WA Cares Fund Payroll Deduction Starts July 1

We want to remind Washington employers the WA Cares Fund payroll deduction starts on July 1, 2023.  Please be prepared to deduct these funds unless you have an exemption letter from your employee.

In 2022, the Washington State Legislature approved two laws reforming the WA Cares Fund.  These changes needed to be made because elements of the 2019 law violated the federal Employee Retirement Income Security Act of 1974 (ERISA).

HB 1732 improved the program and shifted the timeline for implementation.  First, the timeline changed.  Contributions will begin on July 1, 2023, and benefits will become available on July 1, 2026. 

In addition, people near retirement can earn partial benefits for each year they work.  Anyone born before January 1968 can earn 10% of the full annual benefit if they work at least 500 hours.

HB 1733 established several voluntary exemptions to the WA Cares Fund.  Starting in 2023, ESD will process exemption applications for four categories of individuals:

• Employees whose primary residence is outside Washington, even though they work for a Washington-based employer
• US active military spouses and domestic partners
• Temporary worker non-immigrant visa holders
• Veterans with a 70% or higher service-connected disability

In 2022, the LTSS Trust Commission also studied ways to make benefits available to people who qualify for benefits, then move out of state.  The Commission submitted this analysis on benefit portability in a 2022 recommendations report to the Legislature.

Exemptions

All workers who qualify for an exemption can submit an exemption request to the Employment Security Department through SecureAccess.wa.gov starting January 1, 2023.  In addition to the exemptions listed above, employees with a qualifying Long-Term Care Insurance plan purchased before November 1, 2021, may also apply for an exemption. 

The Employment Security Department may require the employee to create an active Secure Access Washington (SAW) account.  Once the employee has a SAW account, select the ‘Add A New Service’ button on the left-hand side of the screen.  Next, select the ‘I would like to browse a list of services’ button on the right-hand side.  Scroll through the list to Employment Security Department.  Click it and select ‘Paid Family and Medical Leave’ from the drop-down menu. 

After the confirmation screen displays, the service is added to the employee’s Secure Access page.  Under Paid Family and Medical Leave, hit the Access Now button.  This site asks for a copy of identification documents like a driver’s license or passport.  Submit a copy of the ID.

The Employment Security Department will verify that the employee has an active LTC plan based on the ID submitted.  Once verified, the Employment Security Department sends an exemption letter to the employee.  The employee must give a copy of the letter to the employer.  The employer keeps the exemption letter as proof that they do not have to collect the payroll tax from the employee.  In addition, during the New Hire process for future employees, employers should ask if the new employee has an exemption letter so the payroll tax is not collected or paid by the employer.

Those workers who do not have an exemption letter will pay up to $0.58 per $100 of earnings starting July 1, 2023.

How can we help?

*This information simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information, contact the Washington Employment Security Department.