By Rik Jamieson
Starting in 2020, Washington will be the fifth state in the nation to offer paid family and medical leave benefits to workers. Because of this, beginning January 1st every employer in Washington will be required to report to the Employment Security Department (ESD) wages and hours worked for each employee. Details of how and when to report are still being finalized. There will be a premium cost of 0.4% of gross wages paid which is shared by the employee and the employer unless the employer chooses to pay the entire amount.
Please pass this notice on to the staff that process your payroll.
Stay tuned as we’re learning as fast as the state will teach the nuances about reporting the wages and hours worked and how to pay the premium. Below is a summary of what we do know. More information to come in November.
- There are no exemptions for churches or non-profits. Everyone is subject with very few exemptions.
- Reporting is required for any employee who is paid any amount of compensation – (so even temporary employees who work a few hours).
- Employers with less than 50 employees are not required to pay the employer portion.
- The 50 head count is determined by entity UBI (not Federal EIN) and it’s an average of 4 quarters data points.
- The total premium rate is 0.4% of gross wages ($25 a quarter for every annual $25,000 of gross wages).
- Premium is mostly funded by employee payroll deduction – up to about 63% – unless employer chooses to cover the employee cost. We do not have clarity yet on whether the deduction is treated as before or after tax.
- The tax paid in 2019 is based on the first payroll in January 2019 and the first reporting to the state of wages paid and hours worked is by April 20, 2019.
- The state has a website with information: paidleave.wa.gov We suggest your payroll processor signs up for the newsletter from the state to stay informed.
- This is totally distinct from the Washington’s Paid Sick Leave Law (which is employer funded) that went into play last year. The state will process any paid leave claims beginning in 2020 for eligible employees (those that have worked at least 820 hours in 2019).
Rik Jamieson serves as Assistant Treasurer for The Pacific Northwest Conference of The United Methodist Church.