WA Paid Family Medical Leave Defecit to Hit $353M by 2029

From its beginning in 2019, the WA State Paid Family Medical Leave program has been barely able to keep itself afloat, and now it's facing a slew of new problems.

   The plan will be $353 million underwater by 2029

The PFML was created to give workers paid time off for medical situations involving care for a family member, pregnancies, or other related issues.  PFML is different than the Federal Family Medical Leave Act, in which it provides paid time off, while FMLA does not.  PFML is state-run.

The WA Plan pays up to 90 percent of your weekly wages, with a maximum benefit of $1,542 each week for up to 12 weeks.  If the leave involves pregnancy, it can be stretched to 18.

Critics and opponents said such a program would be very difficult to fund, and as structured, could likely fall into insolvency--or unable to support itself.

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  Now the Washington Research Council, a non-profit independent economic group, has reported to the state that the PFML will have a $26 million deficit by 2026, and it will rise to $353 million by the end of 2029. Businesses and workers both contribute to funding the mandatory program, and the deduction rate percentage has been raised twice from the original 0.4 percent to the maximum (set by law) of 1.2 and it is still running in the red.

The WRC says by 2028, the 1.2 percent contribution rate will not be enough to support PFML.  The IRS has also thrown in a curveball, announcing earlier this year it will impose tax liabilities on both businesses and recipients. In other words, those who receive PFML will have to pay taxes on it.

According to information released by the WA Retail Foundation, both businesses and program recipients will now be facing tax burdens that were not previously contemplated or considered when the program was created.

Why is the program in the red?

Most sources agree that the number of persons who have utilized the program has outstripped its ability to keep up. Also worth noting, when it was passed, Democrat party supporters said it was aimed at helping middle and lower-income working families with medical issues.

However, the majority of the people utilizing PFML in WA have higher incomes. The WA Policy Center reports for the year 2024, 70 percent of PMFL recipients make more than $24 per hour, only 9 percent at or below $18 per hour--which is considered low-income.

The wage replacement is often not enough for lower-income families, as they can't afford getting just 90 percent of their income; and many are still not aware of the program. Critics also say applying for and utilizing it can be difficult and cumbersome.