Employment Law

Legislative Developments

Bills that Passed in the 2019 Legislative Session

Below are just some of the bills passed in the recent 2019 Washington State legislative session.

LONG-TERM CARE:

The Washington Legislature has approved the nation's first employee-paid program creating an insurance benefit to help offset the costs of long-term care. This bill creates a benefit for those who pay into the program, with a lifetime maximum of $36,500 per person, indexed to inflation, paid for by an employee payroll premium. Premiums will start being collected from employees in 2022 and benefits could start being collected in 2025.

STATUTE OF LIMITATIONS:

A measure significantly extending time limits for prosecuting sexual assault and modifying the definition of sexual consent was signed by Inslee April 19. It entirely removes the statute of limitations for the most serious sex crimes against children, and extends limits for older victims to as much as twenty years. It also alters consent rules by removing active resistance from the definition of third-degree rape: Instead the definition is modified to mean sex without consent — given by words or action — from the victim.

AFFIRMATIVE ACTION:

Lawmakers approved Initiative 1000, a plan to allow state agencies and schools to consider factors like race in hiring, and engage in targeted recruitment. As an initiative to the Legislature, lawmakers were able to approve it themselves without sending it to a vote. Opponents are gathering signatures to override the approval and force a popular vote.

Potential Changes to Washington Noncompete Laws

Changes may be coming to noncompete laws in Washington State. Senate Bill ESSB5478 has been proposed limiting noncompetes to employees earning over $100,000 per year among other restrictions. A simlilar House Bill HB1450 has also been proposed. Employers should be aware changes may be coming, and be prepared to make changes if needed to stay in compliance. You can read up on the bills and see how they stack up against Califorinia noncompete laws here.

DOL Proposes Increase in Salary Threshold

The Department of Labor recently proposed changes to the minimum salary threshold for exempt employees. This comes after the DOL held nationwide public listening sessions during the months of September and October of 2018 to obtain feedback and public comment on several different topics, including proposed salary level changes, methodology for updating salary levels, and frequency of salary updates, among other things.

The new minimum salary threshold is proposed to be $35,308 per year/$679 per week, versus the current minimum of $23,660 per year/$455 per week. Changes to the duties test and automatic salary adjustments were not included in the proposal. For more information, check out the DOL Notice of Proposed Rulemaking: Overtime Update here.

Washington Paid Family & Medical Leave Reporting Delays

The Department of Employment Security announced on March 13, 2019 that due date for 1st quarter Washington Paid Family & Medical Leave payments and reports has been extended through July, 2019, as opposed to the originally scheduled April due date. Penalties and interest will not be assessed on 1st quarter premiums and reports submitted before July 31, 2019. Employers should continue to withhold premiums despite the delay, unless the employer intends to pay premiums on behalf of the employee. Benefits will be unaffected.

The extension applies to Paid Family & Medical Leave premiums only. Regular Unemployment and Labor & Industries premium due dates remain unchanged.

For more information, visit the Department reporting website here.

Washington Paid Family & Medical Leave Update

It's heeeeere... Washington Paid Family & Medical Leave premium collection, that is!

That's right, the time has finally come for employers to begin collecting and remitting premiums for the new Paid Family & Medical Leave benefits! The 2019 premium is assessed at .4% of wages, and will be adjusted annually after 2020 for inflation. The employer may choose to share the cost of the premium with employees at 37% employer paid, and 63% employee paid. Premiums are capped at the current Social Security wage base.

The Department released its Employer Toolkit in late 2018, a 15-page manual that covers all things Paid Family Medical Leave. The toolkit includes program information and a readiness checklist, as well as sample employee communications.

Additionally, the Department is hosting a series of recurring webinars to help employers get ready for what's next; view the schedule and register for webinars here. As well, check out the Upcoming Meetings schedule for more information on how to attend or call in to public hearings and meetings.

Finally, here's an update on where the rulemaking process is at:

Phase 1 rules related to CBAs, premiums, and voluntary plans have been finalized! Read the finalized rules here.
Phase 2 rules related to employer responsibilities/penalties and small business assistance have been finalized! Read the finalized rules here.
Phase 3 draft #2 of proposed rules related to benefit applications and eligibility has been released! Read the draft and submit your feedback to the Department here.
Phase 4 related to continuation of benefits and fraud has begun! Read the draft and submit your feedback to the Department here.

Find the most up to date information, download fact sheets and other resources, and sign up for emailed updates by visiting the Employment Security’s Paid Family & Medical Leave website!

Washington Department of Labor & Industries EAP Exemption Update

The Department of Labor & Industries is seeking public feedback on updating current overtime exemption rules and regulations. The first pre-draft version of the proposed rules is now available. Among other things, the draft is proposing increasing the salary threshold to anywhere between 2 to 2.5 times the Washington State hourly minimum wage for a 40-hour workweek. The Department intends for the updated rule to go into effect January 1, 2020.

Visit the Department’s engagement site here to learn more about EAP exemptions and review the project timeline. You can also review the second pre-draft ruling here.

IRS Announces 2019 Plan Limits

The IRS recently released the 2019 plan limits for health, pension, and retirement related plans. Notable changes are as follows:

The annual employee contribution limit has been increased from $18,500 to $19,000 for 401(k), 403(b), most 457 plans, and Thrift Savings Plans.
The annual IRA contribution limit has increased from $5,500 to $6,000. The catchup contribution for those age 50 and better remains the same at $1,000.
The Flexible Spending Account contribution limit has increase from $2,650 to $2,700.
The Health Savings Account contribution limits have increased from $3,450 to $3,500 for singles and $6,900 to $7,000 for families. The catchup contribution for those age 55 and better remains the same at $1,000. Additionally, the High Deductible Health Plan (HDHP) out of pocket maximums have increased from $6,650 to $6,750 for singles and $13,300 to $13,500 for families.

You can read the full retirement plan release here, the FSA release here (see page 17), and the HSA release here.

2019 Washington Department of Labor & Industries Rates

Good news on the Labor & Industries front: The Department is proposing an average 5% decrease in premiums for 2019! If passed, this would be the largest single year drop since 2007. There are a few factors at play, including a reduction in statewide injuries, the success of the Stay at Work Program, and the recent receipt of a $2.5M federal grant to help workers at risk of filing a long-term disability claim return to work. You can find more information in the official press release here.

Keep in mind that the 5% is an across-the-board average, so certain rate classes will change by more (or less) than that figure. You can look up the 2019 proposed rates by risk classification here to see if your business’s risk class rates have changed. Rate classifications are multiplied by each business’s unique experience modification rating (EMR) to calculate the actual premiums due. Finalized rates and EMRs will be made available in early December.

Federal DOL OT Regulation Listening Sessions

The Department of Labor’s Wage & Hour Division is seeking to update current overtime regulations. Accordingly, the DOL held nationwide public listening sessions during the months of September and October of 2018 to obtain feedback and public comment on several different topics, including proposed salary level changes, methodology for updating salary levels, and frequency of salary updates, among other things. Transcripts of the listening sessions can be found here. We will continue to watch this progress, so stay tuned!

Janus v. State, County, & Municipal Employees

Opinion of the majority on Janus -- click here to read the full opinion.

For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. Under Illinois law, if a public-sector collectivebargaining agreement includes an agency-fee provision and the union certifies to the employer the amount of the fee, that amount is automatically deducted from the nonmember’s wages. §315/6(e). No form of employee consent is required.

This procedure violates the First Amendment and cannot continue. Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed. Johnson v. Zerbst, 304 U. S. 458, 464 (1938); see also Knox, 567 U. S., at 312–313. Rather, to be effective, the waiver must be freely given and shown by “clear and compelling” evidence. Curtis Publishing Co. v. Butts, 388 U. S. 130, 145 (1967) (plurality opinion); see also College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. 666, 680–682 (1999). Unless employees clearly and affirmatively consent before any money is taken from them, this standard cannot be met.

Abood was wrongly decided and is now overruled. The judgment of the United States Court of Appeals for the Seventh Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

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