On October 20, 2022, the Washington Employment Security Department (ESD) announced that beginning in 2023 it is adding a 0.2% solvency surcharge to the current PFML premiums, raising the 2023 premium rate to 0.8%. This premium rate will be applied to employee income up to the Social Security premium limit, which in 2023 will be $160,200. The maximum possible premium in 2023 will be $1,281.60.
Of that premium, employees will pay 72.76% (up to a total of $932.49). Employers with 50 or more Washington employees will pay 27.24% of the premium (or up to a total of $349.11). Employers with fewer than 50 Washington employees are not required to pay any premium, but are required to deduct the employee’s share of the premium from the employee’s gross pay (excluding tips).
Employers who fail to collect the correct amount of premiums from their employees are not permitted to recover the uncollected premium amounts from future paychecks. Instead, the employer has to pay the amounts it failed to collect.
Employers should notify their employees prior to January 2023 that the PFML premium rate is increasing and the deductions from their pay will be increasing as a result.
Currently, the PFML account is balance is approximately a $20 million deficit. ESD estimates that the 2023 premium increase will result in the PFML account ending 2023 with a $6-8 million positive balance, assuming the legislature makes no changes during the 2023 legislative session. However, the legislature is expected to enact changes to the premium rate structure in the upcoming session. We will keep you posted on any legislative changes.
The legal issues impacting workplaces are ever changing (Employment Law in Motion!) and since publication, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.