Paid leave contributions

AN ACT Relating to responding to federal guidance on tax 1
liability issues in the state paid family and medical leave program 2
by modifying the distribution of employer and employee contributions 3
between family and medical leave premiums without affecting how the 4
total premium is divided between employees and employers; and 5
amending RCW 50A.10.030 and 50B.04.010. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
Sec. 1. RCW 50A.10.030 and 2025 c 304 s 3 are each amended to 8
read as follows: 9
(1) The department shall assess for each individual in employment 10
with an employer and for each individual electing coverage a premium 11
based on the amount of the individual's wages subject to subsection 12
(((4))) (3) of this section. 13
(2) ((The commissioner shall determine the percentage of paid 14
claims related to family leave benefits and the percentage of paid 15
claims related to medical leave benefits and set the family leave 16
premium and the medical leave premium by applying the proportional 17
share of paid claims for each type of leave to the total premium rate 18
set in subsection (6) of this section.19
Z-0453.3
HOUSE BILL 2345
State of Washington 69th Legislature 2026 Regular Session
By Representatives Schmidt, Berry, Thomas, Ormsby, and Reeves; by
request of Employment Security Department
Prefiled 01/08/26. Read first time 01/12/26. Referred to Committee
on Labor & Workplace Standards.
p. 1 HB 2345
(3)))(a) For family leave premiums, an employer may deduct from 1
the wages of each employee up to 40 percent of the full amount of the 2
premium required. 3
(b) For medical leave premiums, an employer may deduct from the 4
wages of each employee up to ((45 percent of)) the full amount of the 5
premium required. 6
(c) An employer may elect to pay all or any portion of the 7
employee's share of the premium for family leave or medical leave 8
benefits, or both. 9
(((4))) (3) The commissioner must annually set a maximum limit on 10
the amount of wages that is subject to a premium assessment under 11
this section that is equal to the maximum wages subject to taxation 12
for social security as determined by the social security 13
administration. 14
(((5))) (4)(a) Employers with fewer than 50 employees employed in 15
the state are not required to pay the employer portion of premiums 16
for family and medical leave. 17
(b) If an employer with fewer than 50 employees elects to pay the 18
premiums, the employer is then eligible for assistance under RCW 19
50A.24.030. 20
(((6))) (5)(a) On or around October 20th of each year, the 21
commissioner must calculate the total premium rate as follows:22
(i) Calculate an amount that equals 140 percent of the prior 23
fiscal year's expenses, including the total amount of benefits paid 24
and the department's administrative costs; 25
(ii) Subtract the balance of the family and medical leave 26
insurance account created in RCW 50A.05.070 as of September 30th from 27
the amount determined in (a)(i) of this subsection (((6))) (5); and28
(iii) Divide the difference in (a)(ii) of this subsection (((6))) 29
(5) by the prior fiscal year's taxable wages. The quotient must be 30
carried to the fourth decimal place and then rounded up to the 31
nearest one hundredth of one percent. 32
(b) The commissioner must set the total premium rate at the rate 33
calculated in (a) of this subsection (((6))) (5) subject to the 34
following conditions: 35
(i) If the commissioner determines the total premium rate 36
calculated in (a) of this subsection exceeds a rate necessary to 37
maintain a three-month reserve at the end of the following rate 38
collection year, the commissioner must set the total premium rate at 39
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the minimum rate necessary to close the rate collection year with a 1
three-month reserve; and 2
(ii) The total premium rate must not exceed 1.20 percent.3
(c) For the purposes of this subsection (((6))) (5):4
(i) "Taxable wages" means the total amount of wages subject to a 5
premium assessment under this section for all individuals in 6
employment with an employer and all individuals electing coverage.7
(ii) "Three-month reserve" means the average monthly expenses, 8
including the total amount of benefits paid and the department's 9
administrative costs, in the prior 12 calendar months from the date 10
of the calculation in this subsection multiplied by three.11
(((7))) (6)(a) The employer must collect from the employees the 12
premiums provided under this section through payroll deductions and 13
remit the amounts collected to the department. 14
(b) In collecting employee premiums through payroll deductions, 15
the employer shall act as the agent of the employees and shall remit 16
the amounts to the department as required by this title.17
(c) On September 30th of each year, the department shall average 18
the number of employees reported by an employer on the last day of 19
each quarter over the last four completed calendar quarters to 20
determine the size of the employer for the next calendar year for the 21
purposes of this section, RCW 50A.24.010, and 50A.24.030.22
(((8))) (7) Premiums shall be collected in the manner and at such 23
intervals as provided in this title and directed by the department.24
(((9))) (8) Premiums collected under this section are placed in 25
trust for the employees and employers that the program is intended to 26
assist. 27
(((10))) (9) A city, code city, town, county, or political 28
subdivision may not enact a charter, ordinance, regulation, rule, or 29
resolution: 30
(a) Creating a paid family or medical leave insurance program 31
that alters or amends the requirements of this title for any private 32
employer; 33
(b) Providing for local enforcement of the provisions of this 34
title; or 35
(c) Requiring private employers to supplement duration of leave 36
or amount of wage replacement benefits provided under this title.37
Sec. 2. RCW 50B.04.010 and 2025 c 380 s 2 are each amended to 38
read as follows: 39
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The definitions in this section apply throughout this chapter 1
unless the context clearly requires otherwise. 2
(1) "Account" means the long-term services and supports trust 3
account created in RCW 50B.04.100. 4
(2) "Approved service" means long-term services and supports 5
including, but not limited to: 6
(a) Adult day services; 7
(b) Care transition coordination; 8
(c) Memory care; 9
(d) Adaptive equipment and technology; 10
(e) Environmental modification; 11
(f) Personal emergency response system; 12
(g) Home safety evaluation; 13
(h) Respite for family caregivers; 14
(i) Home delivered meals; 15
(j) Transportation; 16
(k) Dementia supports; 17
(l) Education and consultation; 18
(m) Eligible relative care; 19
(n) Professional services; 20
(o) Services that assist paid and unpaid family members caring 21
for eligible individuals, including training for individuals 22
providing care who are not otherwise employed as long-term care 23
workers under RCW 74.39A.074; 24
(p) In-home personal care; 25
(q) Assisted living services; 26
(r) Adult family home services; and 27
(s) Long-term services and supports provided in nursing homes.28
(3) "Benefit unit" means up to $100 paid by the department of 29
social and health services to a long-term services and supports 30
provider as reimbursement for approved services provided to an 31
eligible beneficiary on a specific date. The benefit unit must be 32
adjusted annually for inflation by the consumer price index. The 33
adjusted benefit unit must be calculated to the nearest cent/dollar 34
using the consumer price index for the Seattle, Washington area for 35
urban wage earners and clerical workers, all items, CPI-W, or a 36
successor index, for the 12 months before each September 1st compiled 37
by the United States department of labor's bureau of labor 38
statistics. Each adjusted benefit unit calculated under this 39
subsection takes effect on the following January 1st.40
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(4) "Commission" means the long-term services and supports trust 1
commission established in RCW 50B.04.030. 2
(5) "Eligible beneficiary" means a qualified individual who is 3
age 18 or older, resides in the state of Washington or has elected to 4
keep coverage when they relocate out-of-state under RCW 50B.04.180, 5
has been determined to meet the minimum level of assistance with 6
activities of daily living necessary to receive benefits through the 7
trust program, as provided in RCW 50B.04.060, and has not exhausted 8
the lifetime limit of benefit units. 9
(6) "Employee" has the meaning provided in RCW 50A.05.010.10
(7) "Employer" has the meaning provided in RCW 50A.05.010.11
(8) "Employment" has the meaning provided in RCW 50A.05.010.12
(9) "Exempt employee" means a person who has been granted a 13
premium assessment exemption by the employment security department.14
(10) "Long-term services and supports provider" means:15
(a) For entities providing services to an eligible beneficiary in 16
Washington, an entity that meets the qualifications applicable in law 17
to the approved service they provide, including a qualified or 18
certified home care aide, licensed assisted living facility, licensed 19
adult family home, licensed nursing home, licensed in-home services 20
agency, adult day services program, vendor, instructor, qualified 21
family member, or other entities as registered by the department of 22
social and health services; and 23
(b) For entities providing services to an eligible beneficiary 24
outside Washington, an entity that meets minimum standards for care 25
provision and program administration, as established by the 26
department of social and health services, and that is appropriately 27
credentialed in the jurisdiction in which the services are being 28
provided as established by the department of social and health 29
services. 30
(11) "Premium" or "premiums" means the payments required by RCW 31
50B.04.080 and paid to the employment security department for deposit 32
in the account created in RCW 50B.04.100. 33
(12) "Program" means the long-term services and supports trust 34
program established in this chapter. 35
(13) "Qualified family member" means a relative of an eligible 36
beneficiary qualified to meet requirements established by the 37
department of social and health services for the approved service 38
they provide. 39
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(14) "Qualified individual" means an individual who meets the 1
duration of payment requirements, as established in this chapter.2
(15) "State actuary" means the office of the state actuary 3
created in RCW 44.44.010. 4
(16) "Wage or wages" means all remuneration paid by an employer 5
to an employee. Remuneration has the meaning provided in RCW 6
50A.05.010. All wages are subject to a premium assessment and not 7
limited by the commissioner of the employment security department, as 8
provided under RCW 50A.10.030(((4))) (3). 9
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