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As expected, Colorado Governor Jared Polis recently signed SB 20-205 into law, which requires employers of 16 or more employees to provide paid sick leave to all employees effective January 1, 2021. The requirement is delayed by one year for employers of 15 or less employees ¾ these employers must provide paid sick leave effective January 1, 2022. (See Tax Alert 2020-1621.)

Previously, Governor Polis took the lead on Colorado paid sick leave by issuing temporary, emergency paid sick time during the COVID-19 emergency through his Colorado Health Emergency Leave Pay (HELP). (See Tax Alert 2020-1621.)

Under SB 20-205, through December 31, 2020, employers must comply with the "emergency paid sick leave act" provided in federal Pub. L. 116-127, the Families First Coronavirus Response Act (FFCRA). Additionally, all Colorado employers, regardless of size, must provide paid sick leave in the amount and for the purposes provided in the federal "emergency paid sick leave act" in the FFCRA to each employee who is not covered under the "emergency paid sick leave act."

Paid sick leave law provisions

Effective January 1, 2021, employees will begin to accrue sick leave at a rate of one hour for every 30 hours worked, up to a yearly maximum of 48 hours. Employees will immediately be able to begin using their accrued sick leave as it is accrued.

Employees may use accrued paid sick leave for the following purposes:

• The employee has a mental or physical illness, injury, or health condition; needs a medical diagnosis, care, or treatment related to such illness, injury, or condition; or needs to obtain preventive medical care.
• The employee needs to care for a family member who has a mental or physical illness, injury, or health condition; needs a medical diagnosis, care, or treatment related to such illness, injury, or condition; or needs to obtain preventive medical care.
• The employee or family member has been the victim of domestic abuse, sexual assault, or harassment and needs to be absent from work for purposes related to such crime.
• A public official has ordered the closure of the school or place of care of the employee's child or of the employee's place of business due to a public health emergency, necessitating the employee's absence from work.

Employers may choose to "front load" sick leave, providing employees with the total amount of required sick leave at the beginning of the year rather than waiting for the employee to accrue the hours.

An employee's unused sick leave must be carried over to the next year; however, an employer may limit the use of sick leave to 48 hours per calendar year.

Employers are not required to pay employees for unused sick leave upon termination, resignation, retirement or other separation from employment.However, if a former employee is rehired by the same employer within six months of the separation, the employer must reinstate any paid sick leave that the employee had accrued but not used prior to the separation.

Employers with a pre-existing sick leave policy are not required to provide any additional sick leave if the employer's plan meets or exceeds the requirements under the new law.

Paid sick leave must be paid at the same rate of pay the employee is paid for regular working hours, or at the state minimum wage, whichever is greater.Employees transferred to a separate division of the same employer or to a successor employer must be allowed to transfer their accrued sick leave to their new place of employment.

Employers are required to notify each employee in writing of their right to paid sick leave and to display a poster in the workplace that will be developed by the Colorado Department of Labor and Employment. The Department will publish a model notice to satisfy the requirement of providing written notice to each employee.

For a two-year period, employers must retain records documenting, by employee, the hours worked, paid sick leave accrued, and paid sick leave used and make such records available to the Department. The Department must adopt rules to administer the paid sick leave law.

In addition to the paid sick leave accrued by an employee, the bill requires an employer to provide its employees an additional amount of paid sick leave during a public health emergency (i.e., COVID-19) in an amount based on the number of hours the employee works.

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