Washington State has begun implementing its new Paid Family & Medical Leave program (“PFML”). Other states, such as New Jersey, New York, and Rhode Island already have paid family and medical leave programs in place, and now Washington, Massachusetts and Washington, D.C. are set to join them over the next few years. Although the benefits portion of Washington’s program does not kick in until 2020, employers’ reporting and remitting of premiums for Quarters 1 and 2 are due between July 1 and July 31, 2019.
The Washington Employment Security Department (“ESD”), which will administer the PFML program, has provided a useful website that summarizes key components of the new statute. Beginning January 1, 2020, employees may collect benefits pursuant to the PFML for (i) their own serious health condition, (ii) to bond with a newborn child or a child placed for adoption or foster care, (iii) to care for a family member with a serious health condition, or (iv) for certain military-connected activities. Under the PFML, most employees will be eligible for a maximum of 12 weeks of partially paid leave.
Current Law Will Sunset
As the PFML becomes effective, Washington’s current Family Leave Act (“FLA”) will sunset on December 31, 2019. The PFML itself does not provide job-protected leave, so in order to receive job protection, employees must be covered under the federal Family and Medical Leave Act (“FMLA”).
Like the FMLA, the FLA provides 12 weeks of job-protected leave to employees who: (i) work for an employer who employs at least 50 workers within a 75-mile radius, (ii) work for 12 months for the employer, and (ii) work 1,250 hours in the prior 12 months. Unlike the FMLA, however, the FLA, permits employees to take family and medical leave to care for a domestic partner. Further, the FLA does not run concurrently with any period of pregnancy disability leave. As a result an employee may be eligible for a period of leave for her own serious health condition due to pregnancy disability (which is covered by the FMLA), and then may be entitled to an additional 12 weeks of bonding time under the FLA. When the FLA sunsets, this leave for bonding will be partially paid but not job-protected. Notably, PFML benefits for birthmothers can reach up to 18 weeks (though only in circumstances where there is a serious pregnancy-related health condition that results in incapacity).
PFML Premium Collection and Important Dates
Generally, all Washington employees will be covered under the PFML law. Federal employers, federally-recognized tribes, and self-employed workers are not covered by the program; however, such tribes and self-employed workers may opt-in to participate and receive benefits. To qualify for PFML, employees must have worked for 820 hours or more in the first four of the last five completed calendar quarters. Employees who are covered by a collective bargaining agreement (“CBA”) that was in existence on or before October 19, 2017 are not subject to the PFML, and will not pay premiums for the PFML, until the CBA is reopened, renegotiated, or expires. Employers whose leave programs are comparable to or exceed the requirements of the state’s law may opt-out of the state program, and instead offer a voluntary plan.
Implementation of the program is already in progress, as employers were to begin collecting PFML premiums on January 1, 2019. Both employers and employees are responsible for the PFML premiums. The employee and employer split the medical leave premium and employees shoulder the family leave premium. Employers typically use payroll deductions to collect premiums from employees. For 2019, employee premiums are 0.4% of an employee’s gross wages (the ESD’s premium calculator is a helpful tool for determining premium amounts). The ESD will reassess the employee premium each year, based upon guidelines set by the commissioner of the ESD. Employers can opt to cover some or all of their employees’ share of the premiums. Importantly, companies with fewer than 50 employees in the state of Washington are not required to remit the employer-portion of the premiums, but must remit their employees’ premiums and report certain information, including employee wages and hours, to the ESD.
Employers’ reporting and remitting of premiums for Quarters 1 and 2 are due between July 1 and July 31, 2019. Note that if an employer did not start collecting premiums from employees on January 1, 2019, there is no penalty imposed by the ESD and the employer can, with one pay period advance notice, begin withholding employee premiums at any time. Employers may not, however, retroactively withhold premiums from employees, and employers are responsible for paying any missed employee premiums on behalf of those employees for whom premiums weren’t collected.
As the July 2019 deadline for reporting and remitting of premiums quickly approaches, employers should consider whether they are eligible for a voluntary plan exemption. The ESD began accepting voluntary plan applications on May 6, 2019, and employers can apply for their exemptions here. Employers that do not qualify for a voluntary plan should assess whether all the necessary elements for implementing the state plan are in place, including systems for collecting premiums and reporting employee information.