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Legislature passes compromise paid family-leave bill

The Legislature passed and Governor signed a compromise family leave bill that included significant elements sought by the business community.

Previously, the House Labor and Workplace Standards Committee and Appropriations Committee had passed legislation that included, among other things, 26 weeks of paid leave, funded by a new tax that would have been paid 50% by employers. The bill also would have allowed a patchwork of locally-passed ordinances, such as one in development by the City of Seattle.
To head off that measure while remaining responsive to public-opinion polls showing overwhelming support for paid family leave, AGC and business partners negotiated the compromise bill with Labor and its allies. The negotiations were facilitated by a bipartisan group of Legislators, particularly Sen. Joe Fain (R-47).

The compromise bill provides twelve weeks of paid leave, funded by a new 0.41 percent payroll tax, 67% of which is paid by employees, 37% by employers. And notably, the compromise bill includes state preemption of local ordinances. The measure passed by bipartisan votes of 37-12 in the Senate and 65-29 in the House. At press time, it was expected to be signed by the Governor.

The employer group emphasized that an issue as important as paid family leave is best addressed through a collaborative discussion that takes all sizes of business into consideration and meets the needs of employees and their families rather than a one-size-fits-all that would likely come through a ballot initiative.

“I’m very pleased with the results of the negotiation,” said Sen. Fain. “This reflects a compromise that will support growing families, allowing new moms and dads to spend critical time with their children as well as giving individuals facing a temporary disability the time to recover. Just as importantly, it is a plan that recognizes that the burdens we place on business can have dire consequences if done improperly.”

Elements of the agreement shared by lawmakers include:
• Employees could take up to 12 weeks of paid leave to care for a new child or ailing family member or up to 12 weeks to recover from a disabling injury, and no more than 16 weeks total if using both. Women with pregnancy complications could take up to two additional weeks for a total of 18.
• Weekly benefits paid to workers would be a percentage of their wages compared with the state’s weekly average wage, with a maximum of $1000/week. A worker would need to make about $90,000 or more per year to receive that maximum.
• Premiums would be collected starting in 2019 and benefits paid in 2020.
• Employees and employers would pay premiums to fund the program. Payroll taxes raised from workers would cover 63 percent of the program, including 100 percent of the family leave portion. The tax is set at 0.41% for two years.
• Workers would be able to carry benefits from job to job, an aspect known as portability.
• Businesses with fewer than 50 employees would be exempt from paying premiums. However, their workers would still pay into the system and be eligible to receive benefits.
• Companies that offer paid leave would have a path to opt out of the state-run program if they have “as good or better” programs.

For a complete summary, click here.

Legislators noted that the agreement culminates years of efforts and a changing political dynamic. When Washington lawmakers established the program in 2007 it never got started because lawmakers could not agree on a way to pay the benefits. This year Sen. Fain and Rep. June Robinson (D-38) each sponsored a paid family leave bill and because both pieces of legislation relied on premiums to cover costs it created an opening for conversations to occur. Business groups also took note of passage of the initiative last year to boost the minimum wage. Paid family leave is an even more popular idea, according to polls.

“The minimum wage discussion taught business and labor an important lesson that if you don’t negotiate (in the Legislature), the ballot can be used to pass something more far-reaching,” said Sen. Marko Liias, D-21, another one of the negotiators. Lawmakers’ involvement is “critical to getting good policy that both workers and employers get benefits from and can live with,” he added.

For more information, contact AGC Chief Lobbyist Jerry VanderWood, 360.352.5000.