Colorado Family and Medical Leave Insurance Program
Effective January 1, 2023, Colorado is requiring non-exempt employers to withhold and pay premiums to the Family and Medical Leave Insurance program. The Colorado Family and Medical Leave Insuranceprogram (CO FAMLI) is funded through premiums paid by covered individuals and employers in the form of paycheck withholdings and is administered by the Colorado Department of Labor and Employment (CDLE).
The mission of the plan is to provide Colorado workers with access to paid leave when facing significant life events. Eligible Colorado workers will be able to access paid leave beginning January 1, 2024. Employees may choose to participate in this program before they are required once they become eligible. Eligibility to participate in the leave program is determined after employees have earned at least $2,500 in wages within the state in the last four calendar quarters.
Employers with at least one qualified employee are required to register with the Family and Medical Leave Insurance (FAMLI) Division. Employers are required to pay premiums and report to the CDLE quarterly. Employers who offer a qualified private plan that offers similar benefits can opt out of the state plan. These employers will need to get their private plan approved by the FAMLI division by January 1, 2024.
Qualified employees are defined as employees who have worked 20 or more calendar workweeks. Unless exempt, employees are required to pay 0.45% premium to the program. Employers with 10 or more qualified employees from the preceding calendar year will also be responsible for paying a 0.45% premium for the current year. If an employer has fewer than 10 qualified employees, they will not be liable for the employer portion of the premium. Participation for self-employed individuals and independent contractors is optional. Learn more about family and medical leave insurance for employers.
Square Payroll Coverage
Square Payroll supports CO FAMLI premium calculations, withholdings, payments, and reporting with a few exceptions.
Covered W-2 employee premiums of 0.45% will be withheld from the employee’s paychecks and withholdings will be reported on their W-2s. Per the Colorado FAMLI Act, payroll deductions cannot be made retroactively if the premiums were not deducted from wages during the pay period the employee was paid. Any premiums not withheld from the employee’s paychecks will be collected from the employer to ensure the total amount remitted to CO FAMLI will be correct.
Employers with at least 10 qualified employees will be responsible for contributing the employer portion of the premium, bringing the total premium amount to 0.9% (0.45% paid by the employee and 0.45% paid by the employer). If an employer has less than 10 qualified employees, they will only be liable to contribute the employee portion of 0.45%.
What Square Payroll Does Not Cover
Square Payroll does not offer the option for employers to cover the W-2 employee’s portion of the CO FAMLI tax that is withheld from the employee’s paychecks. Square Payroll also does not offer the option for employers to cover contractors paid through Square Payroll for the CO FAMLI tax.
My FAMLI+ Account Registration
In order for Square Payroll to file and pay this tax on your behalf, you will need to complete the following:
Indicate your CO FAMLI tax liability status in your Square Payroll account.
Provide us with your 10-digit CO FAMLI account number.
Grant Square Payroll Third-Party Administrator (TPA) access.
Small businesses and exempt employers
For Square Payroll to accurately calculate your taxes, log in to your online Square Dashboard, go to Payroll > Settings > Tax Info, and select one of the following options:
I employed fewer than 10 individuals in the previous year and will not pay the employer portion of the tax.
My business is exempt from participating in the CO FAMLI program.
I employed 10 or more individuals in the previous year and will pay the employer portion of the tax.
Small businesses that employ less than 10 covered individuals are not required to pay the employer portion of the premium; we will only withhold the employee contributions. If you would like to opt in to pay the employer contribution, choose the third option.
Local government employers, nonparticipating self-employed, and employers with approved private plans may be qualified for an exemption. If your business is approved for an exemption from the CO FAMLI program, select the second option. To learn more about exemptions or how to determine your workforce size, visit the CO FAMLI website.
Create a My FAMLI+ account
To receive your 10-digit CO FAMLI account number, you will need to create an account in the My FAMLI+ Portal. For more information about the registration process, reference the Employer User Guide. You can find your 10 digit account number by clicking Manage Accounts' in the Dashboard tab of the MyFAMLI+ portal.
After you complete the registration process:
Log in to your online Square Dashboard and select Payroll > Settings > Tax Info.
Enter your 10-digit account number in the Colorado Family and Medical Leave Insurance Account Number field and click Save changes.
Add TPA for Square Payroll
Once you register for a My FAMLI+ account, you will need to provide Square Payroll with TPA access to file on your behalf. Follow these steps to add TPA to your account:
Sign in to your MyFAMLI+ Employer account
Click Manage Accounts under the Manage My Accounts tab at the top right of the page.
In the Account name column of the table, select your company’s tax account.
Once you are in your account page, you will need to scroll down to the section titled Third Party Administrator.
Here, you will be able to search for Square Payroll Inc. and enter the start date as the date you sent your first pay date with Square Payroll.
Ensure your information is correct and select Save.
Confirm your information is correct and select Yes, add TPA.
You will now see the Square Payroll under the TPA Account column in your Account's page.
For more information please reference the Employer User Guide.