On Jan. 27, 2022, Washington state Governor Jay Inslee signed into law two bills, House Bill 1732 and House Bill 1733, which became effective at signing. These new bills will delay and make significant changes to the WA Cares Fund.
What you need to know
On April 21, 2021, Washington State Governor Inslee signed into law Senate Bill 1323 (SB 1323) implementing a payroll tax to support the nation’s first state-run long-term care (LTC) services and support trust program. Under the legislation, beginning January 1, 2022, Washington employers were required to withhold 0.58 percent from all employee wages and remit those payments to the state quarterly.
On December 17, 2021, Governor Inslee, along with Senator Andy Billig and Speaker Laurie Jinkins, announced that the requirement for employers to remit to the state any LTC premiums withheld from employee’s pay was being delayed until April 2022. The Governor and the legislative leaders stated that they would instruct the relevant agencies not to require remittance until April and not to impose any penalties, stating “while we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees” while the Washington state legislature took up the bills modifying the WA Cares Fund.
In December, ADP communicated that we would modify our systems and not withhold the WA Cares premiums from employees’ wages based upon the statements made by the Governor and legislative leaders on December 17, 2021. Unless you instructed ADP otherwise, we did not withhold the premiums from your employees for payrolls processed on and after 12/23/2021.
Immediate next steps
· Employers should cease collecting premiums for the WA Cares Fund immediately and refund any premiums that have been deducted in accordance with HB 1732 which requires refunds to be made within 120 days of the collection of the premiums.
· If you requested ADP to withhold the premiums from your qualifying employees via a special calculation, you will need to reimburse those individuals. To reimburse, please process a manual check, entering the total accumulated amount as a reverse deduction code WAZ. You can also enter the reimbursement on the pay data batch by entering Adjust Deduct and entering the accumulated amount as a reverse deduction code WAZ.
· Employers should continue to monitor the WA Cares Act for further developments at the following link: https://wacaresfund.wa.gov/
Additional information
House Bill 1732 Summary
· Delays the start date for collection of premiums by employers from employees for the Long-Term Services and Supports Trust Program (LTSS Trust Program) from January 1, 2022, to July 1, 2023.
· Delays the date benefits become available under the LTSS Trust Program from January 1, 2025 to July 1, 2026.
· Allows individuals born before January 1, 1968, who do not meet the LTSS Trust Program's vesting requirements, to receive partial benefits based on the number of years of premium payments.
· Requires employers to refund employees within 120 days of collection of any LTSS Trust premiums collected from employees prior to the passage of House Bill 1732.
House Bill 1733 summary
Establishes exemptions from the payment of premiums under the LTSS Trust Program for certain veterans, spouses and registered domestic partners of military service members, nonimmigrant temporary workers, and employees who work in Washington and maintain a primary residence outside of Washington.
Resources
For more information on House Bill 1732 a copy of the bill can be found at the following link:
https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/House%20Passed%20Legislature/1732-S.PL.pdf?q=20220128075303
For more information on House Bill 1733 a copy of the bill can be found at the following link:
https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/House%20Passed%20Legislature/1733-S.PL.pdf?q=20220128080313
Have questions?
Please contact your ADP Service Representative with any questions.