© 2022 American Payroll Institute, Inc. Washington Long-Term Care Insurance Payroll Tax Delayed Until July 2023 The governor of Washington recently signed legislation delaying the collection of the employee-paid payroll tax (also called employee contributions or premiums) to fund the state’s long-term care (LTC) insurance plan until July 1, 2023 [H.B. 1732, L. 2022]. Employers were required to withhold the payroll tax from employees beginning January 1, 2022, but the governor instructed employers to delay doing so while legislation was pending (see PAYSTATE UPDATE, Issue 1, Vol. 24). Additional legislation was also signed by the governor that includes amendments to the LTC program [H.B. 1733, L. 2022]. Note that the original law remained in effect until the new laws were signed on January 27, 2022. That means that some employers made the decision to begin withholding the tax on January 1, 2022. Employers must refund payroll tax already collected On the WA Cares Fund website, there is information for employers. Employers are advised to stop withholding the payroll tax from employee earnings. For employers that did begin withholding employee contributions (the payroll tax) on January 1, employees should be reimbursed within 120 days of the date the tax was collected. Employers should continue to maintain copies of exemption approval letters from employees who already provided them. Additional guidance will be posted this month on the WA Cares Fund website. For updates, employers are encouraged to sign up for the WA Cares Fund mailing list and also to subscribe to the ESD’s employer newsletter. Payroll tax rate Employers will begin withholding 0.58% of a covered employee’s wages on July 1, 2023. Beginning January 1, 2026, and every two years after that date, the premium rate will be set by the pension funding council at a rate no greater than 0.58%. Amendments to LTC insurance program Benefits will be available under the program beginning July 1, 2026. Employees born before 1968 (who are considered closer to retirement) will be able to qualify for partial LTC insurance benefits on a prorated basis, if they have paid into the program for at least one year. Also, employees who live out of state and work in Washington, military spouses, workers on nonimmigrant visas, and certain veterans with disabilities will be able to opt out of the program, beginning January 1, 2023. Paid Leave for COVID-19 Vaccination, Side Effects, and Testing As the world continues to be affected by the COVID-19 pandemic, it is important for employers to be aware of any federal, state, and/or local laws, regulations, and guidance regarding whether employees must be paid for time spent receiving COVID-19-related vaccinations, recovering from side effects, undergoing testing, and in some situations traveling to and from off-site vaccination or testing locations. High court blocks OSHA’s vaccination mandate The U.S. Supreme Court recently issued a stay preventing implementation and enforcement of the emergency temporary standard (ETS) issued by the U.S. Department of Labor (DOL), Occupational Safety and Health Administration (OSHA), that would have required employers with more than 100 employees to mandate employee vaccination or weekly testing for COVID-19. Subsequently, OSHA withdrew the ETS. Federal guidance on paid time Even though OSHA withdrew its vaccination mandate, many employers have implemented policies requiring vaccination or testing. The DOL has published guidance related to when employers must pay employees for time (i.e., compensable work time) spent receiving and recovering from vaccination or getting tested for COVID-19 under the federal Fair Labor Standards Act (FLSA). If employees are required by their employer to be vaccinated against COVID-19 or submit to regular testing during normal working hours, they might need to be paid for the time spent waiting for and receiving medical attention at the employer’s direction or on the employer’s premises during normal working hours. Other laws may offer greater protections for workers, and employers must comply with all applicable federal, state, and local laws. If employees are required by their employer to undergo COVID-19 testing on their day off before being allowed to return to the jobsite, employers might be required to pay the employee for the time spent as compensable work time, particularly if the task is necessary for the work the employee is paid to do. For many employees, undergoing COVID-19 testing may be compensable because the testing is necessary for them to perform their jobs safely and effectively during the pandemic. State and local guidance Many state and local agencies have issued similar guidance about when employers must pay employees for time spent receiving and recovering from vaccination or testing under state wage and hour laws, paid sick leave February 7, 2022 Volume 24 Issue 3
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