Washington’s family, medical leave rates to drop slightly in 2024
(The Center Square) – Workers and larger employers in Washington will see slightly lower deductions in 2024 to fund the state’s Paid Family and Medical Leave program.
Beginning Jan. 1, the premium rate will drop to 0.74% from this year’s rate of 0.8%, the state Employment Security Department announced last week. In 2022, the rate was 0.6%. The percentage is based on an employee’s total gross wages excepting tips.
Businesses with 50 or more employees are required to pay 28.57% of the total premium while employees pay 71.43%. For a worker earning $50,000 next year, the annual premium will total about $264, or $22 a month.
Businesses with less than 50 workers are not required to contribute – although they can choose to do so – but they must still collect an employee’s share or pay it on the employee’s behalf to the state.
Almost every Washington employer – public or private – must participate, including non-profits, charities, and faith organizations, even if they have only one employee. There are exemptions for federal employees, federally recognized tribes, and self-employed individuals, although tribes and the self-employed may choose to opt in. There are also exemptions for employees based outside of Washington, or those employed within the state on a limited or temporary basis.
To date in 2023, more than 125,000 individuals in Washington have utilized leave benefits that collectively cost more than $1 billion, according to ESD.
While state officials and beneficiaries have touted the new programs, there has also been public criticism over what is essentially a payroll tax with a questionable long-term fiscal future should expenses outstrip revenues.
“Better than continuing to administer a costly program that decreases workers’ wages, of course, would be repealing the state’s Paid Family and Medical Leave,” Elizabeth Hovde, an analyst with the Washington Policy Center, a conservative think tank, wrote last week. “Workers should be able to choose which life needs they save for and how, rather than have the state tell them what to save for.”
Collected premiums are reported quarterly to the state, listing employee hours, wages, and exemption status. Employers can stop collecting premiums once employees reach the Social Security cap, which increases to $168,600 in 2024, but they must continue to report employee wages.
While wage withholding is combined for the Paid Leave and WA Cares programs, the two have separate funds and employers make a separate payment for each.
Employment Security recalculates the premium rate each October based on program usage and revenues collected the previous year. The agency will be sending letters to employers in early November notifying them of the pending rate change and updating its website by year’s end regarding 2024 rate calculations.
Employers were required to begin payroll withholding in 2019. Since 2020, employees in Washington who work at least 820 hours during a qualifying period – four consecutive reporting quarters – can access up to 12 weeks of paid family and medical leave. Depending on income, workers can receive between $100 and $1,427 per week.
Criteria includes caring for a child age 17 or younger following birth or placement, caring for themself or a family member with a serious health condition, or certain military-related events. Participants are expected to provide at least 30 days’ advance written notice to employers unless the reason for leave was not foreseen earlier.
Information for individuals, families, health care providers, employers, and self-employed persons is available at Employers – Washington State's Paid Family and Medical Leave. The site includes waivers, mandated notices and paycheck inserts, collective bargaining agreements, assistance grants for small businesses, and eligibility of part-time and seasonal employees.