Wednesday, November 6, 2024

Washington state sets new paid family leave premium rate for 2025

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OLYMPIA — Washington state will raise its Paid Family and Medical Leave premiums to 0.92% in 2025, following a year when the program provided $1.35 billion in benefits to more than 175,000 workers through the first nine months of 2024.

The Employment Security Department announced that the new rate marks an increase from the current 0.74%. Under the 2025 structure, employers will pay 28.48% of the premium, while employees will cover 71.52%, maintaining a ratio similar to 2024's distribution.

The adjustment follows a period of financial challenges for the program. In 2023, the program faced a deficit as benefit claims exceeded premium collections, prompting the state Legislature to add $200 million to the program's account. This intervention helped stabilize the fund and led to a lower premium rate for 2024.

However, the reduced 2024 rate created a gap between income and spending, according to state officials. "The decreased 2024 rate caused revenue from premiums to be lower than expenditures," the department explained in its announcement, noting that continued growth in benefit payments led to the 2025 rate increase.

Officials list three main factors behind the rise in benefit payments:
- Natural program growth
- The expiration of certain collective bargaining agreement provisions
- Increased eligibility due to post-pandemic employment recovery

Small businesses, defined as those with fewer than 50 employees, remain exempt from paying the employer portion of the premium. These businesses must still collect employee premiums or opt to cover them on behalf of their workers.

The state's Paid Leave program, which operates through mandatory premium collections from both employees and employers, requires an annual rate recalculation each October based on the previous year's usage and premium collection data.

For more information about the premium changes and program details, state officials direct interested parties to visit paidleave.wa.gov.

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