Colorado PMFL Challenge Going to State Supreme Court

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The Paid Family Leave and Medical Leave Program (PFML) has recently been challenged by an in-state employer and the argument is going to the Colorado Supreme Court.

On November 3, 2020, Colorado voters approved the Paid Family Leave and Medical Leave Program (PFML). In January 2023, contributions will begin with benefits starting the following year in January 2024. The PFML gives employees within Colorado 12 weeks of paid family leave and medical leave. Payroll deduction premiums paid by the employer and the employee fund paid leave. However, there are employers who are exempt from PFML; employers with fewer than ten employees are not required to pay the premiums, and certain employers (local governments, independent contractors, sole proprietors, partners, and joint venturers) are not required to participate in the program at all.

The Colorado Supreme Court granted a petition in the case of Chronos Builders, LLC vs. the Colorado Department of Labor & Employment, Division of Family and Medical Leave Insurance to decide whether the Act violates the Colorado Taxpayer Bill of Rights (TABOR). TABOR requires taxable income to be taxed by one single rate. Chronos Builders argues that PFML violates TABOR by creating an income tax law change that creates different rates of taxable income. The court previously ruled that there was no violation of TABOR and that PFML did not create a change within Colorado tax law.

With only 9 months left until the beginning of contribution under PFML, this ruling will move quickly and will affect employers for the next two years.

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