On January 27, two bills were passed by the Washington state legislature pertaining to the WA Cares Fund. These bills prolonged the start date for withholding premiums and included additional rules regarding eligibility and opting out.
A focal point of these bills is the extended start date for collecting the tax from employees. The new start date for the tax is July 1, 2023. Employers are required to refund any premiums withheld in 2022 to employees. They will have 120 days (4 months) from the date of collection to refund these amounts. If premiums have already been submitted to the employment security department, the ESD will have 120 days to refund this to the employer, to be paid back to the employee. Payroll will need to be revised to stop withholding the premiums as soon as possible. Businesses are advised to continue maintaining exemption waivers received from employees.
The updated law allows for workers aged 54 and older (born before 1968) to qualify for partial benefits on a pro-rated basis. The individual must have paid into the program for a minimum of one year to receive benefits. This change is aimed at benefiting individuals closer to retirement that would not have qualified for the benefits under the original rules.
There have also been changes to expand those eligible to opt out from the program. The following individuals will now have the option to apply for exemption:
- Workers who reside out of the state, but work in Washington;
- Military spouses;
- Workers on non-immigrant visas;
- Veterans with certain disabilities.
There is no guidance currently on how or how long these individuals will have to apply for exempt status.
The Washington Employment Security Department is expected to release additional guidance and clarification on these changes this month. We will be sure to provide updates as these are issued. If you have any questions on how this affects you and/or your business, please contact our office.