By: Jim Cline and Eamon McCleery
The start of the new year also marks the partial implementation of Washington’s New Paid Family and Medical Leave program. Think of that program as a mandatory long-term leave insurance program adopted by the Washington State Legislature for most employers, public and private. Throughout 2019, the fund for the program will be built up with employer and employee payroll contributions. Starting in 2020, the program will use those accumulated funds to pay employees a portion of their wages while they are away on a qualifying long-term leave.
There are two types of leave that employees can take under the new law: family leave to allow employees time off to care and bond with a new baby and medical leave to allow employees to take time off for their medically-related leave or to care for a sick family member. Leave will be for up to 12 weeks and may be extended to 18 weeks total under some circumstances. During that time, employees will receive a partial wage-replacement benefit from the State of Washington.
To pay for the program, the state will assess a premium in the amount of 0.04% of an employee’s monthly wages. Both the employer and the employee will pay a portion of the premium. During the first two years of the program, the employer must pay for at least 37% of the premium amount. The employer may deduct the remaining 63% of the premium from the employee’s paycheck. The law also provides, however, that “[a]n employer may elect to pay all or any portion of the employee’s share of the premium for family leave or medical leave benefits, or both.” That means that an employer has the option of picking up 100% of the premium.
By far the most common question we have received from our clients is whether employers must bargain before beginning wage withholdings. Our firm’s assessment is that—because the law does not mandate that an employer deduct a portion of the premium from its employees’ paychecks and wage withholdings impact a mandatory subject of bargaining—public employers are likely required to bargain before beginning wage deductions to cover paid family and medical leave premiums. Furthermore, there is no provision in the paid family and medical leave law that says that public sector collective bargaining laws do not apply.
The law also seems to anticipate that there will be bargaining between employers and labor organizations. RCW 50A.04.235 provides that the “rights and responsibilities” of the law do not apply to “any party to a collective bargaining agreement in existence on October 19, 2017,” until that agreement is “reopened or renegotiated by the parties or expires.” That means that if your current contract was “in existence” on October of 2017, neither your employer or your bargaining unit members are required to pay any premiums until your contract expires. The most likely purpose for that grace period, is that the Legislature wanted to give the parties to collective bargaining agreements time to bargain over the implementation of the new law.
It should be noted that the Employment Security Department, which is administering the new law, has reached a different conclusion. The department has concluded that the public bargaining laws do not apply. That conclusion, however, has not been tested in Court. Further, for the reasons mentioned above, our firm believes that that conclusion is seriously flawed and would not ultimately be sustained by PERC or the courts.
In practice, it may be difficult to convince your employers to pick up all or part of the employees’ share of the premium. Most employers will predictably take the position that the paid family and medical leave law is a new mandate on them and that it makes sense for the employer and the employees to share the law’s costs. There is little support in “comparability data” for shifting the full cost to the employer.
But, depending on your situation, there may still be good reasons to demand to bargain your employer’s implementation of the new law. For example, if you are currently in contract negotiations, it probably makes sense to demand to bargain the impact of the law as part of your overall wage package. In other words, when presenting your wage proposal, it will be important to remember that approximately 0.025% of any wage increase you receive will be deducted to pay for family and medical leave premiums.
Another factor to consider is that the law does allow employers to develop their own voluntary family and medical leave plans. Thus, if your employer already provides fairly robust paid family and medical leave benefits, your employer may be able to avoid having to pay premiums to the state by making small adjustments to their existing program. Demanding to bargain the implementation of the new law allows you to make sure your employer knows about the option of creating a voluntary plan and to press your employer to do the necessary paperwork to create a compliant voluntary plan and to obtain a premium waiver. Our firm suspects that in many cases creating a voluntary plan will be the most cost-effective solution for many public employers. One limitation of such programs though, is that they have to be adopted employer-wide, not just for your bargaining units.
As with any change in the law affecting employee benefits, our firm strongly suggests that you have a conversation with your membership. For some bargaining units, access to the new benefit will be worth the small monthly cost of the program. For others, membership may feel that there is little benefit in the new program. When deciding whether or not to demand to bargain over the implementation of the paid family and medical leave law, membership input will be an important factor. As we get closer to 2020, we will offer more explanation as to why benefits are extended under the new law and how those coordinate with existing paid leave benefits. In the immediate term, please review your bargaining unit situation and determine whether you should file one of the attached bargaining demand letters. If you have further questions about how the new law will impact your bargaining unit, please do not hesitate to contact our firm.
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