On June 24, 2022, Colorado’s Department of Labor and Employment (CDLE) published a revised version of its Interpretive Notice & Formal Opinion (INFO) #6B regarding the Healthy Families and Workplaces Act (HFWA), the state’s paid sick leave law that first took effect in 2020.¹ Notably, the updated INFO #6B clarifies the amounts of accrued sick pay and public health emergency leave that employees are entitled to under the HFWA.

The Impact of Sick Pay Accrual When Unused Hours Carry Over Year to Year

First, the CDLE clarified the amount of sick pay that employees accrue when they carry over unused sick pay hours from one year to the next. To briefly recap, the HFWA requires that Colorado employees (1) accrue up to 48 hours of sick leave per year, (2) may use up to 48 hours of sick leave per year, and (3) must be permitted to carry over up to 48 hours of unused sick leave from one year into the next. However, the amount of sick leave that employers could accrue in the subsequent year if they carried over unused sick leave had previously been unsettled.

The revised INFO #6B answers this question by way of an example:

An employee earns 48 hours of accrued leave in a benefit year, and uses 8 of those hours during the year. This means that (A) 40 hours of unused, accrued leave “carry forward” and the employee can use these 40 hours in the next benefit year, and (B) the employee will continue to earn accrued leave, up to an additional 8 hours (for 48 hours total), during the benefit year. Another employee earns 48 hours of accrued leave in a benefit year, and uses none of those hours; so, 48 hours “roll over” for use in the next benefit year, and the employee doesn’t earn any more accrued leave during that year, because they have already been provided with 48 hours for the benefit year.

In short, this means that employers can count the amount of unused sick leave that is carried over to a subsequent year toward the employee’s entitlement to accrue sick leave hours in the subsequent year. An employee who carried over the full 48 hours from year one into year two thus does not accrue any additional hours in year two. The 48 hours of carried-over sick leave counts toward and fully satisfies the sick leave entitlement in year two. Colorado employers that permit employees to carry over hours into a subsequent year and also to accrue hours in excess of 48 hours in that subsequent year may want to revisit their policies to account for this new guidance.

Employers Can “Credit” Accrued Leave Toward an Employee’s Public Health Emergency Leave Entitlement

INFO #6B also clarifies the amount of Public Health Emergency Leave (PHEL) that employees are entitled to in Colorado. Under the HFWA, when a “public health emergency” is declared under the law—such as the emergency declared in connection with the COVID-19 pandemic, which remains in effect—employees are entitled to a “supplement” of their paid sick leave amounts of up to 80 hours of paid leave. But the law also provides that an employer can count accrued sick leave toward this 80-hour PHEL entitlement.

The CDLE’s new guidance makes clear that any accrued but unused sick leave in an employee’s sick leave bank when a PHEL request is made may be counted toward the 80-hour entitlement as a “credit.” Thus, employers do not need to calculate the amount of PHEL an employee is entitled to until the employee actually makes a request for PHEL leave. However, employees must still be permitted to use the supplemental leave before drawing down their accrued leave.

For example, take a full-time employee who has 30 hours of accrued but unused paid sick leave, who then requests PHEL because he gets COVID. At the time of the PHEL request, the employee would get a 50-hour supplement to bring him up to 80 hours of paid leave. The employee would then draw down the 50-hour supplement first, and—if the leave spanned longer than 50 hours—would draw down the 30 hours of accrued sick leave.

While these are the two most consequential clarifications contained in the CDLE’s revised INFO #6B, we encourage all Colorado employers to review the revised guidance and familiarize themselves with the requirements of the HFWA.