If Pain, Yes Gain — Part 86: 3-in-1 Statewide Paid Sick Leave Law (Beyond COVID-19) Enacted In Colorado

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Seyfarth Synopsis: On March 11, 2020, Colorado became the first state to mandate COVID-19 related paid sick leave. The paid sick leave (“PSL”) bug continued to buzz through the state legislature, with the introduction of a general PSL bill in the Senate on May 26, 2020. After multiple revisions in both the House and Senate, the Healthy Families and Workplaces Act (the “Act”), which also accounts for the current COVID-19 pandemic and potential future public health emergencies, was passed by the General Assembly at the close of the legislative session on June 15, 2020, and signed into law by Governor Jared Polis on July 14, 2020. While the general PSL aspects of the Act do not begin until at least January 1, 2021, other COVID-19 related aspects appear to begin immediately.

With Governor Polis’ signature, Colorado became the 15th state with a mandatory general employer-provided paid leave law either in effect or scheduled to go into effect in the coming months.[1] In particular, covered employers with 16 or more employees’ general PSL obligations will take effect on January 1, 2021, and general PSL obligations for remaining covered employers, i.e., those with 15 or fewer employees, will take effect on January 1, 2022.

In addition to general PSL, the Act states that “on the date a public health emergency is declared, each employer in the state shall supplement each employee’s accrued [PSL] as necessary” to ensure that an employee may take specifically required amounts of PSL for covered reasons specified during the public health emergency.[2] The Act explains that employers must provide 80 hours of PSL to full-time employees, and a prorated amount to non-full-time employees (although offsets are possible, see below), as part of this separate “public health emergency” mandate. Notably, while not completely clear, it appears that this “public health emergency” mandate becomes effective immediately (i.e., as of July 14) given the Act’s lack of any reference to a specific effective date.

Also seemingly effective immediately due to the Act lacking any reference to a specific effective date, is the Act’s COVID-19 specific paid sick leave mandate. In particular, the Act states that “Employers in the state shall comply with the federal ‘Emergency Paid Sick Leave Act’ in the ‘Families First Coronavirus Response Act’ . . . . Through December 31, 2020, each employer in the state, regardless of size, shall provide [PSL] in the amount and for the purposes provided [pursuant to same] to each employee who is not covered under [the federal COVID-19 PSL mandate].”[3] 

The Act’s COVID-19 PSL mandate creates a number of outstanding questions. One such open question is what effect this mandate has on covered employers’ obligations under the Colorado HELP Rules, which were most recently amended and re-adopted on April 27, 2020. Further, if the Act’s COVID-19 PSL mandate supersedes the HELP Rules, it also is unclear if Colorado employers who have been providing PSL under the HELP Rules will receive any type of offset or credit against their new COVID-19 PSL obligations.

As Colorado employers await clarity on these and other aspects of the Act, one point that is clear is that Colorado employers have more expansive PSL obligations on the horizon, both in the long term and likely in the immediate term. Here is a breakdown of the Act’s key (a) general PSL, (b) additional “public health emergency” PSL, and (c) FFCRA-related COVID-19 PSL provisions.

1.    General PSL Obligations

• Effective Date: As noted above, the Act’s general PSL obligations (e., those outside of obligations (a) during a Public Health Emergency Declaration and (b) related to COVID-19 that are, at least in part, tied to the FFCRA and exist through December 31, 2020), take effect on January 1, 2021 for covered employers with 16 or more employees, and January 1, 2022 for all other covered employers. It is currently unclear how an employer’s size will be determined for purposes of these effective dates.
• Definition of “Employee” and “Employer”: For all purposes, the Act broadly defines “Employee” to include any person performing labor or services for the benefit of an employer in which the employer may command when, where, and how much labor or services shall be performed. Independent contractors and employees subject to the Federal Railroad Unemployment Insurance Act are excluded from coverage. “Employer” is also broadly defined for all purposes, to include every person, firm, partnership, association, corporation, and any agent or officer thereof of the above mentioned classes, employing any person in Colorado, with exceptions for certain public employers.
• Accrual Rate and Cap: Employees will be entitled to accrue one hour of general PSL for every 30 hours worked, up to 48 hours per year, unless the employer selects a higher limit.
• Frontloading: As an alternative to PSL accrual, an employer may satisfy its ordinary PSL obligations by providing 48 hours of general PSL, or a more generous amount, at the beginning of the year.
• Carryover: The Act provides that up to 48 hours of PSL that an employee “accrues,” but does not use, in a year carries forward to, and may be used in a subsequent year. However, it is silent on whether the above carryover obligations apply when PSL is frontloaded. Thus, at this time, it is unclear whether frontloading a sufficient amount of PSL will eliminate year-end carryover obligations.
• Annual Usage Limit: Employees will not be entitled to use more than 48 hours of PSL in a year, unless the employer permits a higher limit. The Act also adds that regardless of the above carryover obligations, an employer is not required to allow employees to use more than 48 hours of general PSL in a year.
• When Can Employees Accrue and Use General PSL? The Act provides that an employee begins to accrue PSL when employment with the employer begins and may use PSL as it is accrued. As a result, it appears likely that employers are not permitted to impose a probationary usage waiting period during which new hires accrue, but cannot use PSL for a limited period of time. If the Act’s general PSL mandate does not impose a new hire usage waiting period, as appears to be the case, it would deviate from the vast majority of existing general paid sick leave laws and ordinances. Also and relatedly, while the Act does not expressly confirm that existing employees begin accruing PSL as of the applicable effective date, this is likely the case.
• Reasons for Use:
  • Sick Time: Generally, the Act requires an employer to allow an employee to use available earned PSL for their own or a covered family member’s diagnosis, care, or treatment of, or recovery from, a mental or physical illness, injury or other health condition or for preventive medical care.
  • Safe Time: In addition, employees can use earned PSL for certain absences where the employee or their covered family member has been the victim of domestic abuse, sexual assault, or harassment.
  • Closures Ordered by a Public Official Due to a Public Health Emergency: In addition to the Act’s Public Health Emergency specific PSL obligations referenced above and discussed in more detail below, the Act states that an employee can use PSL when, due to a public health emergency, a public official has ordered closure of: (i) the employee’s place of business; or (ii) the school or place of care of the employee’s child and the employee needs to be absent from work to care for their child.
• Increments of Use: The highest minimum increment of use of PSL an employer is generally be able to impose under the Act is a one-hour increment. Employers’ PSL policies could allow PSL to be taken in smaller increments.
• Notice to Employer/Documentation:
  • Notice: Under the Act, an employer shall allow an employee to use general PSL upon the employee’s request. The request may be made orally, in writing, electronically, or by other means acceptable to the employer. Employers can require that employees include the expected duration of the absence when possible. While an employer may provide a written policy that contains reasonable procedures for providing notice when the use of PSL is foreseeable, an employer shall not deny PSL to the employee based on non-compliance with such a policy. Additionally, when the use of PSL is foreseeable, an employer can require an employee to make (a) a good faith effort to provide notice of the need to use PSL in advance, and (b) reasonable efforts to schedule the use of PSL in a manner that does not unduly disrupt the operations of the employer. The Act is silent on the use of general PSL in unforeseeable circumstances.
  • Documentation: Outside of additional “public health emergency” PSL discussed below, employers can require an employee to provide reasonable documentation that general PSL was used for a covered reason outlined above when the employee has been absent for four or more consecutive workdays. The Act is silent on what forms of documentation are considered reasonable.
• Rate of Pay When PSL Is Taken: PSL is defined as time off from work that is compensated at the same hourly rate or salary and with the same benefits, including health care benefits, that the employee normally earns during hours worked. The hourly rate or salary does not include overtime, bonuses, or holiday pay, and the Act provides specific calculations for employees paid commission only, as well as commission plus base wage. Notably, it appears the above payment standards apply all three forms of PSL under the Act, i.e., general PSL, “public health emergency” PSL, and FFCRA-related COVID-19 PSL.
  • Note: For purposes of at least general PSL, the Act contemplates that PSL compensation for employees paid on a fee for service basis will be determined via rules promulgated by the Division of Labor Standards and Statistics within the Colorado Department of Labor and Employment.
• Additional Obligations Addressed by the Act: The Act touches on a number of other employer obligations. While a few of these obligations are specific to general PSL, most appear to apply to all three types of PSL under the Act. These provisions include, but are not limited to: (A) Definition of “family member,”[4] “public health emergency,”[5] and “year”; (B) Existing employer provided paid leave policies that can satisfy general and additional public health emergency PSL obligations under certain circumstances; (C) No obligation to payout earned, unused PSL upon separation from employment; (D) reinstatement of unused PSL upon rehire; (E) Anti-retaliation and discrimination; (F) Rules for providing employees with notice of their rights under the Act, posting information on the same in the workplace, and related penalties for failure to comply; (G) Recordkeeping; (H) Non-disclosure of confidential information relating to specific details of employees’ PSL use by employees to employers, and to the extent employers do have such information, non-disclosure on the employer’s part of any such information obtained; (I) Interplay with other legal requirements, in particular, (a) non-preemption or limitation of any other law, regulation, requirement, policy, or standard that provides for a greater amount of PSL accrual or use to employees, or extends other protections, and (b) PSL provided pursuant to the Federal Contractor PSL Executive Order being considered PSL for purposes of the Colorado Act, to the extent not in conflict with federal law; and (J) Exemptions for employees covered by collective bargaining agreements (“CBAs”) where the CBA is in effect as of the applicable effective date under the Act and provides equivalent or more generous PSL benefits.[6]

2.    Additional PSL During a Public Health Emergency

As noted above, in addition to general PSL under the Act, and apparently effective immediately, employers and employees will be required to provide additional PSL on the date a public health emergency is declared. Key employer obligations in this regard are as follows:

• Amount of Public Health Emergency PSL Required: Employers must supplement each employee’s accrued PSL as necessary to ensure the employee has may take the following amounts of PSL for covered reasons specifically applicable during the public health emergency declaration (see below). For employees who normally work 40 or more hours in a week, the amount of PSL required is at least 80 hours. For employees who normally work fewer than 40 hours in a week, the amount of PSL required is at least the greater of either (a) the amount of time the employee is scheduled to work in a 14-day period, or (b) the amount of time the employee actually works on average in a 14-day period.
• Offsetting Amount Based on Accrued, Unused General PSL: An employer is permitted to count an employee’s unused, accrued PSL that the employee is provided pursuant to the Act’s general PSL requirements, toward satisfying the above supplemental PSL amounts required during the declaration of a public health emergency.
• One-Time Entitlement/Duration of Employee Access to Supplemental Public Health Emergency PSL: Employees are only eligible for supplemental PSL up to the amounts described above once during the entirety of a public health emergency. This is true even if the same public health emergency is amended, extended, restated, or prolonged. Notwithstanding the preceding requirement, an employee may use supplemental PSL provided during a public health emergency until four weeks after the official termination or suspension of the public health emergency.
• Reasons for Use: Employers are required to provide employees with the amount of PSL, supplemented as necessary, for the following reasons related to a public health emergency:
  • (1) An employee’s need to: (a) self-isolate and care for oneself because the employee is diagnosed with a communicable illness that is the cause of the public health emergency; (b) self-isolate and care for oneself because the employee is experiencing symptoms of a communicable illness that is the cause of a public health emergency; (c) seek or obtain medical diagnosis, care, or treatment if experiencing symptoms of a communicable illness that is the cause of a public health emergency; (d) seek preventive care concerning a communicable illness that is the cause of a public health emergency; or (e) care for a family member because the family member is experiencing circumstances outlined in items (a) through (d) above;
  • (2) With respect to a communicable illness that is the cause of a public health emergency, a local, state, or federal public official or health authority having jurisdiction over the location in which the employee’s or employee’s family member for whom the employee needs to care’s place of employment is located or the employee’s or employee’s family member for whom the employee needs to care’s employer determines that the employee’s or family member for whom the employee needs to care’s presence on the job or in the community would jeopardize the health of others because of the employee’s or family member for whom the employee needs to care’s exposure to the communicable illness or because the employee or family member for whom the employee needs to care is exhibiting symptoms of the communicable illness;
  • (3) Care of a child or other family member when the individual’s child care provider is unavailable due to a public health emergency, or if the child’s or family member’s school or place of care has been closed by a local, state, or federal public official, or at the discretion of the school or place of care due to a public health emergency, including if a school or place of care is providing instruction remotely; or
  • (4) An employee’s inability to work because the employee has a health condition that may increase susceptibility to or risk of a communicable illness that is the cause of the public health emergency.
• Notice to Employer/Documentation: Notwithstanding any other provision of the Act (i.e., general notice and documentation provisions summarized above), an employee must notify their employer of the need to use PSL for covered public health emergency reasons summarized above as soon as practicable when the need to use such PSL is foreseeable and the employee’s place of business has not closed. Notice requirements for unforeseeable public health emergency PSL use and when the employee’s business is closed are not addressed in the Act. Documentation is not required to take public health emergency PSL under the Act.

3.    PSL Related to COVID-19 (FFCRA Extension)

As noted above, employers are required to provide all employees who are not entitled to PSL under the FFCRA with the amount of PSL called for by the FFCRA for FFCRA covered reasons. This obligation appears to begin immediately, and will run until December 31, 2020. Here is an overview of employers’ general FFCRA obligations, and FFCRA obligations applicable to Colorado employers if the legislation takes effect, with similarities and differences highlighted where applicable.[7]

• Employer Coverage/Employee Eligibility:
  • FFCRA In General: The FFCRA generally applies to private employers with fewer than 500 employees, as well as certain public sector employers. Employers of emergency responders and health care providers can exclude such employees from coverage. There are limited good faith exceptions for employers with less than 50 employees.
  • Colorado PSL Law: As noted above, the FFCRA’s amount of PSL and reasons for use obligations would be extended to all covered employers under the Act, regardless of size, and would require PSL to be provided to all employees not covered by the FFCRA. Thus, Colorado employers exempt from coverage given their size, with respect to emergency responders and health care personnel, or pursuant to the good faith exemption for small businesses under the FFCRA appear obligated to provide FFCRA-related COVID-19 PSL to their employees.
• Amount of PSL/No Waiting Period for Use Under FFCRA: The amount of FFCRA PSL required is as follows: (a) Full-Time Employees: 80 hours; (b) Part-Time Employees: Amount is prorated based on number of hours that such employee works, on average, over a 2-week period. PSL under the FFCRA is available for immediate use regardless of length of employment, which likely applies to COVID-19 PSL under the Act in Colorado.
• Reasons for Use Under FFCRA In General and Colorado PSL Law: Employees can use PSL under the FFCRA when the employee is unable to work (or telework) due to a need for leave because: (1) they are subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) The employee is caring for an individual, which notably, does not need to be a family member, who is subject to an order as described in reason for use (1) or has been advised as described in reason for use (2) (as described above); (5) The employee is caring for a child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions; and (6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
• Rate of Pay When PSL Is Taken:
  • FFCRA In General:
    • Covered Absences Nos. 1 through 3 Above: 100% of employee’s regular rate of pay or applicable minimum wage, whichever is greater. Pay is capped at $511 per day and $5,110 in the aggregate.
    • Covered Absences Nos. 4 through 6 Above: Can be paid at 2/3 of employee’s rate of pay. Pay is capped at $200 per day and $2,000 in the aggregate.
  • Colorado PSL Law: Notwithstanding the above rate of pay requirements under the FFCRA, as noted in our discussion of the Act’s general PSL provisions, PSL taken for general, additional public health emergency leave, or FFCRA covered reasons is compensated at the same hourly rate or salary and with the same benefits, including health care benefits, that the employee normally earns during hours worked. The Act does not mention the above rates or caps based on the particular reason for use of PSL for covered reasons under the FFCRA.
• Documentation:
  • FFCRA In General: The FFCRA Regulations provide that an employee must provide their employer with documentation containing the following information prior to taking PSL: (1) Employee’s name; (2) Date(s) for which leave is requested; (3) Qualifying reason for the leave;[8] and (4) Oral or written statement that the employee is unable to work because of the qualified reason for leave. 
  • Colorado PSL Law: In contrast, as noted above in our discussion of general and additional public health emergency PSL use, an employer may require reasonable documentation that the PSL is used for an authorized purpose under the Act when the employee has been absent for four or more consecutive workdays, except documentation requirements are not permitted when an employee uses additional public health emergency PSL. It is unclear if these documentation provisions under the Act apply to FFCRA-related COVID-19 PSL under the Act or if employers are limited to the FFCRA’s specified documentation standards.

4.    Colorado HELP Rules

As previously reported, on March 11, 2020, the Colorado Department of Labor and Employment (“CDLE”) published the HELP Rules to aid in combatting COVID-19. The HELP Rules were a temporary mandate that went into effect immediately, requiring up to four days of PSL related to suspected COVID-19 cases. The Rules had since been amended to slightly elaborate on the permitted reasons for use, increase the amount of PSL to two weeks (up to a maximum of 80 hours), and expand the industries subject to the rules, most recently on April 27, 2020, among other changes. However, and despite nothing to this effect in the Act, the CDLE webpage for the temporary HELP Rules appears to have been taken down as of the drafting of this alert. Although not entirely clear, it appears employers’ HELP obligations may be replaced with those provided under the Act’s FFCRA-related COVID-19 PSL. It also is not clear whether previous PSL provided in line with the HELP rules would offset the amount of COVID-19 PSL employers are required to provide for the remainder of the year.

We will continue to monitor Colorado PSL developments and inform employers of any updates as appropriate. In the meantime, here are some steps for Colorado employers to consider:

• Implement COVID-19 specific PSL policies, and/or revise existing paid leave, disciplinary, and attendance policies, to account for the new mandates under the Act.
• Monitor the Colorado Department of Labor’s website for regulations and/or guidance on employers’ COVID-19 PSL obligations, now seemingly in effect, and impending general PSL obligations.

With the COVID-19 and paid leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with the FFCRA, HELP Rules, and potentially, the Colorado PSL bill, if it becomes law. To stay up-to-date on COVID-19 developments, click here to sign up for our daily digest. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to sickleave@seyfarth.com.

 

[1] Currently, there are 14 other generally applicable employer-provided paid time off mandates either in effect or scheduled to go into effect in the coming months: (1) Arizona; (2) California; (3) Connecticut; (4) Maine (PTO law; Effective 1/1/2021); (5) Maryland; (6) Massachusetts; (7) Michigan; (8) Nevada (PTO Law); (9) New Jersey; (10) New York (Effective 9/30/2020); (11) Oregon; (12) Rhode Island; (13) Vermont; and (14) Washington. This tally does not include: (a) states with COVID-19 specific employer-provided paid time off mandates either in effect or scheduled to go into effect alone; (b) federal and/or local employer-provided paid time off mandates whether generally applicable and/or specific to COVID-19; or (c) state and local paid family and medical leave programs.

[2] The state’s current state of disaster emergency declaration is set to expire 30 days from June 19, 2020, unless extended.

[3] The Families First Coronavirus Response Act (“FFCRA”) went into effect on April 1, 2020, and contains both PSL and expanded family medical leave, i.e., paid family medical leave (“PFML”), mandates. The FFCRA’s paid leave mandates sunset on December 31, 2020.

[4] “Family Member” means (A) an employee’s immediate family member, as defined under Colorado Revised Statutes Section 2-4-401 (3.7), (B) a child to whom the employee stands in loco parentis or a person who stood in loco parentis to the employee when the employee was a minor, or (C) a person for whom the employee is responsible for providing or arranging health or safety related care.

[5] “Public Health Emergency” means (A) an act of bioterrorism, a pandemic influenza, or an epidemic caused by a novel and highly fatal infectious agent, for which: (I) an emergency is declared by a federal, state or local public health agency; or (II) a disaster emergency is declared by the Governor; or (B) a highly infectious illness or agent with epidemic or pandemic potential for which a disaster emergency is declared by the Governor.

[6] For CBAs negotiated after the applicable effective date under the Act, a similar exemption exists if (a) the Act’s requirements are expressly waived in the CBA, and (b) the Act provides equivalent or more generous PSL benefits.

[7] For more information on the FFCRA’s requirements in general, see our prior Legal Updates here, here, and here.

[8] To take PSL related to a covered “order of quarantine or isolation,” as described above, the employee also must provide the employer with the name of the government entity that issued the order. To take PSL related to “self-quarantine based on a medical provider’s recommendation,” as described above, the employee also must provide the employer with the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19. To take PSL related to “caring for an individual,” as described above, the employee also must provide the employer with either: (1) the name of the government entity that issued the order to which the individual being care for is subject; or (2) The name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. To take PSL related to “a school or place of care closure,” as described above, the employee also must provide the employer with (1) the name of the son or daughter being cared for, (2) the name of the school, place of care, or child care provider that has closed or become unavailable, and (3) a representation that no other suitable person will be caring for the son or daughter during the period for which the employee takes PSL.