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updated December 3, 2018

In July 2017, the WA State legislature voted to provide statewide Paid Family and Medical Leave (PFML).  Washington will be one of only 5 states in the nation to offer this type of benefit to workers, and its program is, by far, the most generous of those available. This new insurance program, which will be administered by the Employment Security Department (ESD), will allow eligible individuals to take partially paid leave for up to 12-18 weeks, if they have qualifying circumstances.  Because this is the first leave law in the country that has been built from scratch rather than structured around existing disability benefits, it is paramount that employers understand PFML and know their obligations under the new law.

How Does It Work?

Employees can begin using paid family and medical leave benefits January 1, 2020.  PFML will allow workers to take anywhere from 12-18 weeks of paid leave depending on circumstances. In general, employees will be eligible for 12 weeks of partially paid leave for:

  • the addition of a new child to the family (through birth, foster care or adoption).  This applies to both mothers and fathers
  • an employee’s or family member’s serious illness or injury
  • certain military- related events, such as short-notice deployments, urgent childcare related to military service, and post-deployment activities.  

A worker can receive up to 16 weeks of partially paid leave if they have multiple covered events take place in the same year, and they can take up to 18 weeks if they experience a serious health condition during pregnancy that results in incapacity, such as bedrest.  

Who Is Eligible?

Individuals are eligible to receive PFML if they have worked a minimum of 820 hours in the last year, which averages out to about 15 hours/week.  (Self-employed individuals, such as independent contractors, and tribes can also opt in to the program.) The new legislation does not require that all 820 hours be for the same employer.  

While employers must provide the leave to eligible employees, those who employ less than 50 people are not required to hold an employee’s position for them while they are on leave.  For an employee’s position to be restored to them, they must:

  • work for an employer with more than 50 employees
  • have worked for that employer for over 12 months
  • have worked at least 1250 hours in the 12 months before taking leave.

Who Pays For The Program?

The premium for this new benefit program will be 0.4% of a worker’s salary.  Much like health insurance benefits, premiums will be paid by both employees and employers to fund the new benefit program, and the employee premium will be withheld from each paycheck. For example, if an employee’s annual salary is $50,000, they can expect to pay a premium of about $2.40/week; the remaining amount will be paid by the employer. 

Businesses with less than 50 employees are not requireed to pay the employer portion of the premium, which is 37%, though they may elect to do so.  However, they are still responsible to file quarterly reports and to collect and remit the employee portion of the premium to the ESD.  Employees can expect to see withholding for the new leave benefit beginning January 1, 2019, and benefits can be drawn beginning January 1, 2020.  

How Much Do Eligible Employees Receive?

When workers receive partial pay during leave, they will be entitled to receive a weekly minimum of $100, and a weekly maximum of up to $1000.  The amount a worker receives is based on their current salary, the state median income, and a formula used by the Employment Security Department.  These factors will determine what percentage of an employee’s salary they will receive during leave, and they will cover a low wage earner's income up to 90%. 

Is Employer Assistance Available?

Though employers with more than 50 employees are required to pay the employer portion of the premium, assistance is avaibale for those weith 50-150 employees. Employers of this size are eligible to receive a $1000 grant from the state to cover additional wage-related costs, such as overtime, certifications, and equipment.  They are also eligible to receive a $3000 grant form the state if they hire a temporary employee for more than 7 days to replace the employee on leave.  Employers of this size can apply for up to 10 grants per year, but they can only apply for one per employee.    

What Should Employers Know About Reporting?

Along with premium payments, employers are required to submit quarterly reports to the ESD beginning in April 2019.    Quarterly reports must contain:

  • Name
  • SSN
  • Quarterly wages
  • Total quarterly hours worked
  • Zip code of primary work location
  • Job title
  • Start date

A reporting portal is currently in development and will be different from the unemployment reporting portal.  Reportable wages include straight-time pay, overtime pay, stipends, bonuses, paid leave (sick, vacation, holiday), and backpay awards.  Wages over the Social Security cap of $128,400 are not subject to a premium asessment.  Tips are also not included in reportable wages.   The ESD has also specified that wages paid in 2019 for hours worked in 2018 should be included in first quarter reporting for 2019. You can visit the ESD website to learn more about employer reporting and premium details.

How Can I Learn More?

This new legislation brings a number of new obligations for employers, which can be challenging to understand and implement.  Whether you have questions about further understanding the details of PFML or want to design a voluntary plan so your company can establish its own paid family leave and medical leave program(s), Berg Andonian will work with you to navigate this new program and provide what you need.  Call us today!

Published November 20, 2018.