On December 23, 2021, Governor Jay Inslee clarified that employer deductions from employees’ wages under Washington’s Long Term Care Act are required by law to begin January 1, 2022, except for workers who purchased their own insurance and successfully applied for an exemption. Just a few days earlier, he had announced that he was “pausing” the program until April 2022, with informal support from legislative leaders. In his latest statement, the governor acknowledged he doesn’t have the authority to make changes to the Act and only the Legislature can do so. He stated he hopes the Legislature will modify the Act early in the 2022 legislative session.
The governor’s earlier announcement directing the Employment Security Department (ESD) to pause collections of insurance premiums under the Act until April 2022 led to confusion as to whether Washington employers were still required to deduct the premiums from employees’ wages beginning January 1, 2022. As we previously reported, under the current version of the Act employers aren’t required to forward employees’ premiums to ESD until April 2022 anyway.
Tips: You should begin making deductions from employees’ wages beginning with paychecks for any hours worked starting on January 1, 2022. This may require further direction to your payroll provider if you contract with a third-party administrator for such services. If you decide not to make such deductions based on the hope that the state legislature will pass a law delaying the January 1 effective date, be aware of the risks in doing so. The law currently doesn’t allow employers to make retroactive deductions from employees’ wages to cover these insurance premiums. If the legislature fails to amend the law, the company may be required to pay the premiums out of its own pocket in order to send the proper amount to ESD by April 30, 2022. If the legislature makes changes to the Act, we will notify members. Check back on the Washington Cares Fund website for additional updates and consult your tax adviser for recommendations on how to implement the payroll deductions for this long-term care insurance premium.
