After putting a temporary hold on implementation of the WA Cares Fund pending expected legislative fixes, Washington Governor Jay Inslee has now signed HB 1732-2021-22 officially delaying implementation until July 1, 2023. The bill also changes eligibility requirements for individuals born before January 1, 1968, allowing them to qualify for partial benefits.

A companion bill signed on the same day allows a voluntary exemption from the WA Cares Fund for individuals who already have long-term care coverage and for others who would not benefit from the Fund. The group of “others” includes employees working in Washington whose permanent primary residence is out of state, such as Oregon residents employed in Washington. The opt-out also applies to some disabled veterans, military spouses, and non-immigrant temporary workers.

Following passage of these bills, Washington’s Employment Security Department (ESD) provided additional guidance for employers. For now, employers should review their internal records and:

• stop withholding WA Cares premiums from employee earnings;
• reimburse employees for WA Cares premiums within 120 days of the date premiums were collected; and
• continue to maintain copies of exemption approval letters for workers who’ve provided them.

Although ESD is not accepting premium payments for WA Cares, Paid Family and Medical Leave premiums are still due.

Note that these changes only delay implementation for 18 months. Beginning July 1, 2023, employers are required to begin collecting premiums from employees who have not chosen one of the available opt-outs. Additional information can be found at WA Cares Fund.

At Geffen Mesher, we will continue to monitor the legislative changes to the Washington Cares Fund and provide updates as they become available.

Our state and local tax (SALT) professionals are available to assist if you have questions about this new payroll tax. Please contact our SALT Team at SALT@GMCO.com.