Last week, representatives of the business community and employee groups completed negotiations to create a paid family and medical leave insurance program in Washington. Many details need to be worked out, the actual legislation has not yet been drafted, and the Washington Legislature has a number of other issues demanding its attention. Nonetheless, there are substantial prospects that this compromise program will be enacted during this legislative session. If so, the Employment Security Department would begin collecting premiums in 2019, and benefits would become available in 2020.
As outlined in the current proposal, all employees would be enrolled in the program. Premiums would be shared between employers and employees. The proposed program distinguishes between disability leave and family leave. For disability leave, premiums would be split, with 55% paid by the employer and 45% paid by the employee. For family leave, premiums would be paid entirely by the employee. Because family leave premiums are estimated to be higher than premiums for disability leave, employers would end up bearing 37% of the cost of the program.
In order to qualify for benefits, an individual must have worked 820 hours in four of the last five calendar quarters. Benefits are in the form of partial wage replacement: 90% of an employee’s pay up to the state’s average weekly wage (“AWW”), and 50% of the employee’s pay for amounts above the AWW, to a maximum of $1,000 per week. No employee could be paid more than he or she earned while working. Covered employees would be entitled to up to 12 weeks of disability leave (plus an additional two weeks for pregnancy complications) and 12 weeks of family leave, but with an annual cap of up to 16 weeks (again, with an additional two weeks for pregnancy complications, for a maximum possible leave of 18 weeks).
The compromise proposal has provisions for job retention, generally tracking the federal Family and Medical Leave Act (“FMLA”). Generally, the types of conditions that would entitle employees to paid leave parallel the FMLA or the recently enacted Initiative 1433.
The compromise proposal also addresses the costs generated by temporary workers hired to cover employees on leave, and the resulting impact on an employer’s unemployment insurance rates. The compromise proposal also would preempt local governments from enacting additional paid family leave requirements. Finally, the proposal has a number of additional provisions that would lessen the burden on small businesses.
A great many details will be resolved as the compromise proposal goes through the legislative process. We will keep you updated as the proposal works its way through the Legislature. Of course, don’t hesitate to contact your Stoel Rives attorney with any questions.