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Governor Jay Inslee signed into law SB 5097, which, effective July 25, 2021, expands coverage under the state's paid family and medical insurance program by changing the definition of a covered family member.

Under prior law, a covered family member included a child, grandchild, grandparent, parent, sibling, or spouse of an employee. SB 5097 adds to the definition of a covered family member an individual who regularly resides in the employee's home or where the relationship creates an expectation that the employee care for the person, and that individual depends on the employee for care. The law clarifies that an individual is not covered merely because they reside in the employee's home, but rather, the individual regularly resides in the employee's home and there is an expectation that the employee care for the individual.

Background

Washington's paid family and medical leave (PFML) insurance is funded by premiums paid by employees and employers. For 2020 and 2021, the PFML premium 0.4% of each employee's gross wages, not including tips, up to the Social Security wage limit ($137,700 in 2020; $142,800 in 2021). (Washington Employment Security Department website.)

This premium is divided between the employer and employee as follows:

• Employee premium (mandatory for all employees): In 2020, 63.33% can be paid by the employee. Employers are required to either withhold this amount from each employee's paycheck or pay it on their employees' behalf. Employers then submit this portion of the premium to the state along with their quarterly reports.
• Employer premium (mandatory for businesses with 50+ employees): The employer's share is 36.67%. If a business has 50 or more employees, it must pay the employer share of the premium. This is determined each September and takes effect the following January for that full calendar year. If a business has fewer than 50 employees, the employer premium is optional. If a small business chooses to pay the employer share of the premium, it can receive additional benefits for its business.

All employers may either withhold employees' premiums from their paychecks or may pay all or a fraction of the premium on their employees' behalf. Employers cannot collect missed premiums in later pay periods.

Employers can provide additional benefits, also called "supplemental benefits," to their employees on top of the state's PFML benefits. For example, they can offer employees additional time off to bond with a new baby, additional pay to replace wages lost while they are on leave, or job protection for people whose jobs are not automatically protected under the law.

Ernst & Young LLP insights

Washington is one of a growing number of states that requires employer participation in a paid family and medical insurance program. For a list of participating states see our 2021 special report.

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