Washington Governor Clarifies That Employers Are Still ‘Legally Obligated’ to Pay Premiums Under the Washington Cares Act

On December 22, 2021, Governor Jay Inslee sent a letter to Washington’s Employment Security Department (ESD) ordering it to not collect premiums under the Washington Cares Fund program until the legislature addresses some of the law’s issues. The letter acknowledged that “legislative leadership has strongly encouraged the employer community to pause collection of premiums from employees.”

Governor Inslee acknowledged that,

[b]ased on the Legislature’s stated commitment, employers must now choose whether to begin collecting premiums on January 1, 2022 according to the current law, and returning the premiums to workers following a change in the law, or delay collection in anticipation of this legislative change. As you know, if the Legislature fails to change the law, employers will still be legally obligated to pay the full amount owed to your agency.

This letter followed the December 17, 2021, joint statement by Governor Inslee, Senate Majority Leader Andy Billig, and House Speaker Laurie Jinkins announcing that the premium assessment under the Washington Cares Fund would be delayed.

What Does This Mean for Employers With Washington Employees?

On December 23, 2021, Governor Inslee further clarified in a press release that if the legislature fails to change the law, “employers will still be legally obligated to pay the full amount owed to ESD to begin the long-term care program.” He added that “[a]s an employer, the state of Washington is following the law and will have to begin collecting money from state employee paychecks as of January 1st.” Based on this latest clarification, employers are expected to begin long term care premium deductions on January 1, 2022 to avoid potential costs if the legislature fails to amend the law.

Ogletree Deakins will continue to monitor and report on developments with respect to the Washington Cares Fund and will post updates on the firm’s Employee Benefits and Executive Compensation, Wage and Hour, and Washington blogs as additional information becomes available. Important information for employers is also available via the firm’s podcast and webinar programs.