Since the start of Washington’ paid family leave program, the Employment Security Department has processed more than 365,000 individual applications and has paid out more than 2.2 million weekly claims. (AP Photo/Ted S. Warren, file)

Since the start of Washington’ paid family leave program, the Employment Security Department has processed more than 365,000 individual applications and has paid out more than 2.2 million weekly claims. (AP Photo/Ted S. Warren, file)

Washington’s paid family leave program running short on cash

The program began in 2020, and in the first six weeks more than triple the amount of people expected applied.

By Rachel La Corte / Associated Press

OLYMPIA — Washington state’s paid family leave program could hit a deficit as early as March and there are concerns about long-term solvency following a significant increase in demand for the benefit that launched in 2020.

Under the law, eligible workers receive 12 weeks paid time off for the birth or adoption of a child or for a serious medical condition of the worker or the worker’s family member, or 16 weeks for a combination of both. An additional two weeks may be used if there is a serious health condition with a pregnancy.

Weekly benefits are calculated based on a percentage of the employee’s wages and the state’s weekly average wage — which is now $1,475 — though the weekly amount paid out is capped at $1,327.

The program saw benefit delays when it first went live in January 2020, right before the pandemic hit. In the first six weeks, more than triple the amount of people expected applied for the program, and the demand has continued to be high.

Since the start of the program, the Employment Security Department has processed more than 365,000 individual applications and has paid out more than 2.2 million weekly claims.

When premiums started in 2019, 0.4% of workers’ wages funded the program, with 63% paid by employees and 37% paid by employers. But that rate increased on Jan. 1 to .6% of workers’ wages, and employees’ share increased to 73%, with the remainder paid by employers. That’s because of a provision in the law that dictates how much of the rate will be allocated to employees is based on the ratio of family leave claims increasing compared to medical leave claims.

As of this week, more than 37% of total applications have been for bonding with a new child, over 50% were for someone dealing with a serious health condition, and nearly 12% have been for caring for a family member with a serious health condition.

Officials with the Employment Security Department told lawmakers at a Senate Ways & Means Committee hearing last week that since the cash influx from the tax rate increase won’t be available until the end of the first quarter, there are concerns about the fund’s solvency and said that a deficit was likely soon.

Under the law, an additional solvency surcharge of at least .1% could be ultimately be added to the current rate if the account balance falls below a certain range.

“Because of the popularity of the program and the amount of benefits paid we’ve seen the fund balance continue to go down,” Carole Holland, the chief financial office for the agency. “And so it does seem that it’s likely that we will have a cash deficit situation in March or April of 2022.”

Holland said it was difficult to know if the pandemic caused additional strain on the fund, since the benefit started right at the start of it, but lawmakers said they want additional details.

“I suspect that the huge hit that we took with COVID had a lot to do with the increase in paid family leave,” Democratic Sen. Karen Keiser said at the hearing. Keiser has introduced a bill that would lower the employee share from 73% to 42% without raising the rate on business, instead allocating state funds to make up the difference.

Holland said that the agency plans to bring an actuary on board in March to help refine projections and to provide options for potentially changing the rate structure. Also, the governor’s budget proposal last month included $82 million to allow a transfer to the paid family leave account if there’s a deficit “so that we can have continuity of benefit payments in the event that we run out of cash,” she said.

She said that ideally the state would have three months of reserves, something that does not exist at this point, but that the governor’s proposal would provide about a month buffer. Holland said the state paid about $90 million in benefits in November, and a little less in December.

According to the agency, as of Jan. 22 the program’s balance was $78.7 million.

Republican Sen. Lynda Wilson said it was disappointing “how we didn’t anticipate what could happen.”

“I think we really do need to know those details on how COVID affected this,” she said. “Because if this is ongoing, this program isn’t sustainable. We’ve got real problems.”

Talk to us

More in Northwest

FILE - Randy Weaver, the object of the Ruby Ridge siege, visits with the media at the main FBI roadblock outside the Freemen compound in Montana on April 27, 1996. Weaver, patriarch of a family that were involved in an 11-day Idaho standoff in 1992 with federal agents that left three people dead and served as a spark for the growth of anti-government extremists, has died at the age of 74. His death was announced Thursday, May 12, 2022, in a Facebook post by daughter Sara Weaver, who lives near Kalispell, Montana. (AP Photo/Jim Mone, File)
Randy Weaver, participant in Ruby Ridge standoff, dies at 74

The 11-day standoff in the Idaho Panhandle mountains transfixed the nation in August of 1992.

FILE - Washington Attorney General Bob Ferguson speaks March 23, 2022, at the Capitol in Olympia, Wash. Months into a complex trial over their role in flooding Washington with highly addictive painkillers, the nation's three largest opioid distributors have agreed to pay the state $518 million. Ferguson announced the deal Tuesday, May 3, 2022. (AP Photo/Ted S. Warren, File)
DNA from 372 state sex offenders added to national database

Officials have been unable to collect samples from some offenders, including three in Snohomish County.

Andrew Cain Kristovich (Snohomish County Sheriff's Office)
Oregon fugitive with Snohomish County ties arrested in Nevada

Andrew Cain Kristovich escaped from a federal prison camp in April. He was considered armed and dangerous.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to keep canceling flights at high level for weeks

Flight cancellations since April will continue. The chaos has been damaging for Seattle’s hometown airline.

Barbara Williams, center, holds an umbrella for her mother, tribal chair Cecile Hansen, right, as they prepare to join other members of the Duwamish Indian Tribe in performing an "honor song" Wednesday, Feb. 27, 2008 near a location in Seattle where bones were found during construction activities near the Pike Place Market. The song was performed because the tribe felt at the time that the remains could have been from an ancient member of the tribe, but city authorities said later in the day that the remains appeared to have been from a small animal. (AP Photo/Ted S. Warren)
Duwamish Tribe sues again for federal recognition

Tthe lawsuit demands the court set aside the denial of recognition in 2015 by the Obama administration.

A pod of transient orcas, known as T124As, surfacing near Tacoma. (Craig Craker/Orca Network)
Sightings of mammal-eating orcas increasing in Puget Sound

The killer whales enjoy a diet of harbor seals, sea lions, porpoises and the occasional bird or squid.

FILE - Bill Gates discusses his book "How to Prevent the Next Pandemic" at the 92nd Street Y on May 3, 2022, in New York. Microsoft co-founder and billionaire philanthropist Bill Gates posted on Twitter on Tuesday, May 10, 2022, that he tested positive for COVID-19. He said he was experiencing mild symptoms and was following the experts' advice by isolating until he is healthy again. (Photo by Evan Agostini/Invision/AP, File)
Bill Gates says he has COVID, experiencing mild symptoms

The billionaire philanthropist said he will isolate until he is again healthy.

FILE - Idaho Lt. Gov. Janice McGeachin enters the house chambers at the state Capitol building on Jan. 10, 2022 in Boise, Idaho. McGeachin, a GOP candidate for governor, on Monday, May 9, 2022, called on incumbent Republican Gov. Brad Little to call a special session to eliminate rape and incest as legal exceptions to Idaho's abortion law. The law would go into effect if the U.S. Supreme Court overturns Roe v. Wade. (AP Photo/Otto Kitsinger, File)
Idaho lieutenant governor wants harshest U.S. abortion ban

Janice McGeachin is angling for state lawmakers to eliminate exceptions for rape and incest.

Crews finish clearing the roadway on SR 20. (Washington State Department of Transportation)
The North Cascades Highway is set to open Tuesday

Officials warn that it’s still wintery and avalanche potential remains in the backcountry.

50 dams in state — including 4 in Snohomish County — need repairs

Deferred maintenance and the changing climate may play a role in the dams’ deteriorating conditions.

(U.S. Department of Agriculture)
State’s 2nd outbreak of bird flu confirmed in Spokane County

Last week the disease was found in Pacific County, also in a backyard flock of chickens.

Tina Podlodowski, chair of the Washington State Democratic Party, is making a case for Washington to be among the first five states to host a presidential primary in 2024. (Washington State Democrats)
Washington Democrats seek to host early presidential primary

A letter of intent was sent to the Democratic National Committee’s Rules and Bylaws Committee.