Effective January 1, 2019, Washington employers must comply with Washington’s Paid Family and Medical Leave Program (“FMLP”). For the first year of this new law (2019), only premiums will be collected from employees and certain employers. Benefits will be available to employees starting January 1, 2020. This new law will entitle eligible employees to paid leave of up to 12 weeks per year for qualifying events, including their own serious health condition, to care for a family member with a serious health condition, to care for the birth, adoption, or foster placement of a child, or due to a qualifying military exigency. This paid leave can be extended up to 16 weeks per year for combined family and medical leave, and up to two additional weeks for certain pregnancy-related complications.

 

The following is a brief overview of the program. Here is an insert that can be shared with your employees explaining the program.

 

Who is eligible? All Washington-based employees who work 820 hours in a qualifying period are eligible, regardless of whether the employer is based in Washington or elsewhere. All hours worked for any covered employer are counted towards the 820-hour threshold. This means that if an employee works 500 hours for one employer and 320 hours for another employer during a qualifying period, the employee is eligible for benefits.

 

The FMLP does not cover self-employed individuals, federal employees, federally-recognized tribes, or temporary workers from outside Washington. However, self-employed individuals and federally-recognized tribes can choose to opt-into the FMLP. A self-employed individual can opt-in by making the election in writing before March 31, 2019. In doing so, the self-employed individual agrees to participate (contribute premiums) for three years. After the initial term, participation can be renewed annually.

 

Collecting Premiums. All employers must start collecting the employee’s share of the premiums starting January 1, 2019. The premiums must be collected for all employees, regardless of the number of hours worked for the employer. The premiums for the FMLP will be 0.4% of gross wages, which will be collected by the employer similar to the collection of unemployment premiums. The Employment Security Department (“ESD”) has created a premium calculator to assist employers. The employee is responsible for 63.33% of the premium. Employers with 50 or more employees will pay the remaining 36.67% of the premium. Employers with less than 50 employees are not required to pay the employer portion of the premium. An employer may elect to pay the employee’s portion of the premium rather than deducting the employee’s share from their paycheck. 

 

The premiums will be remitted to the state on a quarterly basis. An employer cannot retroactively collect the employee share of premiums. Self-employed individuals only contribute the employee portion of the premium. Out-of-state employers are required to collect and remit premiums on behalf of their Washington employees.

 

If a Washington-based employer has out-of-state employees, it must request a conditional waiver from collecting premiums from the out-of-state employees. If the out-of-state employee works more than 820 hours in Washington in a qualifying period, the waiver becomes void and the employer must retroactively pay the accrued premiums.

 

Whether an employer has 50 or more employees and therefore must contribute to premiums will be determined on an annual basis. For 2019, the employee count will be based on the employer’s initial reporting. Subsequently, ESD will calculate a business’s size on September 30 of each year. The 50-employee threshold is based on the average headcount over the prior year, not on FTEs. Out-of-state employees will be counted towards the threshold.

 

Reporting Requirements. The employer must report and remit premiums on a quarterly basis. The first reporting/premiums are due by April 30, 2019. Each quarter, the employer must report the following information: UBI, business name, the total premiums collected from employees and who prepared the report. For each employee, the employer must report the following information: SSN or ITIN, first name/last name/middle initial of each employee, the total wages paid and the associated hours.

 

Opting Out. Beginning January 1, 2020, all eligible Washington employees must have access to paid family and medical leave benefits. If an employer provides benefits that meet or exceed those provided under the state program (referred to as a ‘voluntary plan’), the employer may apply for an exemption from the state program.

 

Small Business Support. Starting in 2020, certain grants are available to help cover the cost of hiring temporary employees when benefits are used. Although the application process is still being formulated, grants of up to $3,000 per employee will be available and can be issued up to ten times per year to an individual employer. Employers who average 150 employees or fewer are eligible for these grants. An employer with fewer than 50 employees is only eligible if it also pays the employer portion of the premiums. In addition, employers may apply for a grant of $1,000 due to significant wage-related costs associated with an employee’s leave.

 

Although benefits are not available until 2020, employers should begin reviewing existing leave policies and handbook provisions to ensure they comply with the new program. If you have questions about implementing the FMLP, seeking waivers, or opting out, please contact Jeannette Adams Gorman or Jason Bergevin.

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This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorney-client relationship with our readers. If you would like more information regarding whether we may assist you in any particular matter, please contact one of our lawyers, using care not to provide us with any confidential information until we have notified you in writing that there are no conflicts of interest and that we have agreed to represent you on the specific matter that is the subject of your inquiry.