Colorado will not be delinquent if premiums properly payable to Colorado are paid within thirty days of the date on which the Division determines that such premiums are payable to Colorado.

1.5.5 Assessments and Recomputations of FAMLI Premiums

A. If, in the judgment of the Division or upon its information and knowledge, the report of wages included in an employer’s FAMLI premium report is incomplete or in error, the Division may require, and the employer shall respond within the time allotted, a further report, examine the employer’s relevant books and records, or use other reasonable measures to the extent necessary to obtain an accurate report.

B. If a contributing employer is delinquent in filing a wage report within the time prescribed by the Division, or fails to provide the Division with additional records needed to make a proper determination of an amount of indebtedness, the Division may, in its discretion:

1. Use the information and knowledge available to the Division to estimate the amount of chargeable wages paid by a contributing employer during the premium period or periods. The amount of chargeable wages so determined will be deemed to have been paid by the employer and will be used to determine the annual payroll;
2. Assess the employer for FAMLI premiums calculated on the basis of the estimated wages; and 3. Issue a subpoena duces tecum to compel an employer to release books and records to the Division for use in obtaining the required information.

C. A contributing employer who is delinquent in filing reports or paying FAMLI premiums will be promptly notified of the assessment by the communication method the employer elected during FAMLI registration. Premiums will not be considered delinquent if paid within thirty days after the date on which the Division notifies the employer of the delinquent payment.

D. The Division may correct errors of computation whenever such erroneous computations are found or brought to the Division's attention.

1.6 Notification of FAMLI Premium Liability

A. The Division will notify employers and individuals electing coverage of their expected premium amount on the first business day of the calendar month the premium is due to be paid.

1. Notification will be sent electronically, either via My FAMLI+ Employer or to the email address provided to the Colorado Department of Labor and Employment.
1. (a) Employers, including self-employed persons may choose a business representative such as a payroll service provider, attorney, or accountant to receive notification on their behalf.
2. (b) Local governments that have declined participation in the FAMLI program pursuant to C.R.S. 8-13.3-522, but which have agreed to withhold and remit the employee share of premiums for employees who elect coverage under C.R.S. 8- 13.3-514, will be provided a quarterly list of employees who have elected coverage pursuant to C.R.S. 8-13.3-514. Local governments which have declined participation in the FAMLI program pursuant to section C.R.S. 8-13.3- 522, and have declined to withhold and remit the employee share of premiums for employees who elect coverage under C.R.S. 8-13.3-514, will receive no such quarterly list.
2. A schedule of due dates as well as guidance as to how to remit premiums will be posted by the Division on the FAMLI website and will remain publicly available.

B. Employers not subject to a premium liability due to coverage through a pre-approved substitute private plan under C.R.S. 8-13.3-521 will not receive quarterly notifications of premium liability from the Division.

_________________________________________________________________________ Editor’s Notes History New rule eff. 01/01/2022.

Entire rule eff. 12/30/2022.