On July 5, Gov. Inslee signed into law (SSB 5975) a historic paid family and medical leave insurance program to provide employees with a portion of their wages when they need to be away from work to care for a new baby or a sick family member.
The new law creates a new benefit account, which will be administered by the state Employment Security Department (ESD) and funded by both employer and employee contributions.
Basically, the state with set up two separate funds, one for paid family leave, which will be 100 percent funded by employee contributions. The second fund will be for paid medical/disability leave, which will be funded 55 percent by employer contributions and 45 percent by employee contributions.
Currently, the total estimated cost of the program ranges from .3 percent to .5 percent of payroll. Beginning Jan. 1, 2019, the initial premium rate of 0.4 percent of wages will be assessed and collected by the Department of Labor and Industries (L&I).
To be eligible for a paid family or medical leave benefit, an employee must work at least 820 hours in the four of the last five calendar quarters immediately preceding the application for a benefit payment. Generally, this equates to an employee working full time for approximately five months; or part time for at least an average of 15 hours/week for a year.
Employers with fewer than 50 employees are exempt from making these premium payments; however, their employees will still have to pay into the fund. Smaller employers with fewer than 50 employees can voluntarily opt-in and there are some incentives for businesses to do so. Independent contractors and self employed individuals may also opt in.
All employers, large and small, whether opted in or not, will receive some protection from unemployment insurance charges if the employer hires a temporary employee to fill in for the employee on family or medical leave.
Employers who already provide comparable or better benefits may seek a waiver if the employer wants to continue with their own plan.
Employees will be eligible to start applying for family and medical leave insurance benefit payments beginning January 1, 2020.
Eligible employees may take up to and access paid insurance leave benefits for up to 12 weeks of family leave or 12 weeks for personal medical or disability leave; capped at a total of 16 weeks per 12 month period. An employee who experience a disability related to a pregnancy is eligible to take and access up to 14 weeks disability leave benefits.
While all qualified employees are eligible to take leave and receive the insurance benefits, employers do not have to provide any other benefits. For example, for an employer with less than 50 employees, the employer does not need to continue any health care benefits available to the employee or reinstate the employee at the end of the employee’s leave period.
Employees with accrued paid vacation/sick leave/PTO plans can chose to take that paid time off and also receive the family or medical leave benefit payment.
Family leave time off and insurance benefit payments will be available for a medically certified qualifying event demonstrating the employee is needed to provide care (physical or psychological) for a family member (spouse, child, parent, parent-in-law, sibling, grandparent, or grandchild) with a serious health condition or due to a military exigency.
On the other hand, medical leave benefits (time off and insurance payments) are available for an employee’s own serious health condition or disability, including recovery from child birth or pregnancy related complications.
Serious health condition is a defined term, which is broader than the same term under the federal Family and Medical Leave Act (FMLA).
Benefits will be calculated based on a percentage of an employee’s wages and the state’s weekly average wage, although the weekly amount will initially be capped at $1,000 a week. Employees who make less than the state average can qualify for up to 90 percent of their wages.
The new law provides a process for eligible employees to apply for family and medical leave benefit payments, along with a process for employers to contest an employee’s application.
While the implementation of this law will not start until January 2020, employers and employees alike will be contributing to the new benefit fund beginning in January 2019.
Employers with collective bargaining agreements will not need to comply until the CBA is reopened, renegotiated or expires.
The passage of this law means Washington state now offers the most generous paid family and medical leave benefit in the nation. SSB 5975 is over 70 pages and the above only reflects a summary of some of the bill’s highlights. Employers should check with their legal counsel or Human Resource personnel for more specific information or advice.
Many thanks to Gary Chandler, vice president for government affairs, Association of Washington Business, for permission to excerpt from his materials prepared for the Wenatchee Valley Chamber of Commerce July Coffee and Commerce briefing.
Gil Sparks is Of Counsel with the law firm of Ogden Murphy Wallace and has been practicing management side employment and labor for over 29 years. While this article should not be considered legal advice, if you need legal advice, Gil can be reached at either firstname.lastname@example.org or 662-1954.