Pump the Brakes! Washington Legislature Hits “Stop” on the CARES Act

Yesterday, the state House of Representatives passed two key bills that will delay collection of payroll taxes for the Washington CARES Act, the controversial “long term care” law passed last year. House Bill 1732 delays the payroll tax until July 2023. The Bill now goes to the Senate, where it is expected to pass.

The delay is designed to give lawmakers the opportunity to address the many concerns that have been expressed about the law, primarily the fact that people could pay into the program for years but never receive benefits – such as people who work in Washington and live in another state and those who plan to retire outside Washington. In addition, as the law is currently structured, many workers near retirement age would pay into the program but not become “vested” in the benefit. HB 1732 addresses this issue by permitting partial benefits to Washingtonians born before 1968.

So you are probably asking: What happens to the premiums I’ve already collected? Great question. The Bill provides that premiums will be refunded to employees within 120 days. And if you have delayed collecting premiums to date – stay the course.

If you are one of the many businesses who implemented private Long Term Care insurance as a benefit for your employees: Don’t change a thing. Keep in mind this is a temporary “hold” on the CARES Act, not a permanent elimination of the law. All of the signs support that the CARES Act is here to stay – with some tweaks to be worked out by our state lawmakers over the next year or so.

Have questions? We’re here to help you navigate the winding road of Washington’s employment laws. Until next time – stay safe and buckle up! It’s bound to be a wild ride.