After Years of Failures at the Capitol, Paid Family Leave Headed for Ballot
Proponents say benefit will help businesses compete, opponents wary of another payroll tax amid economic uncertainty

by Jessica Folker

For the past six years, Democratic state lawmakers have tried and failed to pass a paid family and medical leave bill. Now Colorado voters will have a chance to pass, or reject, the controversial program.

The Colorado Secretary of State’s Office on Aug. 25 announced the Paid Medical and Family Leave Initiative had qualified for the November ballot. If passed, Initiative #283 would create a family and medical leave program that provides up to 12 weeks of paid leave for employees, with an additional four weeks for complications due to pregnancy or childbirth.

Employees would be eligible to take leave starting Jan. 1, 2024,benefits maxing out at $1,100 per week during the first year and at 90% of an employee’s regular wage starting in 2025. The leave could be used to cover the birth, adoption or foster care placement of a child and to care for the child during the first year home, to care for a family member with a serious health condition or to cover the employee’s own serious health condition or emergency situation.

For the first two years of premium payments, the scheme would be funded through a payroll tax of 0.9% of a worker’s wage, with the contributions split 50-50 between employer and employee, although employers can pay up to the full amount if they choose. Starting in 2025, premiums would be adjusted so total contributions equal the program’s administrative costs plus 135% of the previous year’s claims, with a cap of 1.2% of each employee’s wages. The initiative allows employers with fewer than 10 employees to remit just the employee’s portion if they choose.

“Clients are concerned about [the initiative] simply from an economic standpoint,” said Fisher Phillips partner Kristin White, adding the state legislature passed a mandatory paid sick leave bill just months ago, which goes into effect January 2021, and many employers are already struggling with how to comply with that law during a time when revenues are down.

The ballot measure allows employers to opt for a private plan, rather than participating in the public program, as long as the private plan provides all the same rights, protections and benefits as the state plan. Before lawmakers abandoned their latest efforts to pass a family leave bill in May, Gov. Jared Polis had urged legislators to come up a family leave program that relied on the private market. But all three versions of the ballot initiative put forward by proponents relied at least partially on setting up a state-run program.

“I would be very surprised if … our governor supports this. I’d be anxious to see,” Holland & Hart partner John Husband said of the initiative. He’s also skeptical about whether voters will approve a measure that will eat into their paychecks, especially given the toll coronavirus has taken on many workers’ finances.

“Colorado has a strange history of tax increases. Sometimes the voters will say it’s a good idea, but most of the time they’re not too receptive to tax increases,” he said. “But I will say, with the influx of flight from the West Coast in particular that we’re seeing, who knows? We’re becoming a lot more like California as every year goes by.”

In 2004, California became the first state to implement a paid family leave program, and New Jersey, New York, Rhode Island, Washington, and Washington, D.C., have since followed suit. Three other states — Massachusetts, Connecticut and Oregon — have enacted paid family leave laws and will begin paying benefits in the next three years.

About 4–5% of covered workers in California and New Jersey use the program each year, according to Pronita Gupta of the Center for Law and Social Policy, speaking at a policy roundtable held Aug. 25 by Colorado Families First, the group behind the ballot initiative. Some of the benefits seen in states that have implemented programs so far, Gupta said, include a decrease in infant mortality and hospitalization, less postpartum depression and more breastfeeding among new mothers, and increased employee morale and retention.

Proponents of the initiative say low-wage workers and people of color are especially in need of a paid leave mandate. About 20% of U.S. workers have paid leave through their jobs, but the number rises to 35% for workers who earn in the top 10%, according to data from the U.S. Bureau of Labor Statistics. Among the bottom 10% of earners, only about 5% have paid leave through their jobs.

In Colorado, people of color are less likely to work in jobs that offer paid leave, Chris Stiffler, senior economist at the Colorado Fiscal Institute, said at the policy roundtable. About 20% of white workers in the state have paid leave, Stiffler said, while the figure is slightly under 16% for Black and Latino workers. Across all races, 17.6% of women are in jobs with paid leave, while 19.6% of men in Colorado are offered the benefit.

“Offering statewide paid family leave is a racial equity move because it’s going to help out those workers who are least likely to have access to paid family leave already,” Stiffler said.

Proponents also claim the measure will level the playing field for small businesses, which often struggle to find affordable private coverage and face fluctuations in premiums due to their small risk pools. They say the public program will help small businesses compete for talent with big companies, which are more likely to offer paid leave.

“I think it is becoming more of a draw for employers to have paid leave. I think with the younger generations that is becoming more of an issue,” said White. “I think there’s an argument there that it does allow them a way they can provide paid sick leave and not be footing the entire bill.”

But opponents also point to small business as a reason to reject a mandate. The National Federation of Independent Business was an outspoken critic of earlier bills resembling the proposed initiative, saying small businesses aren’t equipped to hold an employee’s position for 12 weeks. The Colorado Chamber of Commerce has also come out against the ballot initiative, with the organization’s board of directors voting Aug. 28 to oppose the measure.

The attorneys were split on whether the ballot measure stands a chance with voters. “I think, given the shaky nature of where we all are with the COVID scare, the economy and everything else, I’m predicting it won’t pass,” said Husband.

White looked to campaign finance contributions for clues. “It looks like the proponents for the bill have spent a lot more money. And if you make a correlation between campaign finance and winning, then it would look like this will pass,” she said.

“From a voter and an employee perspective, they see this as some more job security that people are looking for right now.”