In November of 2020, employees in Colorado demonstrated via a state-wide ballot the value they place on the ability to access paid leave from their jobs when they experience important life events. In the years following this monumental vote, we have experienced the formation and launch of the Colorado Family and Medical Leave Insurance (FAMLI) program. Employers across the state have seen first-hand the tremendous impacts on leave utilization and growing complexities associated with managing their own internal leave and time-off programs alongside FAMLI.

With the ongoing availability of programs like Short-Term Disability (STD), Paid Time Off (PTO), sick pay, and internal Paid Leave programs, it is critically important that employers know how to coordinate access to all available programs in a way that balances the needs of employees with the need to maintain workforce productivity. As we reflect on what we’ve learned since this program launched a year ago, it is an opportune time to review best practices around building successful integrations of the myriad of Leave and time-off programs available to Colorado employees.

When considering a leave of absence, it’s important to know the various “buckets” of leave and time-off benefits you can draw from. For instance, when facing a surgery, you may be eligible for FAMLI leave, STD benefits and PTO. In this scenario, the coordination of these benefits is essential for ensuring that you’re not overcompensated or under-supported.

For employers, it is important that we structure our programs in a way that limits stacking of benefits. Stacking refers to the practice of either:

To avoid unnecessary stacking, we must ensure that (wherever permissible) all available programs are accessed simultaneously and coordinated in a matter where an employee receives no more than 100% of their earnings when the benefits of all applicable programs are combined. For example, when an employee applies for both FAMLI and STD in a well-coordinated system, the FAMLI benefit would pay first and then the STD payment would typically ‘top up’ the FAMLI benefit up to a guaranteed percentage of income replacement, with PTO potentially filling in the remainder of the gap to get the employee up to 100% income replacement. This level of program coordination requires communication, transparency and the formation of well-defined processes between an employer’s internal HR and Payroll teams, the STD plan administrator and the FAMLI benefit administrator. Although this kind of program integration structure is difficult to build and maintain, the alternative reality is employees accessing loopholes that result in them receiving payments which exceed their usual earnings. Not only does this impact the bottom line, but it also creates barriers to bringing employees back to work in a timely manner.

Similarly, leave stacking occurs when employees claim leave under different qualifying reasons, such as using FAMLI for one purpose and company policy for another. While this may provide flexibility, it can disrupt workplace operations. With a requirement to hold an open position for the employee during their time of leave, managers especially tend to feel the significant strains that can develop when leave entitlements are unnecessarily stacked.  For example, if an employee secures 12 weeks of leave through the state and then files for an additional 12 weeks with their employer, it will impact team dynamics and project timelines. To avoid these kinds of leave duration stacking concerns, an employer must have visibility to an employee’s reason for leave and have the necessary tools to ensure all applicable leave entitlements are being applied simultaneously.

To mitigate the potential challenges associated with stacking and ensure a smooth integration of leave plans, employers can take proactive measures:

Employers should conduct a thorough review of existing leave policies to ensure they align with the requirements of FAMLI and other applicable laws, and craft a practical plan that integrates each policy in a way that supports the needs of employees and employers.

One of the most effective ways to manage leave integration is through comprehensive manager training. Managers are often on the front lines, dealing with the challenges of employee absence directly. With MJ’s tailored training sessions, managers will be empowered with the knowledge of employees’ rights and responsibilities and be equipped with the tools to navigate employee absence effectively. For instance, establishing clear communication protocols will help managers mitigate disruption. Employers can require employees to notify them as soon as they anticipate taking time off, allowing for better planning and coverage during an employee’s absence.

Navigating the intricacies of leave plans in conjunction with CO FAMLI requires careful planning and communication. By ensuring that all leave options are well-integrated and understood, both employees and employers can benefit from a more harmonious workplace. Through policy reviews, manager training and effective communication, businesses can better prepare for and manage employee leaves, ultimately creating a more supportive environment for everyone involved.