February 7, 2018
Washington State Labor Council, AFL-CIO
321 16th Ave S.
Seattle, WA 98144
206.281.8901
Cami Feek
Paid Family & Medical Leave Director
Washington State Employment Security Department
212 Maple Park Ave SE
Olympia, WA 98501-2347
Re: PFMLI Phase 1 Rule Making – Pre-102 Draft Review – Employee Advocate Comments
Dear Ms. Feek,
Thank you for the impressive coordination effort you and your team have advanced in support of the implementation of Washington’s best-in-the-nation Paid Family and Medical Leave Insurance program. Breaking ground on such an expansive, new, social safety net program carries with it unique challenges and requires creative thinking. We have appreciated your collaborative approach and open-door when it comes to developing this program largely from whole cloth. We also appreciate the opportunity for unions, legal advocates, women’s groups, and family policy organizations – many of whom were deeply involved in the development and negotiation of the Paid Family and Medical Leave Law in 2017 – to weigh-in on the draft rule prior to the formal CR 102 process so we can troubleshoot issues before they become too difficult to manage. We look forward toward continuing to work with you on this project over the coming years.
The initial draft provided by your team in early January largely met the needs of the working families for whom we advocate, with some exceptions. Our intent is to comprehensively outline the changes we wish to see in this letter, though reserve the right to identify further changes as issues are identified through additional stakeholder processes.
These written comments are in addition to verbal comments provided at the February 2, 2018 public comment meeting. Some may overlap, while others have not yet been expressed. Please do not hesitate to reach out to us if you have questions, or concerns.
- 192-500-200 – Election, withdrawal, and cancellation of coverage for self-employed workers and tribes.
- This section of the WAC does not contemplate a self-employed worker opting in to coverage while also being employed in a traditional employee-employer relationship at another place of business. For example, a worker who is employed as a server in a restaurant, who also works as a contract driver for a package delivery company does not have guidance in the rule as to how their application process might differ than a full-time self-employed individual. The Department should provide clarity as to how a worker who is both traditionally employed and self-employed coordinates their benefits under the program. This should also be clarified the extent to which a voluntary plan interacts with dual self-employment.
- Subsection 2 asserts that elective coverage begins in the calendar year following the Department’s receipt of a notice of election. This could result in a worker electing coverage in January 2020 and not being eligible for benefits until January 2021, a full year later. A worker who submits a notice of election in December 2020 would also be eligible in January 2021.
RCW 50A.04.105 establishes an initial three year requirement to elect coverage, but does not require that coverage begin in a subsequent calendar year. The Department should revisit WAC 192-500-200(2) to ensure that elective coverage begins within a reasonable period of the Department having received a notice of election. - 192-500-210 (2) – Department’s determination of wages earned and hours worked for those electing coverage.
Agency rules should provide clarity to the laws which empower the agency to act. As employers continue to expand the use of labor uncovered by the employment test used by this program, establishing a clearer set of guidelines as to how the Department will determine true earnings will be of growing importance. We believe that ESD should provide examples of how a person electing coverage might best overcome the presumption established by the Department in 210(1). Such examples should include, but should not be limited to, a work or service contract, a work log, and bank account records. - 192-500-300 – Employer liability for premiums.
- (2) Regarding new employers – we do not believe that it is wise to simply assume that new employers will have fewer than 50 employees. New employers may begin with 50 or more employees as a matter of fact, whether they start-up with that level of employment within the state, expand in to the state from out-of-state communities, or come in to being through mergers, or when one larger company splits up, or spins off, different divisions of the parent company.
Employers should be required to make a good-faith estimate of the number of covered employees they expect to have over the following year.
Further, employers whose premium liability is waived due to employment levels should automatically be assessed premiums if they report having 50 or more employees for two quarters or more during the year in which their liability was waived. - (3)(a) Change in status – This section appears to be in conflict with statute and should be revisited. RCW 50A.04.115(8)(c) reads:
On September 30th of each year, the department shall average the number of employees reported by an employer over the last four completed calendar quarters to determine the size of the employer for the next calendar year for the purposes of this section and RCW50A.04.230
We believe that the employment level snapshot set for each September 30th fails to reflect the statutory requirement that the Department average four completed calendar quarters to determine employment size and the corresponding premium liability. This section should be reworked to reflect the letter and the intent of the law. - 192-500-320 When employer premium payments can be conditionally waived for certain workers.
- Clarification – Employees and employers will need further clarification as to when, and by what standards, their premium liabilities will be waived. The Department should provide examples as to what kinds of work and working relationships are automatically waived, and what types of documentation might be necessary. This should also include guidance on whether or not an application for a waiver is necessary.
- Work Visas – The current rule is silent on how the agency will interpret a workers’ status under this section when that worker is employed in Washington state under the authority of a work visa. Of particular concern are those workers employed under “temporary work visas” like the H1B for Specialty Occupations and the H2A for Seasonal Agricultural Occupations, though others certainly apply.
RCW 50A.04.010(7)(a)i and ii establish a premium liability if the service is localized in Washington state, or if the service is not localized in Washington state but some of the service is performed in Washington state.
RCW 50A.04.120 establishes the standards for premium waivers for out-of-state employees if (a) they are physically based out of the state, (b) only employed in the state on a limited or temporary work schedule, and (c) they are not expected to be employed in the state for 820 hours in a qualifying period.
The Department should adopt rules that presume workers authorized to work in Washington state under temporary work visas are covered by this program because their work is physically based in Washington state, and that premiums be collected and paid to the Department. This is particularly important for workers whose typical spoken language is one other than English. It is not sufficient for the Department to accept a signed application from the employer and employee if the employee is reasonably understood to lack native proficiency of the English language.
320 should include a subsection for workers employed under a temporary visa that presumes coverage unless an employer rebuts with clear and convincing evidence that the work is not physically based in Washington state, and that the worker clearly understands the consequences of waiving coverage. Examples of such understanding might include statements in English and their spoken language of their rights under the program to derive a benefit, and their obligations to retroactively pay premiums if it is determined that they may later qualify for those benefits and then be obligated to retroactively pay premiums. - 192-500-620 Substantive requirements for voluntary plans.
Subsection (2) provides an example of how a voluntary plan might halve the number of weeks an employee may take under such a plan, with twice the weekly benefit value. While we understand the intent of this example is to illustrate the flexibility afforded voluntary plans, we also believe that it leaves out an important element that such plans are required to include. While voluntary plans may – to limited extents – decrease time off and increase benefit compensation, they must allow workers to access the full number of weeks off work guaranteed them by law, even though half of those weeks may be uncompensated.
The example in subsection 2 should clarify that the employee still has guaranteed access to the full number of weeks of leave provided under the law. - Private Insurance Products.
During the February 2, 2018 public comment period for the per-102 draft, a representative of an insurance firm asked whether their insurance product, which will be offered as an option under New York State’s TDI and Family Leave program, could be assessed by ESD so it could be marketed as compliant with Washington law, and agency rules. An ESD representative responded that such an assessment would be possible without paying a fee.
Washington’s PFMLI program provides great latitude and flexibility for employers to develop and adopt means of providing these benefits outside of the state program. Presumably, companies who opt to adopt voluntary plans for Family Leave, Temporary Disability Leave, or both, will do so in ways as diverse as the companies themselves. If they choose to do so through third-party private insurance products, those products should be analyzed on a case-by-case basis, by and between the Department and the Employer, with an eye toward ensuring that each benefit program by each employer meets their obligations under the law. The administration of the voluntary plan program is intended to be financed by a filing fee levied by the Department on the employer.
We certainly do not object to the Department assessing a product that employers might utilize when meeting their obligations under the law,but the ultimate approval or denial of any program should be accomplished through a standard regulatory review, and should be applied equally to all employers pursuing a voluntary plan. This must also include the payment of the administrative fee which is meant to fund this process.
Thank you so much for you time, and your attention to these matters. We look forward to the next draft of these rules, and toward our continued engagement as the Department pursues the next steps of this first phase of rule-making.
Please contact the Washington State Labor Council if you have questions or concerns, and they will connect you to the right subject matter expert.
Sincerely,
Marilyn Watkins
Economic Opportunity Institute
Liz Ford
Fair Work Center
Nancy Sapiro
Legal Voice
Maggie Humphreys
Mom’s Rising
Samantha Grad
United Food and Commercial Workers, Local 21
Joe Kendo
Washington State Labor Council, AFL-CIO
Artie Nosrati
Working Washington