Legal Alert – Washington State Passes Paid Family Medical Leave Law

Governor Jay Inslee signed the Washington State Paid Family Medical Leave Act into law on July 5, 2017. With this momentous bill, Washington joins four other states with paid family medical leave: California, New Jersey, Rhode Island, and New York.

The WA law will take effect in two stages:

First, employers and employees will begin sharing the cost of paying 0.4% of wages into a fund through a payroll tax starting Jan 1, 2019, with employees paying 63% and employers paying 37% of the payroll tax. Self-employed individuals who elect coverage under the new law will pay only the employee share of the premiums. Employers with 50 or fewer employees are exempt from paying the employer share of the premiums and may voluntarily opt into the program. Employers with fewer than 150 employees are entitled to request grants to offset some of the costs associated with hiring temporary employees, or increasing other employees’ hours, to cover for employees on leave. Employers that already offer such programs can opt out, if they provide a benefit equivalent to the state program. An employee who earns $50,000/year, would pay $2.42/week into the fund, while the employer would pay $1.42/week into the fund.

Second, effective Jan 1, 2020, eligible employees will have access to paid family leave benefits administered by a private company with oversight from the WA Employment Securities Department. To qualify for benefits, an employee must have worked 820 hours in 4 of the last 5 calendar quarters. Covered employees are entitled to up to 12 weeks of paid time off to care for a new child or an ailing family member. That leave is capped at 16 weeks if the employee needs both types of time off in a one-year period. Women who experience pregnancy complications may receive an additional 2 weeks of leave. The leave bank is portable from job to job. Weekly benefits are calculated based on a percentage of the employee’s wages and the state’s weekly average wage, capped at $1,000/week or 90% of income. The employee earning $50,000/year in the example above would have a weekly benefit of $703.

Importantly, the WA state law prohibits cities from enacting their own paid family leave ordinances. Regulations that interpret the law will be forthcoming. TRUEbenefits will monitor the information closely and share updates as they are released.

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