New Washington Payroll Tax Delayed until April

With just weeks to spare before Washington’s employers were set to begin collecting a 0.58% payroll tax to fund the nation’s first public long-term care program, Governor Jay Inslee is pumping the brakes. The mandatory tax was scheduled to become effective January 1, 2022; however, the Governor announced on December 17 that the measure would be paused until April.

Democratic leadership indicated that they intend to pass a law to formally delay the premium collection until after the 2023 legislative session. The delays are intended to allow the Governor and lawmakers time to address ongoing concerns with the program and consider making changes based upon data and recommendations provided by the state’s Long-Term Services and Supports Trust Commission.

Lawmakers are expected to examine the issue of employees who would be paying into the program but ineligible to receive benefits under the current structure. This includes employees working in Washington who live in border states, like Oregon, as well as employees nearing retirement age. These groups would be required to pay into the program despite being ineligible to collect on the benefit.

Aldrich Benefits continues to track developments and will provide up-to-date information as it becomes available.

This article was written with the most current information available as of December 20, 2021. Please check back for future updates.