Paid Family Medical Leave Kent Chamber of Commerce

Paid Family & Medical Leave Kent Chamber of Commerce May 24, 2018 1

Presentation Overview Introductions Paid Family and Medical Leave Timeline What is Paid Family and Medical Leave? Key Details Rulemaking Overview Product & Communications Overview Discussion: How can we help?

The Path to Paid Family & Medical Leave 2018 2017 2007 First Paid Family and Medical Leave bill passes the Legislature, but it did not include a funding mechanism. 2015 Governor Inslee receives a federal grant to begin designing Paid Family and Medical Leave program. Paid Family and Medical Leave bill (Title 50 A RCW) passes the Legislature with a funding mechanism in place. Voluntary plan applications become available in late summer. 2019 Jan. 1: Premiums begin to be paid. 2020 Jan. 1: Employees may begin filing for benefits. 3

Covered Events Children (by birth, adoption or foster care) Parent Spouses Siblings Grandparent Grandchild Family Leave Caring for a family member Bonding after adoption, birth or fostering a child younger than 18 Families of service members can take leave for certain military-connected events. 4

Covered Events Medical Leave Care for your own medical illness or injury Self (This is what other states refer to as temporary disability) 5

Covered Events: Examples Taking time to receive cancer treatment Caring for a sibling getting treatment for opioid addiction Recovering from a back injury following an auto accident Extended hospital stay with a premature baby Spending time with a spouse before a military deployment 6

What is Paid Family and Medical Leave? Benefits Paid Family and Medical Leave is a statewide insurance program. This program will be funded by premiums paid by both employers and employees. Benefits begin in 2020. All eligible employees will receive up to 12 weeks as needed for family or medical leave. Up to 16 weeks may be taken for a combination of family and medical leave. Up to 18 weeks may be taken if a condition in pregnancy results in incapacity. 7

Benefit Eligibility Benefits are portable between jobs. Employees covered by the state program qualify after working 820 hours in the qualifying period. Employees covered by voluntary plans have the same criteria but must work 340 hours with the current employer. Employees who have worked 820 hours but don’t yet have 340 hours with their employer in the voluntary plan may still take leave under the state program. 8

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How It Works: Weekly Benefit Estimates Weekly Wage Projected Annual Wage Estimated Total Weekly Benefit $480. 77 $25, 000 $432 $576. 92 $30, 000 $524 $961. 54 $50, 000 $764 $1, 923. 08 $100, 000 $1, 244 $1, 000* (Weekly wage *52) For example only. This presentation is not a quote of benefits. • *Weekly max benefit $1, 000, which comes out to a yearly income of about $75, 000. Weekly minimum benefit is $100. • Benefits subject to change with annual adjustments by statute. • Benefits calculated by annual wages for example purposes only and don’t reflect the legal process of benefit calculation. 10

How It Works: Premiums Split Contribution Payroll Deductions Total Average Contribution . 4% of Paycheck Employers pay = 37% Employees pay = 63% Social Security Cap $128, 400 Family 1/3 Medical 2/3 100% Employee Funded 45% Employee Funded 55% Employer Funded Federally adjusted annually, with inflation. $50, 000/year wage Employee: $126. 67 Employer: $73. 33 Small businesses with fewer than 50 employees don’t pay employer premium. 11

Business Assistance Who’s eligible? Ø Employers with between 50 -150 employees Ø Employers with between 1 -49 employees who elect to pay the employer share of premiums Employers who hire a temporary worker to replace an employee on leave for at least 7 days can apply for a $3, 000 grant. Employers who incur significant additional wage-related costs due to an employee’s leave can apply for a grant of up to $1, 000. An employer may apply for no more than 10 grants per year and no more than once for each employee on leave. Employers in voluntary plans do not qualify for these grants. 12

Job Protection Employees covered by the state program are entitled to job restoration when returning from leave if they meet similar requirements under FMLA, if they: Work for an employer with 50 or more employees. Have worked for that employer for 12 months or more. Have worked at least 1, 250 hours for that employer in the past 12 months. Employees covered by a voluntary plan are entitled to job restoration when returning from leave if they: Have worked for that employer for 9 months or more. Have worked at least 965 hours for that employer in the past 12 months. Work for an employer with 50 or more employees. 13

Voluntary Plans • Voluntary plans allow employers to offer paid family and medical leave benefits outside the state plan. • Voluntary plans must be submitted to ESD for approval prior to going into effect. Premiums Benefits Must not deduct a dollar Must offer benefits that are as amount from an employee’s good as or better than what wages that is greater than the state plan offers. the amount that would be deducted under the state plan. Leave Must offer leave for the same reasons as the state plan. Accelerated payment schedule • Voluntary plan employers may offer an accelerated payment schedule in which they pay the same monetary benefit that the employee is entitled over a reduced length of time. • This allows voluntary plan employers to incentivize the employee to return to work earlier than planned. • Whether the employee returns to work early is entirely at the discretion of the employee. 14

Voluntary Plans Any employer may apply for a voluntary plan to provide either family or medical leave benefits, or both. The employer must have the plan re-approved annually for the first three years. After three years, the employer must submit the plan for re-approval if modified. The application fee is $250. If approved, neither the employee nor the employer pay premiums or file claims through the state program. The benefits must be equivalent or better than the state program including duration of leave and wage replacement. The employer must maintain health insurance if required under FMLA. As with the state plan, employee remains responsible for their portion of the health insurance premiums. 15

Voluntary Plan Process Apply online ESD reviews application Voluntary plan begins the following quarter More information regarding voluntary plans will be sent out late spring, early summer. 16

More To Come Reporting, application, and benefit tools being built now. More info summer 2018. Rulemaking is ongoing. Phase 2 now, Phase 3 late summer 2018. Staffing up support staff, web content creation, and training for 2019.

Common Employer Questions How does this interplay with other leaves, including FMLA and sick leave? How do you report Paid Family and Medical Leave premiums on W-2 s? What is the accelerated payment schedule under a voluntary plan? What are the small business exemptions? How can duplication of benefits be avoided between multiple employers? How do conditional premium waivers work? 18

Customer-Centered Product Maximize effective, efficient delivery of services through the use of technology matched to customer needs. Integrate customer testing throughout development. Have a modern look and feel, aligning with the expectations of today’s users. Support continuous improvement. 19

Customer-Centered Program Memorable Unique Accessible Program name coming soon! 20

Continue the Conversation Questions? Email: [email protected] wa. gov Survey: https: //www. surveymonkey. com/r/DTY 5 LTV Visit us online at www. esd. wa. gov/paid-familymedical-leave Join our listserv at bit. ly/paidleavelist Ask questions and make comments on our public forum at bit. ly/commentforum 21