This document provides an overview of Washington State's new Paid Family and Medical Leave Act, which creates a state-run insurance program for paid family and medical leave. Key points include: the program will be funded by payroll deductions from both employers and employees starting in 2019, with benefits available in 2020; it provides up to 12 weeks paid leave for family care and 12-18 weeks for medical leave depending on circumstances; employers with under 50 employees do not have to pay the employer premium share. The document also discusses eligibility requirements, qualifying reasons for leave, notice requirements, job protection provisions, and enforcement.

1. ©2018 Jackson Lewis P.C.
Washington State
Paid Family & Medical Leave
Michael Griffin
Jackson Lewis P.C. | Seattle
Michael.Griffin@JacksonLewis.com | 206-626-6416

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6. Introduction to
Washington’s Paid
Family & Medical
Leave Act

7. Paid Family & Medical Leave Act
 Insurance program that provides income replacement to
eligible workers for family caregiving and medical leave to care
for self or family member
 Types of Family Care Leave can include:
− Parental leave (care for newborn or newly adopted)
− Leave to care for a family member’s serious health condition
− Maternity Leave
− Military exigency
 Types of Medical Leave can include:
− For an employee’s own serious health condition
− Serious health condition of a covered family member
What is it?

8. Overview
 WA joins a handful of other states (CA,
NJ, RI, and NY) to have enacted paid
family leave laws
 The new law creates an insurance
program to cover paid leave, funded by
payroll tax on employer and employee
 Payroll deductions will begin on
January 1, 2019
 Benefits will be available to employees
on January 1, 2020

9. Purpose of WA PFML
Medical & Family Emergencies

10. Which Employers?
 All private employers doing
business in Washington
 Except tribes (may opt in)
 Self-employed (may opt in)
 All public employers doing
business in Washington
− Except the federal government
 Voluntary Plans (opt out)
− ESD will review voluntary plan; $250
fee to review
− Must be at least as generous as state
plan
− Some differences are allowed (e.g. job
restoration standard is lower for
employee under a voluntary plan)

11. Small Business Assistance
 Employers with fewer than 50
employees in state need not
pay the employer share of
premiums
 Employers with 150 or fewer
employees in state may apply
for grants to offset wage costs
while the employee is on leave

12.  Small employers (< 150) may receive a
grant of $3,000 if they hire a temporary
worker to replace an employee on leave
for a week or more
 Small employers (< 150) may receive a
grant of up to $1,000 as reimbursement
for significant additional wage costs (like
overtime or training) due to an
employee’s leave
Small Business Assistance

13. Which Employees?
 An employee is eligible if he or she worked
at least 820 hours during a “qualifying
period”
 Much shorter than the 1250 hours needed
to qualify under FMLA and WFLA
 And portable
 Exclusions
 Employees of tribes (unless opt in)
 Employees of federal govt.
 Self-employed (unless opt in)
 Workers temporarily working in WA not expected to
reach 820 hours in qualifying period

14. Qualifying Period?
Under the new law, a “qualifying period” is
The first 4 out of the last 5 completed calendar quarters
OR
The last 4 competed quarters immediately before the employee applies for leave
YES YES YES YES NO
YES YES YES YES

15. Any Exceptions?
 Employers may request a waiver of
the premium requirement for
employees who are:
− physically based outside of
Washington,
− employed in Washington on a limited
or temporary work schedule, AND
− not expected to work in state for at
least 820 hours during “qualifying
period.”
 This law doesn’t apply to
employees covered by a CBA on or
before 10/19/2017 UNTIL the CBA
expires, reopens or is renegotiated
− ER must notify ESD if that happens

16. How much paid leave?
12 weeks of paid family leave
12

17. 12 weeks of paid medical leave
12
How much paid leave?

18. 14 weeks of paid medical leave if the employee
experiences a pregnancy-related serious health condition
that results in incapacity
12 + 2 = 14
How much paid leave?

19. 16 weeks of combined paid family and medical leave
16
How much paid leave?

20. 18 weeks of combined paid family and medical leave if
the employee experiences a pregnancy-related serious
health condition that results in incapacity
16 + 2 = 18
How much paid leave?

21. • This leave is on top of any other leave
for sickness or temporary disability
because of pregnancy or childbirth
• e.g. State & local paid sick and safe leave
laws
• Leave is concurrent with FMLA and
WFLA
• Interaction with STD
• Not addressed by regulations
• Presumably, both available to employee
• Greater compensation continuation
How much paid leave?

22.  Relatively lower paid workers will receive
90% of their wages while on leave
 Relatively higher paid workers will receive a
sliding scale percentage of their wages
 $1,000 is the maximum weekly benefit for
2020
 After that, the maximum weekly benefit
changes yearly depending on the state’s
average weekly wage
 $100 is the minimum, or the employee’s
actual weekly wage
How much pay for the employee on leave?

23.  Medical Leave
− An employee’s own serious
health condition
 Family Leave
− Care for family member’s
serious health condition (child,
grandchild, grandparent,
parent, in law, sibling, spouse)
− Bonding after birth or
placement of child during the
first 12 months, or
− Qualifying military exigency
under FMLA, like when a
spouse leaves for military
active duty.
What can trigger this leave?

24.  See FMLA
 The following does not count:
− Routine physical, eye, or dental exams
− Non Continuing treatment of over-the-
counter medications
− Cosmetic treatments like acne or
plastic surgery
− Cold, flu, ear aches, upset stomach,
minor ulcers, headaches (except for
migraines), routine dental or
orthodontia problems, or periodontal
disease
“Serious health condition”?

25. How much notice do we get that an
employee is going out on leave?
Foreseeable birth or placement =
30 days’ notice
Foreseeable serious health condition =
30 days’ notice
Plus reasonable effort to schedule treatment to
avoid undue disruption to operations

26.  Employees must file an application for
benefits from ESD
 Benefits start
− 7 days after the employee applies for most
leave
− Immediately at the birth or placement of a
child
 ESD will let the employer know within 5
days after an employee files an
application
 An employer can review records of
application
 The department can inspect and audit
employer files and records related to
family and medical leave program
What is the application process?

27. When is an employee disqualified
from paid leave?
 Fraud (e.g. faking an injury/illness, lying)

28.  Willful intention to get sick or injured
 Gets sick or injured through an illegal act
 When employee is out on suspension
 Knowing or willfully false statements
 Knowingly or willfully withholding material
information in order to get the leave
− Disqualified for 26 weeks the first time, plus penalty
for overpaid benefits
− 52 weeks the second time, plus penalty
− 104 weeks the third and subsequent times, plus
penalty
When is an employee disqualified
from paid leave?

29.  Expiration of Leave Entitlement
− For birth or placement of a child:
- 12 months after birth or placement
− For a Serious Health Condition:
- 12 months after the employee
applied for benefits (for self or
family member)
When is an employee disqualified
from paid leave?

30.  Funded by payroll deductions
 The total premium starts at 0.4% of an
employee’s wages, shared between
the employer and employee
 The employer may deduct from wages
100% of the family premium and 45%
of the disability/medical premium
 The employer must pay at least 55% of
the disability/medical premium (some
employers may not have to pay, based
on their size )
 The employer may subsidize the
employee’s share of these premiums
How is this funded?

31.  The employer must collect premiums
from employees through payroll
deductions and remit to the state
 6 years of record keeping
 ESD will determine the size of the
employer each year to see if it
qualifies for grants or if the employer
need not pay employer premiums
How is this funded?
Size: will count only in-state employees
Size for New Employers: ESD will
calculate size after the 2nd quarter of
reporting over the quarters for which
reporting exists. This size
determination remains in effect until
the following September 30th

32. When will premiums be collected by ESD?
 Transferred quarterly by employer/bank
 Includes premiums owed on all wages
subject to premiums during that calendar
quarter
 Payments = last day of the month following
the end of the calendar quarter for which
premiums are being paid
 Payments by mail are considered paid on
the postmarked date
 Premiums not paid timely are delinquent
and subject to interest of 1% per month

33. Notice obligations for employers
 Poster: to be created by ESD
 The employer must notify the
employee with a written statement of
his or her rights:
− within 5 business days after the
7th consecutive day of an absence
due to family or medical leave, or
− within 5 business days after the
employer has received notice that
the employee’s absence is due to
family or medical leave,
− whichever is later.

34. What job protection is there?
 Basically = FMLA protections
 Restoration to same or
equivalent job if:
− Work for an employer with
50+ employees
− Have worked for 12 months &
1250 hours in previous 12
months

35. Violations & Remedies
 Interference
− Denial of rights
− No intent required
 Retaliation
− For exercising rights
− Opposing unlawful practices
− Participating in investigation
 Damages
− Wages
− Other economic loss (medical bills)
− Double damages for willful violation
− “Bona fide dispute” defense

36.  What is the process for filing a claim?
 Pros and Cons of a voluntary plan?
 How does the PFMLA interact with federal and
state family and medical leave acts?
 What if an employer already has a paid leave
plan (like STD)?
 What does “localized in WA mean”?
 Are temporary waivers for out-of-state workers
available?
 What about unionized employees/CBA issues?
 Private right of action?
 Cap on premium deduction?
 How to show amounts deducted on pay check?
FAQs

37. 37
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41. WA State PFML
Audra Smith – Regional Sales Manager
Suzanne Pitone-Director of Sales
.

42. “Sample Actuarial Cost”
 Rate = 4/10 of 1% of the individual’s wages
 1/3 of premium goes to family leave; 2/3 goes to medical leave
 <50 lives: Employee funds the cost.
 50+ employees: Employee/Employer split medical leave cost 45%/55%

43. “Sample Actuarial Cost”
• Employees can’t be charged more than state’s rate, but Employer
can pay more if they choose
• Average cost based on state rate = $235 Per Employee Per Year,
PEPY (family and medical leave)
• $78 PEPY dedicated to family leave
• $157 PEPY dedicated to medical leave
• Average cost of Principal’s STD benefit = $258 PEPY*
• Payroll deductions begin 1/1/2019
• Employer Dilemma? – Continue Current STD plan during the
2019 prefunding period?

44. Employer Options for Meeting
Statutory Requirements
• Employers will default into the state-run program unless they opt-
out with a “voluntary plan”
• Voluntary plan must provide benefits at least as rich as what’s
outlined in the law. Must be reviewed/approved by the state. $250
fee per application.
• Voluntary plan rules designed for self-funded. No language
addressing insured plans.
• Voluntary plans must be submitted to the state beginning August
2018
• State is hoping to review and approve/deny voluntary applications
by January 1, 2019
• Employers can choose to opt-out of the state fund for the medical
leave and/or family leave

45. Selling & Administering PFML
 Its likely a small employer would pay more for an insured product providing
same benefits required in the law. Not cost effective.
 Once an employer is in the state-run program, unlikely they will come out.
 State requires review whenever an employer moves carriers. $250 per review.
 Employers electing a voluntary plan with a carrier will be required to have the
plan approved every year for the first three years.
 State must review/approve any amendments to the plan.
 Eligibility based on employment in WA state, not group situs
 Once a claim is approved, the duration is limited to 12 weeks of benefit within 52
consecutive calendar weeks. After 52 weeks, the benefit duration is reset to 12
weeks.

46. Recommendation & Solutions
 Principal will not enter WA PFLM market and will sell STD as supplemental coverage
only
 Advocate for small employers to enter state run program when state plan provides
adequate income protection
 Educate groups in need of income protection above state benefits

48. .