[atlas:bill]

AN ACT Relating to family leave insurance; amending RCW 49.78.005; adding a new chapter to Title 49 RCW; creating a new section; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that, although family leave laws have assisted individuals to balance the demands of the workplace with their family responsibilities, more needs to be done to achieve the goals of work force stability and economic security. In particular, the legislature finds that many individuals do not have access to family leave laws, and those who do may not be in a financial position to take family leave that is unpaid, and that employer-paid benefits, including family leave and disability benefits, meet only a relatively small part of this need. The legislature declares it to be in the public interest to establish a program that: (1) Provides additional options for individuals to use in balancing work and family responsibilities; (2) is in addition to those programs offered by employers; (3) provides limited income support for a reasonable period while an individual is away from work on family leave; and (4) reduces the impact on state income-support programs by increasing an individual's ability to provide care-giving services for family members while maintaining an employment relationship.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Application year" means the twelve-month period beginning on the first day of the calendar week in which an individual files an application for family leave insurance benefits and, thereafter, the twelve-month period beginning with the first day of the calendar week in which the individual next files an application for family leave insurance benefits after the expiration of the individual's last preceding application year.

(2) "Calendar quarter" means the same as the definition in RCW 50.04.050.

(3) "Child" means a person who is:

(a) A biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis; and

(b)(i) Under eighteen years of age; or

(ii) Eighteen years of age or older and incapable of self-care because of a mental or physical disability.

(4) "Department" means the department of labor and industries.

(5) "Director" means the director of the department of labor and industries.

(6) "Employer" means: (a) The same as the definition in RCW 50.04.080; and (b) the state and its political subdivisions.

(7) "Employment" means the same as the definition in RCW 50.04.100.

(8) "Family leave" means leave from employment:

(a) To care for a newborn child or adopted or foster child of the individual when leave is completed within twelve months after the birth or the placement for adoption or foster care, as applicable;

(b) To care for the individual's family member who has a serious health condition; or

(c) Because of the individual's serious health condition that makes the individual unable to perform the functions of the individual's position.

(9) "Family leave insurance benefits" means the benefits payable under sections 7 and 8 of this act.

(10) "Family member" means a child, spouse, or the parent of the individual or individual's spouse.

(11) "Health care provider" means a person licensed as a physician under chapter 18.71 RCW or an osteopathic physician and surgeon under chapter 18.57 RCW.

(12) "Parent" means a biological or adoptive parent, a stepparent, or an individual who stood in loco parentis to an individual or an individual's spouse when the individual or individual's spouse was a child.

(13) "Premium" and/or "premiums" means taxes, which are the money payments required by this chapter to be made to the department for the family leave insurance account under section 23 of this act.

(14) "Qualifying year" means the first four of the last five completed calendar quarters or the last four completed calendar quarters immediately preceding the first day of the individual's application year.

(15) "Regularly working" means the average number of hours per work week that an individual worked in the last completed calendar quarter.

(16) "Serious health condition" means an illness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice, or residential medical care facility, or continuing treatment by a health care provider.

NEW SECTION. Sec. 3. (1) The department shall establish and administer a family leave insurance program and pay family leave insurance benefits as specified in this chapter.

(2) The department shall establish procedures and forms for filing claims for benefits under this chapter. The department shall notify the employer within two business days of a claim being filed under section 4 of this act.

(3) The department may require that a claim for benefits under this chapter be supported by a certification issued by the health care provider providing health care to the individual or individual's family member, as applicable.

(4) Information contained in the files and records pertaining to an individual under this chapter are confidential and not open to public inspection, other than to public employees in the performance of their official duties. However, the individual or an authorized representative of an individual may review the records or receive specific information from the records on the presentation of the signed authorization of the individual. An employer or the employer's duly authorized representative may review the records of an individual employed by the employer in connection with a pending claim. At the department's discretion, other persons may review records when such persons are rendering assistance to the department at any stage of the proceedings on any matter pertaining to the administration of this chapter.

NEW SECTION. Sec. 4. Family leave insurance benefits are payable to an individual during a period in which the individual is on unpaid family leave if the individual:

(1) Files a claim for benefits as required by rules adopted by the director;

(2) Has been employed for at least five hundred twenty hours in employment during the individual's qualifying year;

(3) Establishes an application year. An application year may not be established if the qualifying year includes hours worked before establishment of a previous application year;

(4) Consents to the disclosure of information or records deemed private and confidential under chapter 50.13 RCW. Initial disclosure of this information and these records by the employment security department to the department is solely for purposes related to the administration of this chapter. Further disclosure of this information or these records is subject to sections 3(4) and 14(2)(b) of this act;

(5) Discloses whether or not he or she owes child support obligations as defined in RCW 50.40.050; and

(6) Documents that he or she has provided the employer from whom family leave is to be taken with written notice of the individual's intention to take family leave as follows:

(a) If the necessity for family leave defined in section 2(8)(a) of this act was foreseeable based on an expected birth or placement, notice was given at least thirty days before the family leave was to begin, stating the anticipated starting date and ending date of the family leave. However, if the date of birth or placement required family leave to begin in less than thirty days, as much notice as practicable was given; and

(b) If the necessity for family leave defined in section 2(8) (b) or (c) of this act was foreseeable based on planned medical treatment:

(i) Notice was given at least thirty days before the family leave was to begin, stating the anticipated starting date and ending date of the family leave. However, if the date of the treatment required family leave to begin in less than thirty days, as much notice as practicable was given; and

(ii) The individual made reasonable efforts to schedule the treatment so as not to disrupt unduly the operations of the employer, subject to the approval of the health care provider of the individual or family member, as applicable.

NEW SECTION. Sec. 5. An individual is not disqualified for family leave insurance benefits for any week with respect to which the department finds that there is a strike or lockout at the factory, establishment, or other premises at which the individual is or was last employed.

NEW SECTION. Sec. 6. An individual is disqualified from family leave insurance benefits beginning with the first day of the calendar week, and continuing for the next fifty-two consecutive weeks, in which the individual:

(1) Willfully made a false statement or misrepresentation regarding a material fact, or willfully failed to report a material fact, to obtain benefits under this chapter; or

(2) With respect to family leave defined in section 2(8)(c) of this act is suffering from:

(a) A willful and intentional self-inflicted serious health condition; or

(b) A serious health condition resulting from the individual's perpetration of a gross misdemeanor or felony.

NEW SECTION. Sec. 7. (1) The maximum number of weeks during which family leave insurance benefits are payable in an application year is five weeks. However, benefits are not payable for the first five work days of family leave taken in an application year with respect to a particular type of family leave, whether the family leave is employer paid or unpaid.

(2)(a) The first payment of benefits must be made to an individual within two weeks after the claim is filed or the family leave began, whichever is later, and subsequent payments must be made bimonthly thereafter.

(b) If an individual dies before he or she receives a payment of benefits, the payment shall be made to the surviving spouse or the child or children if there is no surviving spouse. If there is no surviving spouse and no child or children, the payment shall be made by the department and distributed consistent with the terms of the decedent's will or, if the decedent dies intestate, consistent with the terms of RCW 11.04.015.

(3) Benefits are not payable and waiting period credits are not earned under this chapter for any weeks in which compensation is paid or payable to the individual under Title 50 RCW or similar law of another state or the United States, or under RCW 51.32.060 or 51.32.090 or another state or federal workers' compensation law.

NEW SECTION. Sec. 8. Family leave insurance benefits shall be paid as follows:

(1) For family leave beginning before January 1, 2003, benefits shall be two hundred fifty dollars per week for an individual who at the time of beginning family leave was regularly working forty hours or more per week or a prorated amount based on the weekly hours regularly worked for an individual regularly working less than forty hours per week. By December 31, 2003, and by each subsequent December 31st, the department shall calculate to the nearest dollar an adjusted maximum benefit to account for inflation using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the twelve completed calendar months before each December 31st as calculated by the United States department of labor. The adjusted maximum benefit takes effect for family leave beginning after the relevant December 31st.

(2) If an individual who at the time of beginning family leave was regularly working forty hours or more per week is on family leave for less than forty hours but at least eight hours in a week, the individual's weekly payment shall be .025 times the maximum benefit times the number of hours of family leave taken in the week. Benefits are not payable for less than eight hours of family leave taken in a week.

(3) If an individual discloses that he or she owes child support obligations under section 4 of this act and the department determines that the individual is eligible for benefits, the department shall notify the applicable state or local child support enforcement agency and deduct and withhold an amount from benefits in a manner consistent with RCW 50.40.050.

(4) If an individual elects to have federal income tax deducted and withheld from benefits, the department shall deduct and withhold the amount specified in the federal internal revenue code in a manner consistent with section 10 of this act.

NEW SECTION. Sec. 9. (1) Nothing in this chapter is to be construed to limit an individual's right to leave from employment under other laws or employer policy, as applicable, except as provided in this chapter.

(2) If an employer provides paid family leave or an individual has purchased disability insurance, the individual may elect whether first to use the paid family leave or to receive family leave insurance benefits under this chapter. An individual may not be required to use the individual's paid family leave to which the individual is otherwise entitled before receiving benefits under this chapter.

(3)(a) An employer may require that family leave for which an individual is receiving or received benefits under this chapter be taken concurrently with leave under the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6), chapter 49.78 RCW, or other applicable federal, state, or local law, except that:

(i) Family leave taken for sickness or temporary disability because of pregnancy or childbirth is in addition to leave under the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6), chapter 49.78 RCW, or other applicable federal, state, or local law.

(ii) Family leave during which the individual is receiving or received benefits under this chapter is in addition to leave from employment during which benefits are paid or are payable under Title 51 RCW or a similar federal or state workers' compensation law and that is designated as leave under the federal family and medical leave act of 1993.

(b) If an employer requires that family leave for which an individual is receiving or received benefits under this chapter be taken concurrently with leave under the federal family and medical leave act, chapter 49.78 RCW, or other applicable federal, state, or local law, the employer must give all individuals in its employ written notice of the requirement.

NEW SECTION. Sec. 10. (1) The department must advise an individual filing a new claim for family leave insurance benefits, at the time of filing such claim, that:

(a) Benefits are subject to federal income tax;

(b) Requirements exist pertaining to estimated tax payments;

(c) The individual may elect to have federal income tax deducted and withheld from the individual's payment of benefits at the amount specified in the federal internal revenue code; and

(d) The individual is permitted to change a previously elected withholding status.

(2) Amounts deducted and withheld from benefits must remain in the family leave insurance account until transferred to the federal taxing authority as a payment of income tax.

(3) The director shall follow all procedures specified by the federal internal revenue service pertaining to the deducting and withholding of income tax.

NEW SECTION. Sec. 11. If family leave insurance benefits are paid erroneously or as a result of fraud, or if a claim for family leave benefits is rejected after benefits are paid, RCW 51.32.240 shall apply, except that appeals are governed by section 15 of this act, and the department shall seek repayment of benefits from the recipient.

NEW SECTION. Sec. 12. (1) The right of an individual who receives family leave insurance benefits under this chapter to be returned to his or her position at the established ending date of family leave is governed by RCW 49.78.070. However, this entitlement is supplementary to a federal, state, or local law establishing a similar entitlement, and if a federal, state, or local law applying to the individual establishes a more favorable right to return to his or her position than is established under this section, the application of that federal, state, or local law is not affected by this section.

(2) An individual who has received benefits under this chapter shall not lose any employment benefit, including seniority or pension rights, accrued before the date that family leave commenced. However, this chapter does not entitle an individual to accrue employment benefits during a period of family leave or to a right, benefit, or position of employment other than a right, benefit, or position to which the individual would have been entitled had the individual not taken family leave.

(3) This section shall be enforced as provided in RCW 49.78.005(2)(b).

NEW SECTION. Sec. 13. (1) An employer of individuals not covered by this chapter or a self-employed person, including a sole proprietor, partner, or joint venturer, may elect coverage under the family leave insurance program for all individuals in its employ for an initial period of not less than three years or a subsequent period of not less than one year immediately following another period of coverage. The employer or self-employed person must file a notice of election in writing with the director, as required by the department. The election becomes effective on the date of filing the notice.

(2) An employer or self-employed person who has elected coverage may withdraw from coverage within thirty days after the end of the three-year period of coverage, or at such other times as the director may prescribe by rule, by filing written notice with the director, such withdrawal to take effect not sooner than thirty days after the filing of the notice.

(3) The department may cancel elective coverage if the employer or self-employed person fails to make required payments or reports. The department may collect due and unpaid premiums and may levy an additional premium for the remainder of the period of coverage. The cancellation shall be effective no later than thirty days from the date of the notice in writing advising the employer or self-employed person of the cancellation.

NEW SECTION. Sec. 14. (1) In the form and at the times specified by the director, an employer shall make reports, furnish information, and remit premiums as required by section 21 of this act to the department. If the employer is a temporary help company that provides employees on a temporary basis to its customers, the temporary help company is considered the employer for purposes of this section. However, if the temporary help company fails to remit the required premiums, the customer to whom the employees were provided is liable for paying the premiums.

(2)(a) An employer must keep at his or her place of business a record of employment from which the information needed by the department for purposes of this chapter may be obtained. This record shall at all times be open to the inspection of the director or department employees designated by the director.

(b) Information obtained from employer records under this chapter is confidential and not open to public inspection, other than to public employees in the performance of their official duties. However, an interested party shall be supplied with information from employer records to the extent necessary for the proper presentation of the case in question. An employer may authorize inspection of its records by written consent.

(3) An employer is subject to the provisions of Title 51 RCW relating to the assessment and collection of industrial insurance premiums, including but not limited to penalties, interest, and department lien rights and collection remedies if the employer:

(a) Fails to make the required reports, or fails to remit the full amount of the premiums when due; or

(b) Willfully makes a false statement or misrepresentation regarding a material fact, or willfully fails to report a material fact, to avoid making the required reports or remitting the full amount of the premiums when due.

(4) Notwithstanding subsection (3) of this section, appeals are governed by section 15 of this act.

NEW SECTION. Sec. 15. (1) A person aggrieved by a decision of the department under this chapter must file a notice of appeal with the director, by mail or personally, within thirty days after the date on which a copy of the department's decision was communicated to the person. Upon receipt of the notice of appeal, the director shall request the assignment of an administrative law judge in accordance with chapter 34.05 RCW to conduct a hearing and issue a proposed decision and order. The hearing shall be conducted in accordance with chapter 34.05 RCW.

(2) The administrative law judge's proposed decision and order shall be final and not subject to further appeal unless, within thirty days of notice of the decision being communicated to the interested parties, a party petitions for review by the director. If the director's review is timely requested, the director may order additional evidence by the administrative law judge. On the basis of the evidence before the administrative law judge and such additional evidence as the director may order to be taken, the director shall render a decision affirming, modifying, or setting aside the administrative law judge's decision. The director's decision becomes final and not subject to further appeal unless, within thirty days after the decision is communicated to the interested parties, a party files a petition for judicial review as provided in chapter 34.05 RCW. The director is a party to any judicial action involving the director's decision and shall be represented in the action by the attorney general.

(3) If an appeal involves the right of an individual to family leave insurance benefits under this chapter, the parties shall be afforded an opportunity for hearing within seven days of the appeal being filed with the director.

NEW SECTION. Sec. 16. If, upon administrative or judicial review, the decision of the department is reversed or modified, the administrative law judge or the court in its discretion may award reasonable attorneys' fees and costs to the prevailing party. Attorneys' fees and costs owed by the department, if any, are payable out of the family leave insurance account.

NEW SECTION. Sec. 17. An employer, temporary help company, employment agency, employee organization, or other person may not discharge, expel, or otherwise discriminate against a person because he or she has filed or communicated to the employer an intent to file a claim, a complaint, or an appeal, or has testified or is about to testify or has assisted in any proceeding under this chapter. This section shall be enforced as provided in RCW 51.48.025.

NEW SECTION. Sec. 18. (1) This chapter is not intended to discourage employers from adopting or retaining policies that provide additional benefits to individuals to address family leave needs.

(2) This chapter is not to be construed to diminish an employer's obligation to comply with a collective bargaining agreement or an employment benefit program or plan that provides greater benefits to individuals than the family leave insurance benefits provided under this chapter.

(3) An agreement by an individual to waive his or her rights under this chapter is void as against public policy.

(4) The benefits provided to individuals under this chapter may not be diminished by a collective bargaining agreement or an employment benefit program or plan entered into or renewed after the effective date of this section.

NEW SECTION. Sec. 19. (1) Family leave insurance benefits are payable under this chapter only to the extent provided in sections 7 and 8 of this act and only to the extent that moneys are available in the family leave insurance account for this purpose. Neither the state nor the department is liable for any amount in excess of these limits.

(2) This chapter does not create a continuing entitlement or contractual right. The legislature reserves the right to amend or repeal all or part of this chapter at any time, and a benefit or other right granted under this chapter exists subject to the legislature's power to amend or repeal this chapter. There is no vested private right of any kind against such amendment or repeal.

NEW SECTION. Sec. 20. The director may adopt rules as necessary to implement this chapter. In adopting rules, the director shall maintain consistency with the rules adopted to implement the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6), to the extent such rules are not in conflict with this chapter.

NEW SECTION. Sec. 21. (1)(a) Except as provided in this section, each employer shall retain from the earnings of each individual a premium of one cent per hour worked, up to a maximum of forty hours per week. The employer shall match the amount retained by an equal amount, and the money retained shall be paid to the department in the manner and at such intervals as the department directs for deposit in the family leave insurance account. In the payment of premiums, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.

(b) The director shall adjust the amount of the premium from time to time to ensure that the amount is the lowest rate necessary to pay family leave insurance benefits and administrative costs, and maintain actuarial solvency in accordance with recognized insurance principles, of the family leave insurance program.

(2) The state apprenticeship council shall pay the entire amount required to be remitted for the family leave insurance account to the department for registered apprentices or trainees during their participation in supplemental and related instruction classes.

(3) None of the amount assessed for the family leave insurance account may be retained from the earnings of individuals covered under RCW 51.16.210.

(4) The department may adopt rules to permit an individual with multiple employers and their employers to petition for refunds or credits of amounts paid to the department for hours in excess of forty hours per week worked by the individual.

NEW SECTION. Sec. 22. (1) When an employer quits business, or sells out, exchanges, or otherwise disposes of the employer's business or stock of goods, any premium payable under this chapter is immediately due and payable, and the employer must, within ten days thereafter, make a return and pay the premium due. Any person who becomes a successor to the business is liable for the full amount of the premium and must withhold from the purchase price a sum sufficient to pay any premium due from the employer until the employer produces a receipt from the department showing payment in full of any premium due or a certificate that no premium is due and, if the premium is not paid by the employer within ten days from the date of the sale, exchange, or disposal, the successor is liable for the payment of the full amount of premium. The successor's payment thereof is, to the extent thereof, a payment upon the purchase price, and if the payment is greater in amount than the purchase price, the amount of the difference is a debt due the successor from the employer.

(2) A successor is not liable for any premium due from the person from whom the successor has acquired a business or stock of goods if the successor gives written notice to the department of the acquisition and no assessment is issued by the department within one hundred eighty days of receipt of the notice against the former operator of the business and a copy thereof mailed to the successor.

NEW SECTION. Sec. 23. The family leave insurance account is created in the custody of the state treasurer. All receipts from the premium imposed under section 21 of this act or the penalties imposed under section 14 of this act must be deposited in the account. Expenditures from the account may be used only for the purposes of the family leave insurance program. Only the director or the director's designee may authorize expenditures from the account. The account is subject to the allotment procedures under chapter 43.88 RCW, but an appropriation is not required for benefit payments.

Sec. 24. RCW 49.78.005 and 1997 c 16 s 1 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the department shall cease to administer and enforce this chapter beginning on July 27, 1997, and until the earlier of the following dates:

(a) The effective date of the repeal of the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6); or

(b) July 1st of the year following the year in which amendments to the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6) take effect that provide less family leave than is provided under RCW 49.78.030. In determining whether the federal law provides the same or more leave, the department shall only consider whether (i) the total period of leave allowed under the amended federal law is twelve or more workweeks in a twenty-four month period, and (ii) the types of leave authorized under the amended federal law are similar to the types authorized ((~~in this chapter~~)) under RCW 49.78.030.

(2)(a) The following provisions of this chapter are in effect:

(i) An employee's right under RCW 49.78.070(1)(b) to be returned to a workplace within twenty miles of the employee's workplace when leave commenced ((~~shall remain in effect.~~));

(ii) An individual's right under section 12 of this act as described in RCW 49.78.070; and

(iii) An employee's entitlement to leave for sickness or temporary disability because of pregnancy or childbirth in addition to the family leave required by 29 U.S.C. ((~~29.2612~~)) Sec. 2612(a)(1)(A) and (B) of the federal family and medical leave act of 1993 (Act Feb. 5, 1993, P.L. 103-3, 107 Stat. 6) ((~~shall be in addition to any leave for sickness or temporary disability because of pregnancy or childbirth~~)).

(b) The department shall enforce this subsection under RCW 49.78.140 through 49.78.190, except that an initial notice of infraction shall state that the employer has thirty days in which to take corrective action. No infraction or penalty may be assessed if the employer complies with the requirements of the initial notice of infraction.

NEW SECTION. Sec. 25. The sum of . . . . . dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2003, from the medical aid fund and the accident fund, in equal amounts, to the department of labor and industries for the purposes of administering the family leave insurance program under this act. This sum shall be repaid to the medical aid and accident funds from the family leave insurance account by June 30, 2013.

NEW SECTION. Sec. 26. Sections 1 through 23 of this act constitute a new chapter in Title 49 RCW.

NEW SECTION. Sec. 27. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 28. This act applies beginning with weeks of eligibility that begin on or after January 1, 2002.