Washington has passed legislation modifying how employer and employee contributions are allocated within the state Paid Family and Medical Leave (PFML) program. Effective June 11, 2026, the bill responds to recent federal guidance on tax‑liability issues by restructuring the distribution of premiums between the family‑leave and medical‑leave portions of the program, without changing the overall premium split between employers and employees. These changes amend RCW 50A.10.030 and update the procedures governing how premiums are assessed, calculated, and collected.
Under the new structure, employers may now deduct from employee wages up to the full amount of the medical leave premium required, an authority previously limited to family‑leave premiums. For family leave premiums, the prior 45 percent cap on employee deductions is replaced with a more complex formula that calculates the allowable deduction based on the difference between combined PFML premiums and medical‑leave premiums. The bill also requires the Employment Security Department (ESD) commissioner to determine the proportion of paid claims attributable to family‑leave and medical‑leave benefits and to set premium rates accordingly. Employers remain responsible for collecting employee contributions through payroll deductions and remitting them to ESD as agents of the employees.
The legislation further directs the Commissioner of the state’s Employment Security Department to annually establish the maximum wage base subject to PFML premiums, aligning it with the federal Social Security wage cap. These changes affect all employers and employees participating in the PFML program, as well as individuals who elect voluntary coverage. By refining premium allocation and aligning state practices with federal tax guidance, the bill aims to ensure continued compliance and financial stability within Washington’s paid leave system.