Washington State
House of Representatives
Office of Program Research
BILL
ANALYSIS
Labor & Workplace Standards Committee
2SSB 5649
Brief Description: Modifying the Washington state paid family and medical leave act.
Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Robinson, Conway, Lovick, Randall and Wilson, C.).
Brief Summary of Second Substitute Bill
  • Allows the use of family leave under Paid Family and Medical Leave (PFML) after the death of certain family members.
  • Defaults the type of leave taken after giving birth to be medical leave, unless requested otherwise, without certification needed.
  • Expires the collective bargaining agreement exception.
  • Requires the Employment Security Department (ESD) to publish a list of employers with approved voluntary plans.
  • Creates the Office of Actuarial Services within ESD and requires:  (1) short- and long-term actuarial assessments on the financial condition of the PFML program; (2) reports to the PFML Advisory Committee and to the Legislature; (3) through the Office of Financial Management (OFM), a separately contracted actuarial evaluation and report to the Legislature; and (4) assistance from the State Actuary as requested by ESD or OFM.
  • Creates a legislative task force on PFML program premiums and requires a Joint Legislative Audit and Review Committee report.
Hearing Date: 2/18/22
Staff: Lily Smith (786-7175).
Background:

Paid Family and Medical Leave Overview.
The Paid Family and Medical Leave (PFML) program provides partial wage replacement to employees on leave for specified family and medical reasons.  The Employment Security Department (ESD) administers the PFML program. 

 

Qualified employees are eligible for the following maximum leave amounts per calendar year:

  • up to 12 weeks of paid family or medical leave;
  • up to 16 weeks of leave when family and medical leave are used in combination; and
  • an additional two weeks of leave due to pregnancy complications.

 

Available Leave.
Paid family leave benefits are provided when an employee is bonding after the birth or placement of a child under the age of 18, because of a family member's serious health condition, or for a military exigency.
 
Paid medical leave benefits are provided for an employee's own serious health condition which includes, among other circumstances, any period of incapacity due to pregnancy or for prenatal care.
 
When applying for leave based on a serious health condition, pregnancy, or birth of a child, ESD requires certification of the condition, with information provided by the employee and the health care provider.

 

Collective Bargaining Agreements.
The PFML program provides that parties to a collective bargaining agreement (CBA) in existence on October 19, 2017:

  • are exempted from the program unless and until the existing CBA is reopened, renegotiated by the parties, or expires; and
  • are not required to reopen negotiations. 

 

Confidential Records.
With some defined exceptions, ESD must keep information regarding individuals and employers under the PFML program private and confidential.  The ESD does not publicly list employers that have approved voluntary plans under the PFML program.
 
Joint Legislative Audit and Review Committee.
The Joint Legislative Audit and Review Committee (JLARC) is composed of an equal number of House of Representatives and Senate members, Democrats and Republicans. The JLARC nonpartisan staff conduct performance audits, program evaluations, special studies, and sunset reviews.

Summary of Bill:

Available Leave.
Paid family leave benefits are provided during the seven calendar days following the death of the family member for whom the employee would have qualified for medical leave for the birth of their child; or would have qualified for family leave to bond with their child during the first 12 months after birth, or during the first 12 months after the placement of a child under age 18 with the employee.
 
Any paid leave benefits used in the first 6 weeks after childbirth, when eligibility is based on pregnancy or prenatal care, must be medical leave unless the employee chooses to use family leave.  Certification of a serious health condition is not required for this use of medical leave.
 
Collective Bargaining Agreements
The section exempting pre-existing CBAs expires December 31, 2023.
 
Confidential Records
The ESD must publish on its website a current list of all employers that have approved voluntary plans under the PFML program.

 

Actuarial Services, Reports

Calendar Year 2022. 
The OFM must enter into a contract with a public or private entity for actuarial services to provide a report to the Legislature by October 1, 2022, on the following:

  • the experience and financial condition of the PFML account;
  • recommendations to modify the premium provisions in the PFML program to maintain long-term stability and solvency of the account; and
  • a comparison of PFML premium provisions with similar provisions in other states with both paid medical and family leave insurance.

 
This contract is exempt from competitive procurement requirements.  The OFM and ESD may request assistance from the State Actuary, including forming a data-sharing agreement between the State Actuary and ESD for PFML actuarial purposes.


The Office of Actuarial Services (Office) is established within ESD. 


Calendar Year 2023. 
Beginning January 1, 2023, the Office must report annually, by November 1, to the PFML Advisory Committee (Advisory Committee) on the:

  • financial condition of the PFML account; and
  • lowest future premium rates necessary to maintain account solvency in the next four years while limiting premium rate fluctuations.

 

The report must be submitted to the Legislature in calendar years 2023 through 2028.  Beginning October 1, 2023, ESD must report quarterly to the Advisory Committee on premium collections, benefit payments, the PFML account balance, and other program expenditures.


Legislative Task Force
A legislative task force on PFML program premiums (Task Force) is created with members from both chambers and parties of the Legislature, the voting members of the Advisory Committee, and Governor appointees representing the Governor's Office and ESD.  Staff support for the Task Force must be provided by nonpartisan legislative staff. 
 
The Task Force must review the reports to the Legislature and make recommendations for legislative changes to the premium provisions to ensure the lowest premium rates necessary to maintain solvency while limiting fluctuations in rates. 
 
The Task Force must convene its first meeting by November 4, 2022, and issue a final report to the Governor and Legislature by December 30, 2022.
 
Joint Legislative Audit and Review Committee
By October 1, 2024, JLARC must conduct a performance audit analyzing the implementation of the PFML program.  The analysis must include, at a minimum, the following components:

  • evaluation of ESD's decision making and communication;
  • determination of whether current methods are the most efficient available, improve service delivery, meet the needs of current and future workers, and are measurable;
  • evaluation of whether ESD prepares financial information in accordance with generally accepted accounting principles;
  • evaluation of the PFML account solvency; and
  • recommendations on administrative and legislative changes to improve PFML program efficiency while maintaining quality service.

 

Other
Beginning July 1, 2022, and until 12 months after the end of the COVID state of emergency, ESD must ask PFML program applicants whether their requested leave is related to the COVID-19 pandemic.  Such disclosures are limited to monitoring potential impacts on the solvency and stability of the PFML account and subject to certain privacy and data sharing provisions.

Appropriation: None.
Fiscal Note: Available.
Effective Date: This bill takes effect 90 days after adjournment of the session in which the bill is passed, except for section 8, relating to contracting for actuarial services, which contains an emergency clause and takes effect immediately.