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Paid Leave: Premium rate will increase in 2022

Paid Leave: Premium rate will increase in 2022

(This information has been provided by Employment Security Department (ESD) – For the first time since Paid Family and Medical Leave launched, the premium rate will increase. This change goes into effect with Quarter 1 of 2022. The split of the employer and employee share of the premium rates will also change in the new year.

Starting Jan. 1, 2022, the premium rate will be 0.6%.

The new premium rate of 0.6% takes effect on Jan. 1, 2022. But for now, the current rate of 0.4% is in effect until Dec. 31, 2021.

Employers will pay approximately 27% of the total premium and employees will pay about 73%.

Continue using the 0.4% rate for the rest of 2021.

But don’t forget to withhold at the new 0.6% rate starting in January! If you don’t, you’ll be responsible for the difference during quarterly reporting.

What’s next

  • Update your calculations and withhold the new 0.6% rate starting in January. If you don’t, you’ll be responsible for the difference during quarterly reporting.
  • For your calculations, the employer share of premiums is 26.78% and the employee share is 73.22%.

Updated resources coming Nov. 1 to paidleave.wa.gov

We will have updated resources available at paidleave.wa.gov for you and your employees before the end of the year. Stay tuned!

Rate is increasing due to higher usage and reduced payrolls during the pandemic

Washington workers are finding value in Paid Leave.

They are using the program as intended, and it’s allowing them to take care of themselves and their loved ones when they need it most.

  • There has been high usage of the program this year, and family leave use was higher than medical leave use.
  • About 51% of our claims are for family leave and about 49% are for medical leave. This means we need to change the amount we collect in premiums for each type of leave.
  •  

Reduced payrolls during the pandemic

While overall usage has been high, the total premiums collected during quarterly reporting have been lower because of reduced payrolls due to Covid-19.

How we calculate premium rates

By law, we recalculate the Paid Leave premium rate annually on September 30. The premium rate is adjusted based on usage of medical leave and family leave during the previous year. Premiums, collected from employees and employers through quarterly reporting, fund the Paid Leave program.

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