Washington State Paid Family and Medical Leave
Washington Passes A Paid Family and Medical Leave Bill
The Washington state legislature passed a paid family and medical leave bill that governor Inslee signed on July 5, 2017. This makes Washington the fifth state to pass a paid family and medical leave law after California, New Jersey, Rhode Island, and New York. In this blog post we’ll discuss how Washington paid leave will work, how it is funded, and how the state plans to help small businesses cope with the impact of the new law.
Paid Family and Medical Leave
Paid family leave can be used by employees who are mothers or fathers after the birth or adoption of a child, or can be used by any eligible employee to take care of a family member who has a serious health condition.
To qualify for leave to take care of a family member, the family member must be a child, spouse, domestic partner, parent, parent-in-law, sibling, grandparent, or grandchild. Family leave can also be used to take care of a family member injured during military service or in exigent circumstances due to military deployment.
In addition, an employee can receive up to 12 weeks of paid medical leave for his or her own serious health condition, with the total of both paid family or paid medical leave capped at 16 weeks.
To be eligible for paid family or medical leave, the employee must have worked at least 820 hours over the first of the last five completed calendar quarters. However, if the employee doesn’t meet the hour requirement over that time period, the employee can qualify for leave if he or she has worked 820 hours over the last four completed calendar quarters.
An employee on paid family or medical leave will not receive their normal wages, but instead will receive a weekly benefit that is a percentage of their normal pay.
The weekly pay will be based on the state average weekly pay. Currently, the state average is about $1082. If an employee on leave earns half of the state average or less, the employee will receive 90% of their normal pay per week during paid family or medical leave. If an employee makes more than half of the average state worker’s weekly pay, the employee will receive 90% of his or her pay up to 50% of the average, plus 50% of any pay he or she makes above the average, but only up to a cap of $1000. The maximum cap will be adjusted to 90% of the state worker’s weekly pay every year starting on January 1, 2021.
Based on the Economic Opportunity Institute’s examples, an employee making about $28,000 a year will receive a weekly benefit of $486 (90% of pay); for a person making $54,000 a year, he or she will receive a weekly benefit of $736 (71% of pay); and for a person making $83,000 per year, he or she will receive a weekly benefit of $1,000 (63% of pay).
Funding the Paid Family and Medical Leave Benefits
Employers will not pay the employee directly for paid family and medical leave under the new law. Instead, the benefit will be funded by a new tax imposed on employers and employees, and the benefit will be administered largely like unemployment insurance.
Employers and employees will have to start paying premiums to fund the benefit starting in 2019, and for that year the tax comes out to .4% of the employee’s pay. The employer must pay for 37% of the total premiums, but employers can elect to pay the employee’s entire portion of the premiums. Employers with fewer than 50 employees in the state will not be required to pay the employer premiums, however, their employees will still be eligible for benefits.
The Seattle Times reports that the employee will pay a tax of $2.42 per week, while the employer will pay $1.42 per week, for someone who is making $50,000 a year. In this example, the employee would receive a benefit of $703 per week while on leave.
Small Business Assistance with Paid Family and Medical Leave
To assist small businesses who are stressed by the impact of employees who are on leave, the state will provide those employers with 150 employees or less (but not employers who have 50 employees or less and decide not to pay the employer premiums) access to grants to help offset the costs. An employer can apply for a grant up to $1,000 to offset wage costs or a $3,000 grant to hire a temporary worker to replace an employee who is on leave for at least seven days–but not both. If an employer initially receives the $1,000 grant and the employee extends his or her leave, the employer can apply for the difference between the $3,000 grant and the initial $1,000 grant that it received if the employer hires a temp worker. An employer can apply for a grant up to 10 times per calendar year.
If you’d like to learn more about how the new Washington state paid family and medical leave law will affect your business, please contact us.