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Paid Family Medical Leave coming to Washington

Paid sick leave and paid family medical leave are two recent, big developments in Washington employment law. (Read more about paid sick leave here ) On January 1, 2019, premium assessments will begin for the new Paid Family Medical Leave (PFML) system managed by Employment Security Department (ESD). The family leave portion will be funded by employees (via payroll deductions) unless an employer elects to pay some or all these premiums. The medical leave portion will be funded by employees and employers.

Benefits will be available to employees beginning on January 1, 2020. Employees may receive up to 12 weeks of PFML benefits annually for: bonding after the birth or placement of a child under 18; family member’s serious health condition; or certain military assignments. Employees also receive up to 12 weeks of paid medical leave benefits annually for their own serious health conditions. There are combined limits if an employee seeks leave under both categories. An employee must work a certain number of hours for covered employees during a qualifying period to be eligible.

ESD is still developing the Washington Administrative Codes (WACs) that will govern the system. Additional information about the leave program and how to participate in the rulemaking process can be found at https://esd.wa.gov/paid-family-medical-leave/rulemaking.

Keep reading below for more details about the new law.

 

Premiums

Premium assessment begins on January 1, 2019. The initial premium rate is 0.4 percent of wages. Employers can deduct from the employees’ wages 100 percent of the premiums due for the family leave and up to 45 percent of the premiums due for the medical leave. An employer may elect to pay all of the premiums. Employers with fewer than 50 employees are exempt from paying the employer share of premiums. If they elect to pay, they can qualify for some assistance when employees take leave (see Subsidy section below). Self-employed individuals can elect coverage. Employers can create their own PFML system (voluntary plan) with equivalent benefits and requirements.

 

Benefits

Benefits will be available beginning on January 1, 2020. Employees may receive up to 12 weeks of PFML benefits annually for: bonding after the birth or placement of a child under 18; family member’s serious health condition; or certain military assignments. Employees also may receive up to 12 weeks of paid medical leave benefits annually for their own serious health condition (an illness, injury, impairment, or physical or mental condition that involves certain level of care or continuing treatment, which includes things like hospitalizations, incapacity due to pregnancy, or treatment for substance abuse). If an employee experiences both scenarios, they can receive up to 16 weeks of combined benefits or 18 weeks if experiencing a serious health condition with a pregnancy that results in incapacity.

Employees are eligible for benefits after working at least 820 hours (20.5 weeks at 40 hours per week; 41 weeks at 20 hours per week) for covered employers during the qualifying period. The qualifying period is either the first four of the last five full calendar quarters or the last four full calendar quarters.

The benefits will be a percentage of the employee’s average weekly wage (AWW) during the two highest quarters in the qualifying period. The maximum weekly benefit is $1,000 (adjusted annually). The minimum weekly benefit is $100, or, if the AWW is less than $100, then the employee’s full wage.

 

Grants for smaller employers

There is a grant for employers with 150 or fewer employees and employers with 50 or fewer employees who are assessed all premiums (for three years from the date of receipt of the grant). The grant is for $3,000 if a temp worker is hired to replace an employee on family or medical leave for 7+ days. There is a separate grant for up to $1,000 as reimbursement for significant additional wage-related costs due to the leave. An employer cannot receive both, but can get the difference between them if the leave was extended and a temp worker then had to be hired. The employer is not eligible if it has an approved voluntary plan (i.e. its own separate PFML system).

 

Protection for employees

There is employment protection for employees who return to work (being restored post-leave to their position or an equivalent position; not losing benefits accrued pre-leave). Employers with fewer than 50 employees are exempt from providing these protections (“For the purposes of this subsection, an employer shall be considered to employ fifty or more employees if the employer employs fifty or more employees for each working day during each of twenty or more calendar workweeks in the current or preceding calendar year.” Substitute Senate Bill 5975, Sec. 31(6)(a)). A restored employee is not entitled to accrual of seniority or employment benefits during the period of leave. But the employer must maintain any existing health benefits for the employee on leave as if the employee continued to work; the employee remains responsible for any share they were required to cover.

It is unlawful to discriminate or retaliate against an employee who makes a claim or complaint or participates in an investigation under the PFML law.

 

What employers need to do now

            Follow ESD:  Employers should follow the updates posted by ESD and, if desired, participate in the rulemaking process to give their input regarding the drafted rules/WACs.

            Payroll & Premiums:  Employers should start preparing to begin payroll deductions and to begin paying their premiums to ESD in 2019. Speak with your payroll, bookkeeper, and/or accountant. And also work to notify employees of the coming changes including the new mandatory deductions to their pay.

            Unions/CBAs:  Employers working with unions should begin reviewing collective bargaining agreements to identify provisions that will need to be updated during the next negotiation process. The law does not apply to CBAs in effect before October 19, 2017, unless and until the agreements expire, are reopened, or are renegotiated. (Proposed WAC 192-500-400 as of 3/26/2018). The “in effect before” date may change, but the bill creating the law was clear that current CBAs would not be disturbed.

            Policies:  Employers should starting preparing now to update (or create) personnel policies to incorporate the new law (and any new rules from ESD which should be completed this year). Certain actions can only be taken if there is a written policy in place. E.g.:  An employer needs a written substance abuse policy, applied in a nondiscriminatory manner, to discharge someone for substance abuse if they are on PFML for their own substance abuse treatment. An employer needs a uniformly applied practice or written policy (preferably) if you want an employee’s health care provider to provide certification that the employee is able to resume work post leave. An employer needs a written policy (or CBA provision) if they want employees on leave to be ineligible for employer contributions toward medical or dental benefits during the PFML leave period (employees can still pay their own premiums to retain the benefits). It is possible that the rules/WACs created may have additional written policy requirements.

Voluntary Plan:  Employers who may want to create their own alternative PFML system should follow the updates by ESD and possibly contact ESD directly for guidance. ESD has already drafted proposed rules to govern voluntary plans and the application process:  https://esd.wa.gov/paid-family-medical-leave/rulemaking.

 

–       Lisa Keeler

 

This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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