New taxes for paid family and medical leave are set to begin on Jan. 1, 2019

Washington is gearing up to collect new taxes to fund the paid family and medical leave program approved last year by the state Legislature.

Though benefits won’t begin until 2020, the state will start collection on both employees and employers starting on Jan. 1, 2019. That’s coming up fast, so we’ve been urging our AGC members to stay informed on how this program works and what they can expect as implementation rolls on.

You can find a good deal of information online through the Employment Security Department, which has added to its website a number of pages describing the insurance program in more detail.

The plan does come with new tax and reporting requirements for employers. Here are a few basic items you should know:

• Employers will need to report employee wages, hours worked, and additional information every quarter.
• Premiums are 0.4% of gross wages paid, and the employer portion will be about 37% of the premium. Employers may withhold up to the remaining 63% of the premium from employee wages if they choose. For employees, if your annual salary is $50,000, you will pay about $2.40 per week.
• Workers can take leave for qualified events for up to 12 weeks generally and up to 18 weeks under exceptional circumstances.

• Businesses with fewer than 50 employees don’t have to pay the employer portion of the premium but are required to collect and remit the employee portion of the premium and abide by all reporting requirements.

Again, that’s just a basic list of what you can expect to see from this program. There are different stipulations depending on the size of a business and other factors, so you’ll want to check the ESD website (and maybe this handy infographic) to see how things will fall to you. Employees should also get caught up on the plan to learn about their benefits and the requirements that apply to them.

The New Year will be here before you know it — now’s the time to prepare your organization for these new developments.