As we go through the budgeting process for 2019, we are working with our clients to assess the impact of the Paid Family and Medical Leave (“PFML”) program in WA. Companies will be impacted as soon as January 1, 2019. Washington State is implementing a statewide insurance program funded by premiums paid by both employees and employers, administered by the Washington State Employment Security Department.
The program will allow workers to take up to 12 weeks, as needed for medical events. An employee will become eligible to participate in the program once they have worked at least 820 hours for a Washington-based employer in the qualifying period.
The initial required premium will consist of 0.4% of an employee’s gross wages. Large employers (over 50 employees) will be responsible for paying 37% of the premium, while employees will be responsible for the remaining 63%. They may choose to either withhold the employee portion from employee paychecks, or pay the entire premium for their employees. Employers who want to internally manage a PFML plan for their employees will need to apply for a voluntary plan and have it approved by ESD. The premium payments will have to be paid to ESD on a quarterly basis starting April 2019.
Businesses with fewer than 50 employees are not required to pay the employer portion of the premium, but are required to remit employee-paid premiums to ESD and abide by all reporting requirements. Small businesses can opt in to pay the employer portion which is 37% of the premiums.
Timeline:
January 1, 2019 – Employers must start withholding PFML premiums from employee paychecks
April 1, 2019 – Employers must begin reporting wages, hours, and additional information to the ESD on a quarterly basis
January 1, 2020 – Eligible workers start receiving PFML benefits