A paid family leave bill being pushed by Colorado Democrats despite opposition from the business community passed a key Senate committee.
The Senate Finance Committee approved the legislation late Tuesday in a 4-3, party-line vote. The bill is intended to provide partial wage-replacement and job protection for individuals on family leave.
Senate Bill 188 would require employers to provide three months paid leave through the family and medical leave insurance (FAMLI) program. Workers and employers would have to contribute a premium based on their income to a state fund to pay for the benefit.
An employee making a $40,000 salary would pay a $128 annual premium under the legislation. The program would adjust the premium fees according to the program’s solvency.
The committee passed several amendments by bill sponsors Sens. Faith Winter, D-Westminster, and Angela Williams, D-Denver, who said the changes were requested by businesses.
One amendment would allow private companies to opt out of the program if they already offer a qualifying paid family leave plan. Another amendment clarified the program’s definition of a family.
Multiple amendments requested by Republicans were shot down by the committee.
A fiscal analysis by the legislative staff estimates that the program will pay out over $846 million in leave benefits for 2022-2023, the first full year the program is functioning. The program is estimated to cost a total of more than $870 million that year across all departments.
The analysis estimated the program will collect more than $922 million in revenue from employees and employers in 2021-2022, and over $956 million the next year.
It’s estimated the program will be staffed by more than 200 new, full-time employees by 2022-2023.
A list of Colorado business groups has lined up in opposition to the legislation, which includes the National Federation of Independent Business, the Colorado Chamber of Commerce, and the Colorado Restaurant Association.
“FAMLI sponsors insist this program will encourage entrepreneurial spirit. I must disagree,” Tony Gagliardi, NFIB-Colorado’s director, said on Twitter. “Entrepreneurs want to run their businesses with no government mandates.”
Republicans and conservative groups say the legislation’s required premiums function as a tax, despite being called a fee.
“This is a new tax on work. It is a bad idea,” Independence Institute economist Linda Gorman previously said. “It doesn’t treat people equally because the tax varies by the size of one’s employer and the supposed benefits differ by family size, family construction, health status, and social network.”