April 8, 2019

Despite my recent advice to Washington employers to “sit back and relax,” I now have to say: Don’t get too comfortable with all things Washington PFML. Although employers have been required to withhold premium contributions from employee paychecks (or waive such withholding) since January 1, lots of pieces are still in motion. We recently blogged about the delay in premium payments and reporting to the state here. Now:

The governor has signed into law some amendments to the PFML statute relating to employee benefits, the
waiting period, voluntary plans, and more.
The Washington Employment Security Department (ESD) has finalized its Phase Three Rules, which relate
in part to claims handling procedures.

Amendments to Washington PFML

The full bill as passed can be reviewed here. These are some of the more significant changes:

Waiting period

Employees must satisfy a 7-day waiting period before they can start receiving benefits. Prior to the PFML amendments, it was unclear how that waiting period would work. The law now states more clearly that the waiting period consists of “the first 7 consecutive calendar days” (rather than the previous version, “first 7 calendar days of leave”). The amendments further clarify that the waiting period starts when an eligible employee takes leave for the minimum claim duration of 8 hours. So, once an employee’s leave for a qualifying reason begins, he can start receiving benefits 7 calendar days later (if the leave continues beyond that) rather than having to take 7 days of leave before getting benefits.

And a reminder: No waiting period is required for leave for the birth or placement of a child.

Topping off PFML benefits

The original PFML law had a strange provision that prohibited employers from allowing employees to use other pay benefits during a PFML leave. This has been corrected to align more closely with PFML laws in other states. Now, once benefits start in 2020, an employer may offer “supplemental benefit payments” to an employee on family or medical leave in addition to any paid family or medical leave benefits the employee is receiving. Supplemental benefit payments include, but are not limited to, vacation, sick, or other paid time off. Employers are not required to offer supplemental pay benefits. If offered, the choice whether to use them lies with the employee – the employer cannot force the employee to use such benefits.

Voluntary plans

The PFML amendments affect voluntary plans as follows:

- Payment of benefits from only one plan. An employee may only receive payment of benefits for
  family leave, medical leave, or both from one approved plan at a time. If an employee is simultaneously
  covered by more than one approved plan, the employee will receive benefits only under the plan for
  which the employee has worked the most hours during the employee’s qualifying period. From the
  context of this amendment, it appears that this applies whether the simultaneously applicable plans
  are 2 voluntary plans or a voluntary plan and the state plan.

What is NOT clear (and we’ll be asking questions of the ESD) is whether the employee receives benefits limited to the amount attributed to that one plan only, or receives benefits equivalent to his entitlement under all applicable plans, but only paid by the plan of the employer for whom the employee has worked the most hours in the qualifying period. If that is the case (we hope not), how would the paying plan know how much is owed to the employee under other applicable plans?

- Waiver of voluntary plan eligibility. To be eligible for benefits under a voluntary plan, an employee
  must have worked both 820 hours within the state during the qualifying period, and 340 hours for
  the employee with the voluntary plan (the 340 hours can count toward/be a subset of the 820 hours).
  An employee who commences work with a new employer with a voluntary plan is eligible for benefits
  immediately if she was eligible under a voluntary plan with her previous employer. Otherwise, that
  340-hours-of-work for the new employer requirement applies before she can receive benefits.
  Pursuant to the new amendments, however, an employer with an approved voluntary plan may waive
  the 820 and/or 340 hours worked requirements, in whole or in part, to allow an employee to be
  immediately eligible for coverage under the employer’s voluntary plan.

Phase Three Final Rules.

A bit of background: States pass the laws that require employers to provide paid family and medical. The laws establish the basic structure of employee and employer rights and obligations. Then the state agency that will be responsible for implementation, administration, and enforcement of the law passes rules or regulations (same thing, basically) that fill in the details needed to administer the law and advise employers and employees how to comply.

The Washington Employment Security Department (ESD) designed a process to draft, revise, and finalize its PFML rules in six phases. The final version of the Phase Three rules have been released. These are important because they address the claims handling procedures, including:

Defining a claim year
Employee notice requirements (timing and content)
Process and timing for application of benefits
Requirements for documentation of the leave request (certification contents, timing, etc.)

The Phase Three rules are available here.

What Matrix is doing:

Employers can still file for approval of a voluntary plan at any time. Matrix has a template for
voluntary plans and a complete process for submitting plans for approval on behalf of clients.
Now that the Phase Three rules are finalized, Matrix is developing claims handling procedures,
employee communications, training for our employees, and other necessary processes. We will
be ready for claims management for our clients with voluntary plans when benefits are available,
starting January 1, 2020.
Matrix continues to pose questions to the Washington ESD for provisions of the law and rules that are
still not clear.

MATRIX WILL BE READY ON JANUARY 1, 2020. WILL YOU?

If you want to learn more contact us at ping@matrix.com or through your Account Manager.