Constitutional Challenge to Colorado’s Paid Family and Medical Leave
By Erik Cansler
A Grand Junction-based custom home builder, Chronos Builders, LLC (“Chronos”) has filed a lawsuit challenging the constitutionality of Colorado’s Paid Family and Medical Leave (“PFML”) law.[1] The law, passed in November, 2020 as Proposition 118, funds mandatory paid leave for Colorado workers. The lawsuit alleges its tiered-premium structure violates TABOR restraints on the State’s ability to retain and spend revenue.[2]
TABOR requires “all taxable net income to be taxed at one rate ... with no added tax or surcharge.”[3] The PFML will tax different employers at different rates and offers opt-out provisions for local government employers, the self-employed, and companies offering employees equivalent or better paid leave options.
Plaintiff Chronos argues the law may prevent it from hiring new employees and is unnecessary because the company historically has had a practice and informal policy of working with employees when a situation arose that would now be covered by Proposition 118.”[4]
Campbell litigation will closely monitor this suit, a clash between Colorado’s restrictions against new taxes and its commitment to improving its social safety net.
[1] Chronos Builders, LLC v. Department of Labor and Employment, et al., Denver District Court case no. 2021CV32203, filed July 13, 2021.
[2] Co. Const. Art. X, § 20; see, generally, leg.colorado.gov/agencies/legislative-council-staff/tabor, last visited September 23, 2021.
[3] Co. Const. Art. X, § 20(8)(a).
[4] Complaint, supra n. 1, at section 27-30.