Workers and businesses will start paying premiums for Washington state’s Paid Family and Medical Leave benefits next month. Workers who give birth to, foster or adopt a child, or who need time off to take care of themselves or someone else, will be able to reap the benefits beginning in January 2020.
Maia Knox, 29, a policy analyst with the city of Sammamish who lives in Issaquah, is surrounded in the region’s labor market by tech workers with gold-plated benefit plans that have long included paid family leave.
But now, with that benefit coming to employees across the state in a little over a year, Knox and her wife are optimistic it will help them afford time off work to bond with the child they’re planning to have while supporting their careers in municipal government.
“You kind of feel like you’re behind, and it’s just nice to feel like we’re catching up,” Knox said of the new benefit.
With the cost of infant day care in King County averaging as much as $1,499 a month and with no family in the area to help, Knox and her wife were confronting the reality of balancing parenthood and careers.
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“It’s really going to be us on our own trying to figure out how to take care of our child and pay for it,” Knox said.
They’ve decided to delay having a child until the new state benefit begins in 2020.
“I feel really grateful to be able to take advantage of this, and it’s coming at a time that makes sense for my family,” Knox said.
Washington state’s Paid Family and Medical Leave law, which the Legislature passed last year, allows workers to take 12 weeks off with pay when they welcome a child, or to take care of themselves or family members when illness strikes. In extreme cases, that benefit can be stretched to 16 or even 18 weeks.
Workers and employers will start paying for benefit next month with premiums that total 0.4 percent of wages. For example, an employee earning $80,000 a year would pay about $3.90 per week, while the employer would pay about $2.26. Workers will be able to take the benefits beginning in January 2020.
The federal Family and Medical Leave Act, passed in 1993, already protects jobs for 12 weeks without pay. Almost 90 percent of U.S. workers are covered by the federal benefit, but only 17 percent have access to paid family leave, according to the latest data from the U.S. Bureau of Labor Statistics.
California, New Jersey, New York and Rhode Island offer paid family leave. Massachusetts and the District of Columbia are beginning programs on a timeline similar to Washington’s.
Washington’s leave program is among the most generous in the nation, and supporters are optimistic it will increase worker security and help provide stability for employers.
Because state law requires that the program be funded before benefits kick in, the first year will be spent building up a fund held in a trust by the state treasury.
Bob Battles, the government affairs director at the Association of Washington Business (AWB), compares paying the premiums to buying car insurance.
“You don’t pay for that to use it the first day,” he said. “You’re anticipating you’re going to need it.”
The state is still working out the details on how benefits will be distributed. What they do know: After qualified workers become a parent, fall ill or need to care for another, they will submit a claim to the state. The Employment Security Department will review and approve each application — a process that might include some confirmation from medical professionals — and inform each beneficiary’s employer that they will be taking paid time off.
The state will then cut a check to the employee for an amount that ranges from $100 to $1,000 a week, depending on the worker’s usual wages. Someone making $80,000 annually would get the maximum of $1,000 per week. California’s benefit maxes out at $1,216 a week for six weeks. D.C.’s benefit, beginning in 2020, is $1,000 a week for up to eight weeks.
Paid leave advocates say the benefit offers employers greater stability and is not overly burdensome.
“It’s a benefit for the people who could take the leave, but it’s also a benefit for employers,” said Carla Reyes, director of paid family and medical leave for the state. “We’re hoping it will help people recover faster and return to work faster.”
Getting ready for business
It’s also relatively inexpensive for employers, said Battles of the AWB, which supports statewide business interests and was part of the negotiating team for rules surrounding the law. Overall, businesses foot about 37 percent of the bill and employees pay 63 percent.
The association’s biggest push now, he said, is making sure all state businesses understand they must start collecting employee premiums in January. All businesses also must begin reporting employee hours and wages in April so the state can track who is eligible for what level of benefits.
The program is actually going to save money for some businesses, including Seattle favorite Molly Moon’s Homemade Ice Cream Shop, said owner Molly Moon. The business — which has between 80 and 180 employees depending on the time of year — has for years offered 12 weeks of fully paid leave for employees who give birth to, foster or adopt a child, as well as a partially paid benefit for medical leave.
With the state program, which puts part of the cost on employees, Molly Moon’s will save money as it keeps offering the same benefits. Moon will continue to offer 100 percent paid leave for parents, and pay the difference between the state benefit and full pay.
She’s already done the calculation for the first year and figured that her total employer contributions for a full year will be less than what the company paid for 12 weeks of full pay when Moon’s assistant had a child.
The statewide program will increase equality for all employees, she said.
“It’s not about winning the boss lottery anymore, which is how it has been,” she said.
Many are also hopeful the paid family leave portion of the law will decrease the workplace stigma of taking time off to care for children — something that has disproportionately affected women. Women are more likely to take time away from a career to raise children, something that studies say has contributed to the wage gap between genders because women lose out on earning and advancement potential when they are away from the office. The paid leave might encourage more men to take the benefit.
Knox, the city of Sammamish employee, said the benefit will help her and her wife stay in their careers as they become parents, rather than having to drop out of the workforce to provide care.
“Paid family leave is important for women in my field to move up to be city managers and directors in local government,” she said.
Exceptions to the rule
The law applies to nearly every worker and business owner in the state, especially when it comes to tracking employee hours and wages, but some businesses won’t take part in the program.
Small businesses with fewer than 50 employees are not required to pay the employer portion of the premiums, though they may choose to pay part of their workers’ portions if they wish. Employees at small companies will still pay into the program, and can take advantage of the benefits.
The law also allows for some companies to opt out partially or completely from the program if they have their own paid-leave programs that are comparable or more generous. If they opt out, the employee doesn’t have to pay into the program.
Some larger companies, such as Microsoft, plan to excuse themselves in part from the program.
Microsoft will continue its own medical-leave program — which is more extensive than the state’s — but does plan to take part in the family-leave piece of the program.
The company will keep its benefits the same, which include up to 20 fully paid weeks of leave for birth mothers and 12 fully paid weeks of leave for other parents, and will pay the difference where the state benefits stop. But starting next month, employees will begin paying a bit for the family leave piece.
For a worker that makes $2,500 gross pay in one paycheck, that would be about $3.33.
Washington companies with multistate operations are faced with the choice of adhering to different benefit requirements of each state where they have employees, or providing the same benefits to everyone — which, in recent years, has meant providing Evergreen State-level benefits.
Microsoft expanded its benefits outside of Washington state earlier this year, when it required all vendors it works with to provide at least 12 weeks of paid parental leave to contract workers.
Other tech companies that have robust parental leave programs in place — such as Amazon, Google and Facebook — have not yet said if they plan to opt out of the state’s program.
Baby boom coming?
Knox said she knows of at least three other couples planning babies in 2020, in part because of the paid leave timing. A spokesperson for the state program also has heard chatter about would-be parents delaying in anticipation of the benefit.
“This is a huge policy and it’s going to impact so many people,” Knox said.
Perhaps Washington kindergartens will see a boom in enrollment in 2026.
Details of Washington state’s paid family and medical leave benefits
When can I get benefits?
People can start applying for and receiving benefits in January 2020.
When do I start paying?
Workers and businesses start paying via payroll deductions in January 2019. The year gap between premium payments and benefits is so the state can build up a benefit fund.
What can benefits be used for?
Family leave after a child is born or placed with a family, and to care for yourself or a family member because of a “serious health condition” or a medical event. Certain military events are also included, such as when a worker’s spouse is deployed on short notice or urgent child care is needed.
Who is eligible for benefits?
People who have worked 820 hours or more during the state’s qualifying period, which is within the last five calendar quarters. The state says, “The qualifying period is either: The first four of the last five completed calendar quarters; or the last four completed calendar quarters.”
What are the benefits?
The program will pay between $100 and $1,000 per week for up to 12 weeks. The rate of pay is calculated based on a worker’s usual wages. In certain cases, the paid leave period could stretch to 16 or 18 weeks if family and medical leave is taken at the same time.
How much do I pay?
The rate of pay for 2019 is 0.4 percent of gross wages. Employees pay 63.33 percent and employers pay 36.67 percent. If gross wages on a paycheck were $2,500, the employee would pay $6.33 and the employer would pay $3.67.
How many people does the state expect to use the benefit?
The state expects about 164,000 claims during a peak year for the program. It expects about two-thirds of those claims would be for medical leave and about a third would be related to family leave.
Correction: This story was originally published Dec. 12, 2018, and corrected Dec. 17, 2018. The earlier version of the Q&A gave the wrong percentage for employers’ share of the premium.