Washington Paid Family and Medical Leave and Washington Cares Long-Term Care Insurance
Washington Paid Family and Medical Leave
Beginning in 2020, the state of Washington will begin to offer a statewide paid family and medical leave benefits to workers. This program will be funded both by employees and employers. Premium assessments begin January 1, 2019, and benefits can start January 1, 2020. Most employers are required to participate in this insurance program. Employers can choose to use an employer-operated voluntary plan or the state plan. Patriot will collect and remit this tax for Full Service Payroll customers.
For more information, see Washington State Employment Security Department’s website Washington Paid Family and Medical Leave.
Setting Up Washington Paid Family and Medical Leave Taxes in Patriot Software
Here’s what you need to know:
- Employers must collect and remit premiums starting in 2019.
- You have the choice of using the state insurance plan, or a voluntary plan that offers the same or greater leave benefits as the state plan.
- The total premium for the state plan for 2022 is 0.6%, shared by the employers with over 50 employees (26.78%) and employee rate of (73.22%).
- An employer can elect to pay the employee’s share of the premium.
- Employers with fewer than 50 employees working in Washington are not required to pay the employer portion of the premium.
- Premiums must be remitted quarterly during the month following each completed calendar quarter.
- Premium withholdings are capped up to the 2022 Social Security cap ($147,000).
- Tips are not included in gross wages.
As an example, an employee’s gross wages are $1000.
The total premium would be 0.6%, which is $6.00
The employer’s 26.78% share would be $1.61 (26.78% of $6).
The employee’s 73.22% share would be $4.39 (63.33% of $6).
As a new Patriot customer, you will need to answer a few questions in the payroll wizard. Existing customers can find these questions under Settings > Payroll Settings > WA Paid Family and Medical Leave.
Do you have fewer than 50 employees working in Washington? If you have fewer than 50 employees, employers are not required to contribute the employer portion of the premium but may opt-in to become eligible for Small Business Assistance. You will still be required to collect and remit the employee’s share of premiums and meet reporting requirements. If you have 50 or more employees, you are required to contribute both the employer and employee share of the premium.
Do you want to pay a portion of your employees’ premium?
The employer can choose to pay more than their 26.78% share by paying some or all of the employee’s 73.22% contribution. You can change the employer contribution percent up to 100%, as long as the employer + employee = 100% of the 0.6% of wages.
As a recap, here are your options depending on your company size for the state insurance plan.
|Company Size||Employer Share||Employee Share|
|If Less Than 50 Employees in Washington||Not required to pay the employer share of 26.78%, but can opt-in and get small business assistance||Required to withhold and collect employee share of 73.22%|
|If 50+ Employees in Washington||Required to pay the employer share of 26.78%, can choose to pay more than this to cover employee share||Required to withhold and collect employee share of 73.22%|
You will need to report your employees’ hours, wages, and premiums collected for the quarter directly to the state. For details, see the Washington Paid Family and Medical Leave Reporting page.
You can find this information on your Payroll Details Report.
- Go to Reports > Payroll Reports > Payroll Details Report.
- Change the Start Date and End Date to the appropriate quarter start and end dates that you are reporting.
- Make sure all employees are selected.
- Make sure all sources are selected.
- Change the “Group By” to Employee, and click “Run Report.”
The report will show a summary of total hours and gross pay for each employee for the quarter.
You will also need to enter the total amount of employee premium you have collected from all employees. Change the “Group By” filter to Totals, and click “Run Report” again. The “Washington Paid Family Leave (FLI) – Employee” total will appear under the “Employee Taxes” section. The state will use this to calculate and bill you for your employer share if any.
If you are a larger employer and want to upload a file instead of manually entering, you can click “Download Spreadsheet” after you run the report to download a .csv file. From here, you can change the columns as needed.
Marking Exempt from Washington Family Leave Insurance
If you are using the state insurance plan, nearly all employers are required to participate and are not exempt from Washington FLI. Exceptions are listed on the Washington Paid Family and Medical Leave website. You can mark your business exempt from the state plan under the Company Tax Exemptions page in the wizard. If you have completed the wizard, you will not be able to mark your company exempt, but you can change the answer to the questions at Settings > Tax Exemptions > State Exemptions > Washington > Employer FLI.
Individual Employee Exemption
If an employee works primarily in Washington, even if they sometimes travel out of state, they are covered by Washington FLI. An employee is not required to be covered if they are working in Washington for a short period of time. To mark an employee exempt, go to Payroll > Employee List > Select Employee Name > Advanced Tax Settings > Add FLI Exemption Status and change to “Exempt.” This will prevent the employee and corresponding employer share of tax from calculating for this particular employee.
Washington Cares Long-term Care Insurance
In December, Governor Inslee has announced a pause in the implementation of the Long-Term Services and Supports Act to give the state legislature time to refine the law. The announcement stops short of directing employers not to withhold the taxes from their employees’ paychecks beginning on January 1.
As of January 1, 2022, Patriot will calculate the Washington Cares Long-term Care Insurance tax from employee paychecks, but will not collect the tax from Full Service customers until more guidance comes from the state legislature. If it is directed that taxes should be remitted to the state at the end of the quarter, a tax collection will be scheduled at that time. If no taxes are to be deposited to the state for Q1, employers will need to reimburse employees the amount of the taxes withheld from paychecks. We will be updating Washington employers as more guidance from the state is released.
**Stay tuned for changes to the Washington CARES tax!
Starting in 2022, you need to make an additional deduction from Washington workers’ paychecks for the Washington Cares Fund. The Washington Cares Fund is entirely employee-funded. And, most employees must contribute to it. Under the new law, Washington workers will pay up to $0.58 per $100 of earnings (or 0.0058 X 100). Patriot calculates the Washington Long-term insurance tax and collects, deposits, and files the tax to the Employment Security Department for Full Service Customers.
The Washington Cares tax will automatically calculate for companies with employees in Washington. There aren’t any additional settings you need to select unless the employee has requested to be exempt from the state.
Individuals currently in the workforce can apply for exemption from the Washington Cares Fund program between October 1, 2021, and December 31, 2022. Once an employee requests an exception, they are not eligible to receive Washington Cares benefits and cannot rejoin the program at a later date.
Marking Employee Exempt for Long-term Care Insurance
If an employee is granted exception status from the state, go to Payroll > Employee list> select the employee name > Advanced tax settings. Scroll down the page to the Long-Term Care Insurance. Click the Add Long-Term Care Insurance Exemption Status button. Select the date the exemption begins and click Save.