OLYMPIA — The payroll premiums on workers’ wages to pay for Washington state’s paid family and medical leave program will increase on Jan. 1.
The state’s Employment Security Department announced Thursday that the rate will increase from 0.6% to 0.8% of wages to keep pace with the number of people using the program, with most of the share continuing to be paid by employees.
The premium increase comes just weeks after an analysis of the financial health of Washington state’s paid family leave program estimated the fund would hit an $8.7 million deficit by the end of the year.
The actuarial analysis by the consulting firm Milliman that was recently presented to a legislative task force showed that the current premium rate is not keeping up with demand for the state benefit that launched in 2020 and it recommended increasing the rate.
When premiums first were enacted, 0.4% of workers’ wages funded the program, with 63% paid by employees and 37% paid by employers. An increase to 0.6% had already gone into effect earlier this year, and employees’ share increased to about 73%, with the remainder paid by employers.
Under the law, eligible workers receive 12 weeks paid time off for the birth or adoption of a child or for a serious medical condition of the worker or the worker’s family member, or 16 weeks for a combination of both. An additional two weeks may be used if there is a serious health condition with a pregnancy. Family members in the military also qualify for leave to spend time with service members about to be deployed overseas or who return home from deployment.
Weekly benefits are calculated based on a percentage of the employee’s wages and the state’s weekly average wage — which is now $1,586. Though the weekly amount paid out is currently capped at $1,327, that is set to increase in January to $1,427.
Concerns about long-term solvency for the program emerged earlier this year, with a warning in January that the program would hit a deficit by March. Lawmakers set aside $350 million in the state supplemental budget that passed earlier this year to address any deficit that exists on June 30, 2023, the end of the fiscal biennium.