Update Applicable to:
All employers in the state of Washington
On January 27, 2022, Governor Jay Inslee signed House Bills 1732 (HB 1732) and 1733 (HB 1733), which delay implementation and propose several reforms to the Washington Cares Act.
What are the details?
The new bills came after legislative leaders announced an intention to delay premium collections for the Washington Cares Fund in December 2021 and to clarify employer obligations under the Act. The delay will allow legislators more time to address the concerns that led to recent court challenges and a citizens’ initiative with the goal of improving the program.
HB 1732 delays implementation of the Washington Cares Act, including employers’ obligation to deduct premiums from employee pay, until July 1, 2023. The Act requires Washington employers to collect a 0.58 percent payroll tax from all employees, and collections were previously set to begin on January 1, 2022.
Under the new law, any premiums already collected from Washington employees in 2022 are to be refunded within 120 days of being collected.
Under HB 1733, the Employment Security Department will begin accepting and approving applications for voluntary exemptions on January 1, 2023. These exemptions exceed those available under the Act as originally enacted and will allow individuals who already have coverage or who are not likely to receive benefits to permanently opt-out. Importantly, military spouses, employees with nonimmigrant visas, and employees who reside in another state but work in the state of Washington may request an exemption from the premium deductions.
Ogletree Deakins suggests that “[d]ue to the implementation delay, employers currently are not required to collect premiums for the Washington Cares Fund from their Washington employees. For employers that started collecting the payroll tax premiums from their Washington employees on January 1, 2022, HB 1732 requires those employers to refund any collected premiums to the employees.”
The Washington Employment Security Department published instructions for employers. Instructions can be found here.
For more information, please see the links below:
What do employers need to do?
Employers should review the links provided above and should not collect any more premiums for the Washington Cares Fund. It is advised by multiple law firms to begin refunding any collected premiums to the employees within 120 days of the date premiums were collected.
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