Statutory Update – Washington Paid Family and Medical Leave
February 24, 2020
Washington Paid Family and Medical Leave (WA PFML) is Here!
WA PFML went live on January 1 and, to assist workers in preparing for and submitting leave applications, ESD has updated the Employee page of the PFML website with a new look and feel. Here employees can find general information about the program, plus access additional resources such as a benefit estimator, checklists, guides and forms on the Get Ready to Apply page. Employer resources, including the updated Employer Toolkit, can be found on the Employer page.
Model Notice Available
On December 24, 2019, Washington’s Employment Security Department (ESD) posted the model Poster and Statement of Employee Rights, which can both be found on the WA PFML Employer Page. As of January 1, 2020, employers are required to display the poster in a conspicuous place, plus provide the Statement of Employee Rights within 5 business days of the later of an employee’s (1) 7th consecutive day of absence, or (2) notice to the employer that absence is due to medical or family leave.
Interplay of WA PFML and Company Leaves
Trion has received a number of questions from our clients about how WA PFML will work with their existing benefit programs. Given the complexity of the topic we engaged our legal counsel to assist with interpretation.
Does WA PFML run concurrently with FMLA?
FMLA and WA PFML will run concurrently where possible. However, given the restriction that employers may not dictate when an individual takes leave under WA PFML, the potential exists for them to run separately, or “stack”, thereby providing the employee with leave and job protection exceeding each individual law’s maximum duration.
Does WA PFML run concurrently with an Employer’s Short Term Disability and/or Paid Leave benefits?
Nothing in the WA PFML law prohibits an employee from receiving WA PFML and company benefits such as Short Term Disability, Paid Family Leave and Paid Parental Leave at the same time. However, as employers may not restrict an employee’s access to WA PFML leave or benefits in any way, there is the potential for employees to wait to apply for WA PFML leave until after company benefits have been exhausted.
To reduce the opportunity for this “stacking” of benefits, employers may want to consider amending their policies to make eligibility for receipt of company benefits contingent upon an employee’s application for WA PFML benefits. Thus, an employee is not required to access the employer’s benefits, but if he wishes to do so, he must first apply for WA PFML.
In order to accomplish this, however, the employer must first designate specific company benefits as ‘Supplemental Benefits’…
What are Supplemental Benefits?
The regulations define a “Supplemental Benefit Payment” as “a payment offered by an employer to an employee who is taking leave under [WA PFML]”, and state that “employers may, but are not required to, designate certain benefits including, but not limited to, salary continuation, vacation leave, sick leave, or other paid time off as a supplemental benefit” (WAC 192-500-180).
Any payment that the employer designates as a Supplemental Benefit will, at the time of a WA PFML claim, be “ignored” by the state for the purposes of paying the WA PFML benefit. The employer will want to make sure that their policies limit the company-provided benefit to a “top-off” of the employee’s WA PFML benefit. This will take the form of benefit offsets that employers are used to seeing with other statutory benefits. For example, if an employee is receiving company Paid Family Leave and WA PFML benefits concurrently, the company leave benefit would be reduced, or “offset”, by the amount of the WA PFML benefit; this results in the employee receiving the greater of the two benefits, not both.
Payments not designated as Supplemental Benefits are paid instead of WA PFML benefits for a particular period; they do not run concurrently and do not “top off”.
As noted in the sections above, employers should amend their policies as needed in order to clearly outline how their leave and paid time off benefits will work with WA PFML.
Other Impacts of Supplemental Benefits
As stated in the regulations:
- Supplemental benefits are excluded from the definition of wages in the WA PFML law
- Employers should not report supplemental benefit payments or associated hours to the department during quarterly reporting to ESD for WA PFML purposes*
- Employees should not report hours of paid time off that have been offered as supplemental benefit payments by the employer to the department on the weekly application for benefits*.
* ESD has clarified that only the portion of the supplemental benefits paid at the time WA PFML is taken is non-reportable.
Which Benefits Should Be Designated as Supplemental Benefits?
Since it is permissible for WA PFML benefits to run concurrently with and offset Supplemental Benefits, likely choices are a company’s paid leave benefits such as those for maternity, parental and family care. The regulations include salary continuation, sick time, vacation time and “other paid time off” in the list of payments that may be designated as Supplemental Benefits, however employers may want to take care when considering this for banks of time that may be used to comply with Washington’s Paid Sick Leave (PSL) ordinance. Since the PSL allows employees to decide when to use accrued time for qualifying reasons and requires payment at a set rate, there is concern that an employer could be in violation of the PSL law if an employee sought to use a full day of PSL and the employer attempted to offset the full day of PSL with the WA PFML benefit. Employers are encouraged to consult with an attorney in making this decision.
- Most company disability program benefits are excluded from the definition of wages and are therefore ignored by ESD in the payment of benefits. With that, STD may not need to be specifically designated as a Supplemental Benefit, but it is suggested that employers do so in order to be clear to employees that the two are treated the same way.
- A benefit’s designation as “Supplemental” is irrelevant during the WA PFML waiting period. That is, it does not matter what type of paid time the employee elects to use during the waiting period, it does not impact WA PFML benefits paid after that time.
- Employers with Voluntary Plans are not required to designate Supplemental Benefits. However, the employer’s disability and leave policies should clearly outline how company benefits work in conjunction with WA PFML.
How Does an Employer Designate Supplemental Benefits?
There is no explanation in the law text or regulations as to how an employer identifies Supplemental Benefits for its employees, though the first step may be during preparation of the Statement of Employee Rights that must be provided to the employee at the time of need for leave, as described above. The model provided by ESD includes the following text:
Rather than simply indicating Yes or No, employers may want to list which of the company’s benefits have been designated as “Supplemental”. This may help avoid confusion as well as temporarily bridge the gap while formal policies are being updated.
Note: The Statement of Employee Rights also includes a spot for the employer’s Unique Business Identifier (UBI) number, the company’s 8-digit WA tax registration number issued by the state. Employees of employers participating in the State program will need the company’s UBI in order to file a WA PFML claim online.
Please contact your Trion Account Team members for specific questions about these or other updates.