2019 Brings New Payroll Tax and Increase to Minimum Wage

Paid Family and Medical Leave

Starting in 2020, Washington will be the fifth state in the nation to offer paid family and medical leave benefits.  This benefit offers partially paid leave to care for yourself or a loved one in times of serious illness or injury, to bond with a new child joining your home through birth, adoption or foster placement, and for certain military-connected events if you have a family member in active duty service.  This isn’t like paid sick leave; you will file your claim with the Employment Security Department (ESD), and your payment will come from ESD.  Typically, you’ll have access to up to 12 weeks of paid leave.

Premium collection starts on Jan 1, 2019. In 2019, the premium is 0.4% of wages, or $3.85 per week for someone making $50,000 a year.  Employers can either pay the full premium or opt to withhold a portion of the premium from their employees.  Employers who choose to withhold premiums from their employees may withhold up to 63 percent of the total premium, or $2.44 per week for an employee making $50,000 annually.  The employer is responsible for paying the other 37 percent.  Businesses with fewer than 50 employees are exempt from the employer portion of the premium but must still collect or opt to pay the employee portion of the premium.

If we process your payroll, we will assume you are withholding the premium amount from your employee’s checks.  If you, as the employer, would like to cover the cost, please contact us.  Attached is an insert you can give to your employees, so they are aware of this new deduction.  You can learn more about the program at www.paidleave.wa.gov/employers or contact us with questions. 

Minimum Wage Rate Increase

Beginning in 2019, the minimum wage will increase to $12.00 per hour.  (Please keep in mind the rate increases to $13.50 per hour in 2020.)