On Jan. 1, Washington state will begin implementing one of the most generous paid family and medical leave programs in the nation, allowing employees to take up to 16 weeks of paid time off to care for new children and deal with illnesses and injuries.
In a nutshell: The program functions like insurance and applies to all companies, though businesses with fewer than 50 employees don’t have to pay the employer portion of the premium. The premium is equal to 0.4 percent of wages, with employers and employees each paying a share starting Jan 1, 2019. One year later, the benefits kick in. Qualifying workers will be able to take up to 12 weeks of paid time off to care for new children, sick relatives, or to recover from an illness. They can take up to 16 weeks when family and medical leave are used in conjunction. They will receive weekly pay that equals up to 90 percent of their regular salary, with a minimum of $100 and a maximum of $1,000 per payment.
Many tech companies already offer comprehensive paid leave as a perk to compete for talent. GeekWire caught up with Suzi LeVine, commissioner of the Washington Employment Security Department and Carla Reyes, director of the Paid Family and Medical Leave program, to find out what the new policy means for those employers and for workers across the state.
“We’re just very excited about having this best-in-the nation program,” said Reyes, citing the “great opportunity that this presents to really drive home how Washington is a great place to work and to live.”
Paid Family and Medical Leave cheat sheet:
Employers will need to start collecting and paying premiums on Jan. 1 equal to 0.4 percent of each employee’s wages. Companies with fewer than 50 employees will only be required to pay 63 percent of that premium and can pass the cost on to their employees if they choose. Larger companies will have to pay the full premium, 63 percent of which can be passed on to employees and 37 percent of which comes from the employer itself.
In April they will begin the requisite reporting for the program, which requires tracking hours and wages of all employees, freelancers, and contractors. Companies with existing family and medical leave policies that are equal to or more generous than the state program can apply to continue operating their own plans.
Companies with headquarters outside of Washington will also be required to pay 0.4 percent of the wages they pay to employees who work in the state.
Employees could pay up to 63 percent of the Paid Family and Medical Leave Premium, depending whether their employer decides to cover some or all of their portion. For example, the total premium for an employee making $2,500 in one pay period would be $10. If the employer doesn’t cover the employee’s portion, then she would pay about 63 percent of that $10, amounting to $6.33 per paycheck.
To qualify for the program, employees have to show that they’ve worked 820 hours over four quarters. Those hours can be aggregated across several employers if, for example, a worker has a part-time job and drives for Lyft.
Employees eligible for the policy can take 12-16 weeks of paid leave to care for new children, sick relatives, and to recover from medical issues.
“Workers are eligible for up to 16 weeks of leave when family and medical leave are used in combination,” according to the paid leave website. “For example, an expecting mother could use 8 weeks of medical leave for bed rest. The mother could then use an additional 8 weeks of family leave after giving birth to care and bond with the new child.”
Each week, employees on leave receive a percentage of their gross wages up to $1,000.
Gig economy services: State officials are still working out whether companies that rely on heavily on contractors, like Uber and Postmates, will be required to pay a percentage of the wages those workers make. All workers providing gig economy services, who work the requisite number of hours and opt into the program, may be eligible for the benefit, regardless of whether or not the company pays. The state plans to review whether companies must cover those types of workers on a case-by-case basis.
Independent contractors, freelancers, and self-employed Washington residents aren’t required to pay premiums for the paid leave program but they can opt-in if they want to receive the benefits. To qualify, self-employed workers have to pay the employee portion of the premium and work 820 hours over four quarters.
Employees and employers can find out their premium amount using this calculator.
Editor’s note: This story has been updated to clarify the impact of the program on gig economy companies and small businesses.