Colorado Adds New NICU Leave Under FAMLI: What Employers Should Know
Colorado’s Family and Medical Leave Insurance (FAMLI) program has provided employees with paid leave for major life events since 2024, including bonding with a new child and caring for a family member with a serious health condition.
Starting January 1, 2026, the state is expanding its FAMLI program to support employees facing one of the most stressful early experiences of parenthood: a newborn’s stay in a neonatal intensive care unit (NICU). Employees may qualify for a separate category of paid leave for NICU stays, allowing parents to spend essential time with their hospitalized newborn while preserving their full bonding leave once the child is home.
Key Changes Under the 2026 FAMLI Expansion
Colorado’s FAMLI program, which launched in 2024 to provide paid leave for employees to care for themselves or family members and to bond with a new child, has already reshaped how employers manage leave. Through SB 25-144, Colorado now introduces important updates that expand protections for parents and adjust program funding. Here are the key changes employers need to know:
- Additional NICU Leave. Under FAMLI, eligible employees are entitled up to 12 weeks of paid leave to care for and bond with a child. Beginning January 1, 2026, the FAMLI program expands to provide new parents with up to 12 additional weeks of paid leave while their newborn child is receiving inpatient care in a NICU. The state agency explained that parents may first take up to 12 weeks of NICU leave during the infant’s inpatient stay, and, once the infant is discharged, parents may then take up to 12 weeks of the bonding leave. In effect, eligible employees are entitled up to a combined 24 weeks of paid leave related to the birth and hospitalization of a newborn child.
- Adjusted Premium Rate. In addition to providing NICU leave, the new amendment to the FAMLI program reset the premium schedule. The current premium rate of 0.9% of wages per employee remains in effect through 2025, but the rate will decrease to 0.88% beginning January 1, 2026. For subsequent years, the director of the FAMLI program will set the premium annually (by September 1 of the preceding year), subject to a cap of 1.20% of wages per employee.
Next Steps for Employers
In anticipation of the NICU leave expansion, Colorado employers can take the following practical steps to ensure compliance with the expanded FAMLI program:
- Review and update HR policies and employee handbooks to incorporate the new NICU leave under FAMLI.
- Train managers on the new NICU leave entitlement, including how it interacts with the separate FAMLI bonding leave.
- Plan for potentially longer employee absences and adjust coverage or staffing as needed.
