Washington officials hint at higher taxes to fund Paid Family and Medical Leave

The number of people tapping into Washington's Paid Family and Medical Leave fund keeps climbing and the state agency responsible for running the program says the tax on workers and employers that funds the program may need to go up, again.
Photo courtesy Hu Chen on Unsplash

The paid-leave program, abbreviated PFML, was launched four years ago

Carleen Johnson
The Center Square Washington

The number of people tapping into Washington’s Paid Family and Medical Leave fund keeps climbing and the state agency responsible for running the program says the tax on workers and employers that funds the program may need to go up, again.

The paid-leave program, abbreviated PFML, was launched four years ago.

The benefit can be used for up to 90% of an employee’s salary for medical or family leave care. Examples include the birth or adoption of a child, or to care for a family member.

“There’s been continuous growth since we launched in 2020,” said Alison Eldridge, leave and care assistant director at the Employment Security Department, which oversees the program. 

Last month, Eldridge told members of the Senate Labor & Commerce Committee that the fund will be in the red in a matter of months.

“You can see that a deficit can now happen earlier, as soon as October 2024,” Eldridge said during the work session, posting a graph showing the declining fund balance. “And, it may be more severe than was previously projected.”

Eldridge told lawmakers in the program’s first year, 112,737 people were approved for benefits. In 2023, the number of people receiving benefits grew to 210,268.

How does that translate into dollars paid out?

According to a Thursday blog from Elizabeth New, director of the Centers for Healthcare and Worker Rights at Washington Policy Center, “In 2020, just more than $613 million was paid to approved applicants. In 2023, that amount more than doubled, paying out close to $1.5 billion and up 24% from the previous year.”

“The increased number of people applying clearly wasn’t just a COVID thing,” she wrote. “Which is what PFML proponents suggested when the tax rate on workers nearly doubled from the initial 0.4% to 0.8% in 2023.”

New tells The Center Square in that meeting with lawmakers, Sen. Karen Keiser, D-Des Moines, suggested that rate may need to go higher.

“She threw out the idea of looking into getting rid of the income cap on PFML wages,” said New. “Another lawmaker wondered if legislators should have made the payroll tax rate for the fund higher, closer to 1%.”

“PFML is laced with entitlement,” she said. “It’s hard not to feel entitled to other people’s money when you’ve been forced to pour your wages into a shared piggy bank.”

New also pointed out that those taking advantage of the benefit are mostly middle- and upper-income employees.

According to Employment Security, 42% of people who took part in the program for fiscal year July 2022 through June 2023 made between $35 and $61 an hour, 36% made between $24 and $35 an hour, 21% made between $18 to $24 an hour, and 12% made less than $18 an hour.

PFML came before the WA Cares long-term insurance plan and its payroll tax of 58 cents on every $100 of earnings in 2023.

WA Cares may become an optional program if Initiative 2024 is approved by voters in November.

This report was first published by The Center Square Washington.


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