Washington Paid Family and Medical Leave Program will take effect January 1, 2019. This is an insurance program that provides insurance payments to employees when the employees take a leave to care for their family or for medical reasons. The following two steps will implement this program:
(1) January 1, 2019: Collection and Payment of Insurance Premiums Begin
Employers collect and pay insurance premiums, which are 0.4% of employees’ wages, to the Washington Employment Security Department (“ESD”). Employers may either withhold part of the insurance premium from employees’ paychecks and pay the rest, or pay all insurance premiums. Employers may withhold up to 63% of the premiums from the employees’ paychecks. Employers with less than 50 employees are exempt from insurance premium payments, and there are exempt individuals and entities (see “Exempt Individuals and Entities” below).
(2) January 1, 2020: Insurance Payments to Eligible Employees Begin
Employees may receive insurance payments by submitting a claim with the ESD when they take a leave to care for their family members or for medical reasons. To be eligible, employees need to work 820 hours during the qualified period (see “Timing to Take Leave, Purposes, Conditions, and Caps” below). The work hours may be combined with the employees’ work hours at different employers.
Exemptions
(1) Small Businesses
Employers with fewer than 50 employees are not required to pay the employer portion of the premium. However, employees must withhold and pay the employees’ share of the premium to the ESD. The number of employees for early 2019 is calculated by headcount from employers’ first quarter report (i.e., January to March) and not by full time equivalent (FTE) employee. Starting September 2019, ESD will average the number of employees reported by an employer over the last four completed calendar quarters.
(2) Other Individuals and Entities
The following individuals and entities are not required to participate in this program:
– Federal employees
– Federally recognized tribes (may opt in)
– Self-employed individuals (may opt in)
– Some employees subject to a collective bargaining agreement executed by October 19, 2017 (participation required upon reopening, renegotiation, or expiry of the agreement)
– Some employees who work temporarily in Washington
Insurance Premium Collection and Payment
Starting January 1, 2019, employers are required to collect 0.4% of an employee’s gross wages (pre-tax, excluding tips) as the insurance premium. Premiums may be either withheld from employees’ paychecks or paid by employers. Employers, which choose to withhold premiums from their employees, may withhold up to 63% of the total premium but must pay the rest of the premium themselves. Employers report employees’ wages and work hours and pay the premiums by the next month after the end of each quarter. Quarters are divided by calendar; for example, the premiums from January to March need to be reported and paid in April, and the premiums from April to June need to be reported and paid in July. Premium withholdings are capped at the Social Security cap, which is $128,400 in 2018. The premium can be adjusted annually from 2021 by the ESD, according to rules set by the statute. (In March 2019, the ESD announced that the reporting timeline for the first quarter of 2019 has been changed to July 2019.)
Timing to Take Leave, Purposes, Conditions, and Caps
Employees may start taking Paid Family and Medical Leave starting January 1, 2020. Employees may take Paid Family and Medical Leave for the following purposes:
(1) Family Leave
– Care for a family member having a serious health condition
– Bond after a baby’s birth or the placement of a child younger than 18 (during the first 12 months after the event)
– Certain military-connected events. For specifics on military-connected paid leave, please see the guidelines issued by the U.S. Department of Labor.
(2) Medical Leave
– Care for an employee himself/herself in relation to a serious health condition
To qualify for Paid Family and Medical Leave, employees must work 820 hours or more for (i) the first four of the last five completed calendar quarters, or, if the eligibility is not established, (ii) the last four completed calendar quarters. Employees may combine their hours worked at multiple employers.
Employees may take paid family or medical leave for a minimum of eight consecutive hours and up to a maximum of 12 weeks. An additional 2 weeks of medical leave is available when the leave is the result of pregnancy complications. Employees are eligible for up to 16 weeks of leave when family and medical leave are used in combination. The combined total of family and medical leave may be extended to 18 weeks if employees experience a serious health condition with a pregnancy that results in incapacity.
If an employer has 50 or more employees, the employees are eligible for job protection if they have worked for that employer for 12 months or longer and have worked 1,250 hours in the year immediately preceding the first day of leave. An employer is considered to employ 50 or more employees if the employer employs 50 or more employees for each working day during each of 20 or more calendar weeks in the current or preceding calendar year.
Monetary Benefit
The monetary benefit for Paid Family and Medical Leave is provided on a weekly basis, ranging from $100 to $1,000. The amount is calculated based on an employee’s total wages paid during the two highest paid calendar quarters during the qualifying period, divided by 26, and rounded down to the nearest whole dollar. Take the calculated average weekly wages of the employee and apply one of the following formulas:
(1) If Half or Less Than Half of State’s Average Weekly Wage*:
The weekly benefit is equal to 90% of the employee’s average weekly wage, rounded down to the nearest dollar.
(2) If More Than Half of State’s Average Weekly Wage:
a) Take 90% of the employee’s average weekly wage, capped at half of the state’s average weekly wage.
b) Then take 50% of the employee’s average weekly wage that is above half of the state’s average weekly wage.
c) The sum of (a) and (b), rounded down to the nearest dollar with a cap of $1,000, is the weekly benefit.
As an exception, if an employee’s average weekly wage is less than $100, the weekly benefit is the employees’ full wage.
* The ESD announced that the State’s average weekly wage in 2017 is $1,190.
Record Keeping
Employers must keep the record of employment regarding Paid Family and Medical Leave for six years.
Notice to Employer
Employees must notify their employer 30 days prior to the qualifying event if foreseeable. If the event is not foreseeable, employees need to provide notice as soon as practical.
Voluntary Plans
Employers may provide paid family and medical leave by an employer-funded program, i.e., voluntary plan. Voluntary plans must be approved by the ESD and offer employees benefits that are equivalent or exceed the benefits of the state plan (application fee: $250. See the ESD’s “Voluntary Plans” page for more information and application). Employers must obtain reapproval every year for the first three years of a voluntary plan’s existence. After the three years, reapproval is required only if employers make changes to the plan. Voluntary plans may be provided for family leave, medical leave, or both. If only family leave or medical leave is provided, the other type of leave is provided under the state plan. Voluntary plans become effective on the first day of the quarter following the approval.
Employees, who receive benefits under a voluntary plan, must have worked 820 hours including 340 hours for that employer. Employees who are not yet eligible to receive benefits under a voluntary plan are eligible for coverage under the state plan if they have worked 820 hours.
Employers may encourage employees to return to work early by accelerating payment schedule if employers offer the employees at least one half the entitled amount of time for leave and compensate them the benefit amount they would have received had they taken the entire amount of leave. The decision on whether to accept the employer’s offer of accelerated payment and return to work early is entirely on the employee. Accelerated payments are available only through voluntary plans.
Recommended Action by January 1, 2019
The following actions are recommended to employers and workers who are covered by the Paid Family and Medical Leave:
– Calculate employee and employer premiums to collect them from January 1, 2019.
– Share the “Employer Toolkit” issued by the ESD with employers’ payroll company/administrator.
– Provide the one-page explanation ESD issued to your employees. The document is available in various languages.
– Post a notice regarding the Paid Family and Medical Leave in the workplace. The ESD will prepare the notice by the end of 2018.
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