A new year almost always brings two things for Colorado employers:
Something changed.
And no one is quite sure who is responsible for updating it.
Colorado’s Family and Medical Leave Insurance (FAMLI) program is no exception. While the addition of Neonatal Care Leave is getting much of the attention, there are a few quieter but important updates for 2026 that small employers should not overlook.
This post focuses on the practical side of what needs attention so you can avoid payroll errors, employee confusion, or last-minute cleanups.
1) The FAMLI premium rate decreases in 2026
Effective January 1, 2026, the total FAMLI premium rate decreases to 0.88% of wages.
The contribution structure itself has not changed, but the lower rate still requires action on the employer side. Payroll systems, PEOs, and third-party providers do not always update automatically or consistently.
What to do:
Confirm that your payroll system is applying the 0.88% rate starting with your first 2026 payroll. If you split premiums between employer and employee, double-check that the correct percentage is being applied on both sides.
2) New leave types mean new questions
With Neonatal Care Leave now part of the FAMLI program, employees may reference leave types that managers and payroll teams are not yet familiar with.
This is where confusion tends to creep in. Employees apply through the state portal or you may have a private insurer, but employers are often pulled in when there are questions about pay timing, deductions, benefits continuation, or job protection.
What to do:
Make sure your internal leave guidance acknowledges that new FAMLI leave categories exist and clarifies what the employer does and does not control. Even a short internal FAQ can prevent a lot of unnecessary back-and-forth.
3) Payroll, benefits, and HR still need to be aligned (even if that’s one person)
FAMLI touches payroll, benefits, and HR functions. In many small businesses, those functions live with one person, not three departments. That does not reduce the complexity; it just means the context switching happens internally instead of across teams.
Where issues tend to show up:
- Payroll settings are updated late or inconsistently
- Benefits continuation questions surface mid-leave
- Employees receive mixed messages because there is no single, documented approach
What to do:
Even if you are the person handling all of this, take a moment to define your own process. Decide how you will handle deductions, benefits continuity, and employee questions, and write it down somewhere you can reference when things get urgent. A simple, repeatable approach matters more than a perfect one.
4) Manager guidance matters more than you think
In small organizations, managers are often closer to employees and more involved when life events happen. That can be a strength, but it also increases the risk of well-intended conversations going too far.
Most FAMLI issues do not stem from bad intent. They come from managers trying to be supportive without clear boundaries, especially when medical or family details are involved.
What to do:
Give managers a short, clear framework: acknowledge the situation, route leave logistics to HR (or the designated point person), focus on coverage and work planning, and avoid medical details. This protects employee privacy and keeps the business on solid ground.
5) Treat FAMLI like an ongoing operational item, not a one-time update
FAMLI is no longer “new,” but it is still evolving. Rates change. Leave categories expand. Portal processes shift.
What to do:
Build a simple annual check-in into your year-end or early-year admin work. Review rates, confirm payroll settings, refresh manager guidance, and update any employee-facing materials.
Final thought
Colorado’s paid leave program continues to add complexity for small employers, even when the intent is to support employees during critical moments. Staying ahead of the administrative details is one of the best ways to reduce disruption and risk when leave requests arise unexpectedly.
A little maintenance now goes a long way when something urgent lands on your desk later.
I work with small employers who are navigating FAMLI alongside everything else they already manage. The goal is not perfection. It’s having a clear, defensible process when something urgent comes up.
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