On November 10, 2020, the CO Department of Labor and Employment (CDLE) adopted rules interpreting new and existing CO laws, including the Healthy Families and Workplaces Act (HFWA). HFWA becomes effective for employers with 16 or more employees on January 1, 2021, and for all employers on January 1, 2022. The new rules clarify HFWA topics as follows:
Responsibilities of Successor Employers
The rules define a successor employer as a business that acquires substantially all of the assets of another and hires one or more of its employees. The rules make successor employers responsible for the acquired business’s HFWA obligations, including accrued, requested, and in-progress leave.
Determining Employer Coverage
The rules adopted the federal Family and Medical Leave Act test to determine employer coverage; the employer must employ the requisite number of employees (16 for 2021) for each working day during 20 or more calendar workweeks in the current or preceding calendar year. Employers must count all full- and part-time employees in the U.S., including those on suspension or leaves of absence. This gives employers reaching the 16-employee threshold in 2021 20 weeks to comply with HFWA.
Paid Sick Leave Accrual
Paid sick leave accrues from the start of employment or on January 1, 2021, whichever is later. Accrual is based on all “time worked,” with regular and overtime hours counting equally. Exempt employees accrue based on their normal hours worked up to a maximum of 40 per week. Once employees have accrued 48 hours in the benefit year, they do not accrue more unless the employer chooses to provide a more generous amount. The best available, reasonable estimate should be used to determine accrual for employees paid on a fee-for-service basis for whom hours are not ordinarily tracked or cannot be feasibly tracked, except that higher education adjunct faculty paid on a per-credit or per-course basis accrue three hours of leave for each in-class hour.
“Benefit Year” Defined
A “benefit year” is the period of 12 consecutive months established by an employer in which an employee shall accrue and use paid sick leave. Unless otherwise established by an employer in a written policy, a “benefit year” is the calendar year. If an employer transitions from one “year” to another, it must ensure that HFWA rights are maintained during the transition and must notify employees in writing of the change.
Pandemic Health Emergency Supplemental Leave
On the day a public health emergency is declared, employers are required to immediately provide employees with a one-time grant of supplement leave. Employees who normally work 40 or more hours per week receive supplemental leave up to 80 hours. Employees who normally work less than 40 hours per week receive supplemental leave equal to the greater of:
- the number of hours the employee is scheduled for work in the upcoming 14-day period, or
- the number of hours actually worked on average in the 14-day period prior to the declaration of the public health emergency.
During the duration of a public health emergency (the time between the date on which the emergency is declared and for four weeks after its termination or suspension), employers must permit employees to take both sick leave they have accrued prior to the public health emergency and supplemental leave provided for the public health emergency, for any qualifying reason. Employers remain subject to HFWA’s paid sick leave accrual requirement during a public health emergency. Employees continue to accrue paid sick leave at a rate of 1 hour per 30 hours worked up to 48 hours per benefit year. Employers must permit employees to use their public health emergency supplemental leave prior to using previously-accrued paid sick leave if the employee is using leave for a reason that qualifies for both types of leave.
Pay Rate and Amount of HFWA Leave
HFWA leave must be paid at the same rate and with the same benefits, including health benefits, as the employee typically earns during hours worked, not including overtime, bonuses, or holiday pay. The pay rate must be at least the applicable minimum wage and, for employees with non-hourly pay, must be the employee’s regular rate, including all compensation received. Leave must be paid on the same schedule as regular wages. Employees can take leave for the number of hours the employer reasonably anticipates they would have worked during the period of the leave, based on:
- their regular schedule of hours actually worked;
- if leave is during a period the employee was anticipated to depart from a regular schedule, then the number of hours anticipated for that period; or
- if the number of hours the employee would have worked during the period cannot be reasonably anticipated, then their average hours worked during their most recent month of work.
Use of HFWA
Employees may use leave as soon as they accrue it and they can use leave intermittently. Employers can, in the ordinary course of business and in good faith, verify employee hours within a month after work is performed and adjust accrued leave to correct any inaccuracy with written notice to the employee. Employers may require that employees use leave in minimum increments no larger than one hour and no smaller than one-tenth of an hour (i.e., six-minute increments). Employers cannot count HFWA absences against employees for attendance purposes but can enforce attendance expectations once leave is exhausted.
Applicability of General PTO
Employers can use general paid time off (PTO) policies to comply with HFWA if they make clear to employees, in writing in advance of an actual or anticipated leave request, that their policies provide leave:
- in at least an amount of hours and with pay sufficient to satisfy HFWA (including, if a public health emergency is declared, a supplemental amount of leave required),
- for all the same purposes covered by HFWA,
- under all the same conditions as HFWA (including but not limited to accrual, use, payment, annual carryover, notice and documentation requirements, and anti-retaliation and anti-interference rights); and
- additional HFWA leave need not be provided when employees use all of their available PTO for non-HFWA-qualifying reasons (g., vacation), except if a public health emergency is declared and the employer must supplement leave to meet HFWA’s requirements.
Employers Council encourages all covered employers to review your policies to ensure they are compliant with the rulemaking. Please call us with questions.