Washington PFML Developments Keep Us Hopping

Posted on: April 8, 2019 0

By Marti Cardi, Vice President Product Compliance Gail Cohen, Director Employment Law & Compliance

April 8, 2019

Despite my recent advice to Washington employers to “sit back and relax,” I now have to say: Don’t get too comfortable with all things Washington PFML.  Although employers have been required to withhold premium contributions from employee paychecks (or waive such withholding) since January 1, lots of pieces are still in motion.  We recently blogged about the delay in premium payments and reporting to the state here.  Now:

  • The governor has signed into law some amendments to the PFML statute relating to employee benefits, the
    waiting period, voluntary plans, and more.
  • The Washington Employment Security Department (ESD) has finalized its Phase Three Rules, which relate
    in part to claims handling procedures.

Amendments to Washington PFML

The full bill as passed can be reviewed here. These are some of the more significant changes:

Waiting period

Employees must satisfy a 7-day waiting period before they can start receiving benefits. Prior to the PFML amendments, it was unclear how that waiting period would work. The law now states more clearly that the waiting period consists of “the first 7 consecutive calendar days” (rather than the previous version, “first 7 calendar days of leave”).  The amendments further clarify that the waiting period starts when an eligible employee takes leave for the minimum claim duration of 8 hours.  So, once an employee’s leave for a qualifying reason begins, he can start receiving benefits 7 calendar days later (if the leave continues beyond that) rather than having to take 7 days of leave before getting benefits.

And a reminder:  No waiting period is required for leave for the birth or placement of a child.

Topping off PFML benefits

The original PFML law had a strange provision that prohibited employers from allowing employees to use other pay benefits during a PFML leave. This has been corrected to align more closely with PFML laws in other states. Now, once benefits start in 2020, an employer may offer “supplemental benefit payments” to an employee on family or medical leave in addition to any paid family or medical leave benefits the employee is receiving.  Supplemental benefit payments include, but are not limited to, vacation, sick, or other paid time off.  Employers are not required to offer supplemental pay benefits.  If offered, the choice whether to use them lies with the employee – the employer cannot force the employee to use such benefits.

Voluntary plans

The PFML amendments affect voluntary plans as follows:

    • Payment of benefits from only one plan. An employee may only receive payment of benefits for
      family leave, medical leave, or both from one approved plan at a time. If an employee is simultaneously
      covered by more than one approved plan, the employee will receive benefits only under the plan for
      which the employee has worked the most hours during the employee’s qualifying period.  From the
      context of this amendment, it appears that this applies whether the simultaneously applicable plans
      are 2 voluntary plans or a voluntary plan and the state plan.

What is NOT clear (and we’ll be asking questions of the ESD) is whether the employee receives benefits limited to the amount attributed to that one plan only, or receives benefits equivalent to his entitlement under all applicable plans, but only paid by the plan of the employer for whom the employee has worked the most hours in the qualifying period.  If that is the case (we hope not), how would the paying plan know how much is owed to the employee under other applicable plans?

    • Waiver of voluntary plan eligibility. To be eligible for benefits under a voluntary plan, an employee
      must have worked both 820 hours within the state during the qualifying period, and 340 hours for
      the employee with the voluntary plan (the 340 hours can count toward/be a subset of the 820 hours).
      An employee who commences work with a new employer with a voluntary plan is eligible for benefits
      immediately if she was eligible under a voluntary plan with her previous employer.  Otherwise, that
      340-hours-of-work for the new employer requirement applies before she can receive benefits.
      Pursuant to the new amendments, however, an employer with an approved voluntary plan may waive
      the 820 and/or 340 hours worked requirements, in whole or in part, to allow an employee to be
      immediately eligible for coverage under the employer’s voluntary plan
      .

Phase Three Final Rules.

A bit of background:  States pass the laws that require employers to provide paid family and medical.    The laws establish the basic structure of employee and employer rights and obligations.  Then the state agency that will be responsible for implementation, administration, and enforcement of the law passes rules or regulations (same thing, basically) that fill in the details needed to administer the law and advise employers and employees how to comply.

The Washington Employment Security Department (ESD) designed a process to draft, revise, and finalize its PFML rules in six phases.  The final version of the Phase Three rules have been released.  These are important because they address the claims handling procedures, including:

  • Defining a claim year
  • Employee notice requirements (timing and content)
  • Process and timing for application of benefits
  • Requirements for documentation of the leave request (certification contents, timing, etc.)

The Phase Three rules are available here.

What Matrix is doing:

  • Employers can still file for approval of a voluntary plan at any time. Matrix has a template for
    voluntary plans and a complete process for submitting plans for approval on behalf of clients.
  • Now that the Phase Three rules are finalized, Matrix is developing claims handling procedures,
    employee 
    communications, training for our employees, and other necessary processes. We will
    be ready for claims 
    management for our clients with voluntary plans when benefits are available,
    starting January 1, 2020.
  • Matrix continues to pose questions to the Washington ESD for provisions of the law and rules that are
    still not clear.

MATRIX WILL BE READY ON JANUARY 1, 2020.  WILL YOU?

If you want to learn more contact us at ping@matrix.com or through your Account Manager.

 

Sit back and relax! Washington PFML reporting and payments to the state delayed by 3 months.

Posted on: March 14, 2019 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE & GAIL COHEN, DIRECTOR-EMPLOYMENT LAW/COMPLIANCE

 

We know employers have been on the edge of their seats wondering when and how they can begin their required Washington paid family and medical leave reporting for Q1 slated for April 1-30.

Well, calm yourself. 

The state just announced that first quarter employer reporting is being delayed until July 1-31, 2019.  Likewise, Q1 payments to the state for employer and employee premium contributions for those employers using the state PFML plan have been delayed.  At that time, employers will make 2 separate reports, and payments if applicable, for 2019 Q1 and Q2.

More information can be found on the state’s website, particularly the rollout FAQs and the email notice to employers.  One point of note: The delay in the reporting and payment deadlines for Q1 does NOT affect the start of PFML benefits on January 1, 2020.

We at Matrix have been watching the WA PFML website and announcements regularly for information about procedures for employers to fulfill their requirements for reporting and premium payments for Q1.  I’m guessing the state needs more time to get the technology in order.  Not a big surprise, considering they can’t even accept electronic payments yet for voluntary plan application fees.

The employees of the Washington Employment Security Department (ESD) who answer our calls and emails have been very kind to deal with and offer as much assistance as the statute allows.  But I hope other states in the process of implementing or considering paid family and medical leave are watching.  The PFML law passed by the state legislature did not allow ESD enough time to develop the program procedures, regulations, and technologies.  The ESD staff is left with tough questions and, sometimes, no good answers.  Hang in there ESD folks, and thanks for what you do!

Matrix can help!  At Matrix we offer administration of Washington voluntary plans for paid family and medical leave.  These include providing a plan template, filing the plan with the state, fielding ESD questions, and seeing the plan through to approval.  Then Matrix will administer the PFML leave and benefits for your Washington employees, along with other Washington statutory leaves, the FMLA, and your company policies.  For assistance and more information, contact us at ping@matrix.com or through your Account Manager.

WASHINGTON STATE PAID FAMILY AND MEDICAL LEAVE MOVES FORWARD STEP BY STEP

Posted on: November 13, 2018 0

Employer Action Items and Resources

Washington paid family and medical leave is coming (PFML). Although leaves and benefits aren’t available until January 1, 2020, employers have decisions to make before employer and employee premium contributions start in January 2019.

You can read our prior blog posts for a summary of this up-coming law and significant developments at this link or enter “Washington” in the blog’s search box.

Employer Action Items. Time is ticking, and as a Washington employer you have things to do! At Matrix we are working with our clients and business partners to help them get ready for Washington PFML. Below is a list of key action items that all Washington employers, even those with a single employee, must address soon (and there will be more in 2019!):

  • Decide whether to use the state program or a voluntary plan. Unless and until you have an approved voluntary
    plan,
    you and your employees will be covered by the state program.
  • If you decide upon a voluntary plan:
    • Develop the plan and file for approval with state – allow 30 days for approval.
    • Make employer choices that are available with a voluntary plan, such as whether to use the accelerated
      payment option and whether to offer greater benefits (duration, amount, leave reasons, covered
      relationships) than required by state.
  • Determine whether you will deduct from employee wages or pay the employee premiums yourself (for state plan)
    or bear all costs by the company (for voluntary plan). If you choose to deduct employee premiums from paychecks:

    • Communicate with your payroll service about employee deductions.
    • Communicate to employees about deductions starting 1/1/2019 (we recommend including a brief overview
      of benefits coming 1/1/2020).
    • For a voluntary plan, set up a separate bank account to hold premiums deducted from employee wages.
    • For the state program, be ready to pay employee and employer premiums to the state quarterly, starting
      April 2019.
  • Post notices in your workplaces by the date required (to be announced by the state; we expect a state-issued
    form notice for employers’ use).
  • By 1/1/2020, review and revise existing STD policies/plans and other company leave policies to coordinate with
    the required Washington PFML benefits and ensure no duplication of benefits.

Matrix Resources. Matrix has developed a variety of resources to assist employers in preparing for Washington PFML, making the necessary choices, and developing a compliant voluntary plan:

  • Webinar on Washington PFML generally (recording available)
  • Webinar on voluntary plans specifically (recording available)
  • Washington PFML Comparison – State Program vs. Voluntary Plan
  • Washington PFML – State Program or Voluntary Plan? Employer Considerations
  • Sample voluntary plan

We can help you make the decision – state or voluntary – and file and administer your voluntary plan if that is your election. If you would like to receive any of these resources or discuss your options, the process, and more, contact your Matrix account manager or practice leader, or send your questions to us at ping@matrixcos.com. We are constantly updating and adding to our materials, so stay in touch!

Washington Resources. The Washington Employment Security Department (EDS) administers the PFML program. Its website has many resources for employers and employees. One of the latest additions is the Employer’s Toolkit, which provides an overview of the PFML program, employer responsibilities, premium calculations, and sample communications to employees about PFML, including a handbook insert, an email or blog notice to employees, and a paystub insert. Another helpful resource is the Voluntary Plan Guide which provides an overview of voluntary plan requirements.

The state is drafting and implementing rules that provide details on the PFML program, benefits, voluntary plans, the claims process, and more. The rules are divided by topic into 6 phases. All draft and final rules can be accessed on the ESD’s Rulemaking Page. Here is the status so far:

Keep watching this blog. We will provide updates as rules are drafted and finalized.

Matrix can help! Washington paid family and medical leave imposes many new employer obligations and challenges. We can help you through the morass. Call on your account manager or practice leader, or contact us at ping@matrixcos.com.

Washington State Issues First Phase of Paid Family and Medical Leave Regulations

Posted on: June 5, 2018 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE & GAIL COHEN, DIRECTOR-EMPLOYMENT LAW/COMPLIANCE

In 2017 Washington State was the fifth state to pass a paid family and medical leave law. 

The law requires employers to provide up to 18 weeks of paid, job-protected leave per 52-week period due to the employee’s own serious health condition, to bond with a new child, to care for a family member with a serious health condition, and for military exigencies.  The benefits are funded by employer and employee payment of premiums.  

Premium payments begin January 1, 2019, and benefits are available starting January 1, 2020.  In the meantime, Washington’s Family Leave Act remains in force to provide employees with up to 12 weeks of unpaid job-protected leaves of absence.  We reviewed the new paid family and medical leave law on this blog when it was passed.  Click here  to read our summary.  

On May 29, 2018, the Washington State Employment Security Department released the first of four sets of rules to implement the Paid Family and Medical Leave Program. Rules become effective 31 days after filing.  Topics will be addressed on the following schedule:

 

Phase One Phase Two Phase Three Phase Four
-Premium liability

-Collective bargaining agreements

-Voluntary plans

-Employer responsibilities

-Small business assistance

-Penalties

-Benefits -Appeals
November 2017 – May 2018 April – November 2018 August 2018 – January 2019 January – May 2019

 

Assessing and Collecting Premiums  [ WAC 192-510-010 et.seq.]:  The new regulations contain many details.  Here is a quick summary, with links to the Phase One regulations if you want to read them yourself.  Matrix will provide more detailed guidance in the near future.

Election of coverage and withdrawal of election by self-employed persons and federally-recognized tribes

Determination of wages earned and hours worked for self-employed persons

Effect of employer’s size on liability for premiums and eligibility for small business assistance grants

How the state will assess the size of new employers

Payment of premiums by employer (paid quarterly; due on the last day of the month following the end of the quarter

This regulation states that the payment must include “the premiums owed on all wages subject to premiums during that calendar quarter.” Although not specified, presumably this includes both the employer’s share of the premiums and the amounts withheld from paychecks for the employees’ share.

How “localization” of an employee’s work in Washington is determined for coverage by the law, and when services not localized in Washington are also subject to the law

Collective Bargaining Agreements  [WAC 192-520-010]:

The effect of collective bargaining agreements (CBAs) in effect before October 19, 2017 – the date the law became effective – and those that expire or are reopened or renegotiated on or after that date.

The manner of determining an employee’s hours worked when the qualifying period includes time worked under a CBA and then hours worked after the CBA expires without renewal or renegotiation (and so is then covered by the act).

The effect on employers of having employee populations subject to one or more CBAs and/or employee populations not subject to a CBA.

Voluntary Plans  [WAC 192-530-010 et seq.]

The required features of voluntary plans:

A voluntary plan must provide at least the same or greater benefits than the state benefits with regard to the duration and reasons for leave.

The amount of benefits available must be the same or greater than benefits offered by the state plan.

The premium paid by the employee cannot be any greater than the employee’s premium for the state plan

Submission of plans for state approval:

Voluntary plans must be submitted for approval through a state portal, expected to be available in late summer 2018. There is a $250 filing fee per plan.

A plan must be submitted for re-approved every year for its first three years.

Thereafter, re-approval is not required unless the employer makes changes to the voluntary plan that are not required by law.

Rules regarding payment of benefits on an accelerated schedule:

An employer can agree to offer benefits payments on an accelerated schedule whereby the employee receives the total amount of the anticipated leave benefit over a shorter time period, but not less than one-half the duration of the anticipated leave.

The employee can choose to return to work earlier than planned and does not have to repay the amounts paid in advance for leave time not taken.

Election of voluntary plans for medical and family leave benefits:

An employer can elect to have paid medical and paid family leave both covered by a voluntary plan, or can have a voluntary plan for just one benefit and use the state plan for the other benefit.

Provisions for how to determine employee eligibility for voluntary plan benefits, how to avoid duplication of benefits paid by the state and by a voluntary plan, and what happens when a voluntary plan ends.

Watch this space!  Matrix will continue to monitor Washington’s regulatory activities and report on the new regulations as Phases Two, Three, and Four are issued.  In the meantime, more materials are available on the state’s Employment Security Department website.

Matrix can help!  As always, we are tracking and analyzing developments regarding the Washington Paid Family and Medical Leave Program.  We will be ready well in advance to advise employers on the premiums beginning in 2019 and benefits beginning in 2020.  If you have questions, contact your Account Manager or ping@matrixcos.com.

Ten Years Later, Washington State Makes Its Paid Family Leave Dream a Reality

Posted on: July 6, 2017 0

By Marti Cardi, VP-Product Compliance

Gail Cohen, Director-Employment Law/Compliance

The state of Washington has enacted a law requiring paid family and medical leave for eligible employees.  The state was on the forefront of the paid family leave movement when it passed a paid parental leave law in 2007, but the law never went into effect because the legislature was unable to fund the benefit.  Now, a paid family leave bill much broader than the 2007 law was signed into law by Governor Jay Inslee on July 5, 2017.  The law will begin providing paid leave benefits to eligible employees on January 1, 2020.*

States with paid family leave programs currently in effect are California, New Jersey and Rhode Island, plus New York (benefits beginning January 1, 2018), and the District of Columbia (benefits beginning January 1, 2020).  The groundswell is huge, with more than 25 states introducing some sort of paid family leave bill so far this year!

Here is a summary of key provisions of the Washington law:

Effective date Employees can start taking paid family leaves January 1, 2020.

Employers can begin employee payroll deductions on January 1, 2019.

Eligible employees Must work 820 hours in the “qualifying period,” defined as the first 4 of the prior 5 calendar quarters; OR, if the employee is not yet eligible, the preceding 4 calendar quarters.  Equates to about 15.75 hours per week.
Covered employers An individual or entity with one or more employees; includes private companies, the state and subdivisions, and local governments.
Leave benefits reasons Employee’s own serious health condition.

Bonding with a newborn or newly placed or adopted child.

Care for a family member with a serious health condition.

Military exigency (leave necessitated for various reasons due to a family member’s active duty deployment).

Duration of leave benefits Employee’s own serious health condition  – 12 weeks per 52 consecutive calendar weeks.

Bonding with a new child, to care for a family member with a serious health condition, or due to a military exigency – 12 weeks total per 52 consecutive calendar weeks.

Limited to 16 weeks total per 52 consecutive calendar weeks for employee’s leave and family leave reasons; plus additional 2 weeks if needed for pregnancy complications.

Maximum total leave benefit is 18 weeks per 52 consecutive calendar weeks.

Increments of leave benefits Minimum of 8 hours, rounded down to the next full hour.
Waiting period for benefits There is no waiting period for bonding leave benefits following the birth or placement of a child.

For other types of leave benefits, there is a waiting period of 7 calendar days.

Family members for whom leave can be taken Child (any age), parent, spouse, state-registered domestic partner, sibling, grandparent, grandchild.
Benefits Maximum of $1000 per week starting in 2020, subject to adjustment by the state for each subsequent calendar year.

Employees who make 50% or less than the state’s average weekly wage (AWW) will receive 90% of their AWW.

Employees who make greater than 50% of the state’s AWW will receive:

o   90% of their wages up to 50% of the state’s AWW; PLUS

o   50% of their AWW in excess of 50% of the state’s AWW (subject to the $1000 cap)

Funding For 2019 and 2020, the total premium is 0.4 percent of the employee’s wages, capped at the state’s AWW, beginning on January 1, 2019. Annual adjustments may be made thereafter.

An employee pays about 2/3 of the total premium through payroll deductions.

The employer pays about 1/3 of the total premium.

An employer may elect to pay all or a portion of the employee’s share of the premium.

Self-funded plans The law authorizes employers to operate their own equivalent voluntary plans.
Miscellaneous Includes special provisions for small businesses with fewer than 50 employees.

Allows tribes and self-employed individuals to opt in.

Job protection Following leave and benefits, an employee is entitled to restoration to the same position held before the leave; or to an equivalent  position with equivalent benefits, pay, and other terms and conditions of employment at a workplace within 20 miles of the employee’s original workplace.

What’s next?

There are many unanswered questions about this law and how it will interact with the existing Washington Family Leave Act and the federal Family and Medical Leave Act, which provide unpaid job-protected leave for many of the same reasons.  We expect robust regulations to be passed before the effective date of January 1, 2020.  In the meantime, for your reading pleasure we provide this link to the full text of the Washington law.

*Please be patient!  We have over 2 years to implement this law.  In the meantime, we are working diligently to be ready for the New York paid family leave law and the ERISA disability claims handling rules changes, both effective January 1, 2018!  You can find prior posts on the New York law here  and here.  A primer on the new ERISA regulations is available here.

 

 

MATRIX CAN HELP!  Matrix provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. We monitor the many leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.