There are two very important Colorado requirements that will be affecting EVERY business owner with payroll. Please note, we are NOT HR experts. The purpose of this article is to give you a brief overview of these requirements and how it will affect your business.
- This program was voted into legislation in 2020. This is a way for employers to provide a platform for employees to save for their future. Employers will be required to provide a savings program such as an IRA OR employers will be required to offer the savings program through the state run Colorado SecureSavings platform. This particular program is for companies with five or more employees. As of Jan 1, 2022, you will be required to comply.
- Colorado has very few details available for this program as they are in the process of working out the fine print. We DO know that this will be an “Opt Out” program meaning employees will be AUTOMATICALLY signed up and will need to “Opt Out” if they do not wish to participate.
- From our understanding, Employers will not need to match the savings. However, employers are REQUIRED to facilitate the operations. Employers will withhold funds from the employee paycheck and will remit those funds to the Colorado SecureSavings account or IRA/retirement account.
If you prefer to set up an IRA or 401K plan for your employees (rather than using the state run Colorado SecureSavings program), we recommend that you do so VERY SOON. We have relationships with several brokers who can help you with this. Contact us if you are interested.
- This program applies to ALL employers regardless of the amount of employees you have. If you have employees, you need to understand these requirements.
- This is designed to help you employees receive pay when sick or other medically allowed life events as defined by the state of Colorado.
- Employers and their employees are both responsible for funding the program and may split the cost 50/50. The premiums are set to 0.9% of the employee’s wage, with 0.45% paid by the employer and 0.45% paid by the employee. Employers may also elect to pay the full amount if they choose to offer this as an added perk for their employees.
- Businesses with nine or fewer employees do not have to contribute to the program but do need to remit their employees’ share (0.45%) of the premium on behalf of employees each quarter. This can be done through a simple payroll deduction. Employers are required to begin these premium deductions on January 1, 2023. All employers, regardless of size, will be required to register with the FAMLI Division before the first premium payment is due at the end of the first quarter of 2023. Benefits will become available to workers starting in January 2024.
The team at Incline Business Essentials is becoming familiar with the requirements and will help you facilitate through your payroll process. We will help you every step of the way BUT you will have to be involved as the owner of the business. Please note that this will be additional work on our end and we will be billing accordingly. As the State requires additional layers to your responsibilities, it is our goal to assist you in every way possible.