Effective July 1, 2023, employers will be required to withhold WA Cares Fund benefits from employee wages for those employees who are not exempt from participating in the long-term care insurance program. Generally, employees who are employed in Washington State will contribute $0.58 per $100 of earnings or 0.58%. Although employers are required to withhold on behalf of applicable employees, they do not pay an employer portion of the benefit into the WA Cares Fund. Premiums collected from employee earnings are to be remitted to the state the same way Paid Family and Medical Leave (PFML) benefits are remitted.
If payroll has been outsourced to a third-party, the payroll provider should be aware of this new benefit and start withholding premiums on July 1, 2023. Employers should review the first payroll cycle after July 1 to ensure premiums are withheld from earnings for eligible employees and review remittances to the state to ensure the payroll provider is remitting the benefits to the fund.
Employers who have not outsourced their payroll are responsible for establishing this new deduction as part of their payroll process and remitting the benefits similarly as they do for PFML.
Employee exemptions are available for those who:
- -Have permanent residence outside of Washington State
- -Temporarily work in Washington with a nonimmigrant visa
- -Is a spouse or registered domestic partner of an active-duty military member
- -Is a veteran with a 70% or greater service-connected disability
- -Obtained private long-term care insurance by November 1, 2021, and received an exemption approval letter from the Washington Employment Security Department
Employees are responsible for notifying their employer of any changes to an exemption status. Failure to do so may result in back-payment of premiums and additional penalties. If an employee’s exemption status changes, they may become eligible to start participating in the WA Cares Fund and eligible for benefits but will need to start contributing. Employers are required to maintain documentation supporting exemptions and continuously monitor exemptions for changes that would make an employee newly eligible for participation.
Exceptions to the plan include:
- Federal employees who work in Washington but do not contribute to the program
- Employees of tribal businesses only contribute if the tribe has chosen to opt in
- People who are self-employed can chose to opt-out.
- Sole proprietors
- A joint venturer or a member of a partnership
- A member of a limited liability company (LLC)
Self-employed individuals can choose to opt in and pay the same amount as other eligible employees. If a self-employed individual has qualifying wages for PFML, they will also qualify for WA Cares. This includes:
An independent contractor, or otherwise in business for themselves.
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