Washington State CARES Act Premiums To deduct or not to deduct.

Washington State Employer Update

5 Employer Steps in Response to Washington Legislature Decision on the WA CARES Act and Premiums

Governor Jay Inslee signed into law on January 26 the bills swiftly pushed through the legislature that delay the collection of employee premiums under the WA CARES Act until July 1, 2023. What are the five biggest key next steps and additional provisions from this new slate of laws that Washington employers need to know about?

1. Stop Withholdings

Employers should immediately stop any WA CARES payroll deduction and postpone for 18 months. Beginning in July 2023, employees will pay $0.58 per $100 of earnings into the WA CARES fund through the mandatory payroll deduction.

2. Refund Premiums

Employers that collected any premium from employees with the first paychecks of 2022 under the then-existing version of the Act have 120 days to refund those premiums to employees in full.

3. Maintain Exemption Approvals

Employers should maintain copies of all exemption approval letters for those employees who purchased their own insurance and obtained approved exemptions from the Employment Security Department (ESD), the agency charged with the administration of the program. The bills were silent on whether ESD will reopen the period in which employees may obtain private insurance and apply for this exemption.

4. Prepare for Partial Benefits for Near-Retirees

Because of the gap between the first required premium collections and the first date of available benefits, the prior version of the law was criticized because it required employees near retirement age to pay into the fund without being able to qualify for benefits. Now, employees born before 1968 who pay into the fund are eligible for 10% of the maximum benefit for each full year that they pay premiums.

5. Be Aware of New Exemptions

The governor signed a second law that creates new voluntary exemptions from the premium collection for some populations unlikely to benefit from the Act. These include certain veterans receiving VA benefits, military spouses, non-Washington residents working in the state, and employees working under non-immigrant, temporary worker visas. Employees who believe they qualify for these exemptions will need to apply for approval from ESD.

February 2022

This summary is not intended to be exhaustive, nor should any discussion or opinions be construed as professional advice Content provided by our preferred partner for employment law Fisher Phillips. Published by permission of Fisher Phillips.

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