June 30 Deadline To Avoid State Government Shutdown

Date: June 24, 2017

In addition to the state budget, 76-page paid leave proposal, health insurance company transparency bills also await legislative action

NFIB/Washington State Director Patrick Connor reports on the small-business agenda for the legislative week ending June 23

June 21 saw the end of the second special session and start of the third. The Legislature still has not reached agreement on an operating budget for the 2017-2019 biennium. Lawmakers have until midnight June 30 to pass a budget and avert a government shutdown. Senate Republicans claim a deal will be achieved and a shutdown avoided. Gov. Jay Inslee insists he will veto any short-term, stop-gap measure should the Legislature pass one.

Health Insurance Company Transparency

NFIB testified June 19 on its concerns about House Bill 2222, “protecting information obtained to develop or implement an individual health insurance market stability program.” The bill seeks to shield from public disclosure patient and company financial data provided by the carriers to the state insurance commissioner as his office prepares a Section 1332 waiver from the federal government.

Thus far, discussions about the waiver application have occurred in private. NFIB testified that some information – abstracts, summaries, or the like – justifying the need for a taxpayer or policyholder bailout of the carriers is essential if the Legislature is to enact a re-insurance program or other “market stability program.” As a result, NFIB and the Building Industry Association of Washington were added to the insurance commissioner’s stakeholder group. The next meeting has not yet been announced. (See last week’s update for more details.) HB 2222 is eligible for floor action in the House.

The Senate is scheduled to begin floor action June 27. The House calendar has not yet been published, but state representatives are expected to be on the floor next week as well.

Paid Family & Medical Leave

Following extensive discussion, the Washington state leadership council of NFIB unanimously affirmed NFIB’s opposition to a paid family and medical leave mandate. NFIB obtained a copy of the draft bill June 23. The following are the highlights of the 76-page draft.

  • To be eligible for benefits, an employee must work 820 hours within the preceding four of five quarters.
  • The intent is for the benefit to be portable with few or no additional requirements when workers change jobs, except that they will be required to complete 340 hours at a firm offering a “voluntary plan” before that plan is charged for any leave they take.
  • Leave is split into two “buckets”: family leave for the birth or placement of a child, or care of a relative with a serious health condition; and medical leave for a worker’s own serious health condition. Beginning in 2020, eligible workers would be entitled to 12 weeks of either family or medical leave, or 16 weeks for a combination of both. In the event of pregnancy-related complications, two additional weeks leave is allowed. The bill does not specify whether that leave is available solely to the mother or to both parents.
  • Workers should provide 30 days’ notice before taking leave, if possible.
  • Certification from a medical provider may be required by the Employment Security Department to confirm the health condition requiring leave. Workers would have to consent to medical information being released to the department.
  • Workers would receive a weekly benefit between $100 and $1,000 based on their average wage … unless their average weekly earnings are below $100, in which case they would receive the full amount of their lesser average weekly wage. Workers would have to earn the equivalent of an $85,000 annual salary to reach the $1,000 weekly cap.
  • Starting in 2019, the program would be funded by a payroll tax starting at 0.004 times an individual’s wage. The annual premium would be set by the Employment Security Department and could vary between 0.001 and 0.006 of wages. Proponents estimate the initial premium would cost minimum-wage workers about $2 per week.
  • Employers with 50 or more workers would pay approximately 37 percent of the premium, with workers paying the balance. Employers with fewer than 50 workers would not be required to pay their portion of their premium. Proponents estimate the employer premium would cost $1,480 for a $1 million payroll.
  • Only employers paying their portion of the premium would be eligible for training and wage-offset grants. The program would offer $3,000 grants for training temporary replacement workers or $1,000 to offset overtime or increased hours for other workers covering for the employee on leave.
  • Employers with 50 or more workers would be required to provide job protection for workers taking leave, except in a few special situations. They would also be required to maintain health care benefits.
  • Employers would NOT be charged for unemployment insurance costs for hiring temporary replacement workers.
  • The bill allows any employer to establish an alternative “voluntary plan” so long as several conditions established in law and by rule are met. Negotiators have indicated the total leave duration and benefit payout under these plans must be equal or better than the state program. Worker premiums for any voluntary plan could not be greater than those charged for the state program. These plans also require job protection and maintaining health insurance benefits.
  • Self-employed individuals and tribes could opt-in to the state program for a minimum period of three years. They must pay the full premium to participate.
  • The Employment Security Department will administer the program, including developing regulations. The bill also prohibits local governments from creating their own programs (statewide pre-emption).
  • An ombudsman and advisory committee will be appointed. It appears the Association of Washington Business would suggest the names of all employer representatives on the advisory panel, so there is no guarantee small employers would be represented.
  • The bill also includes various penalties for violations of the act, as well as a lengthy description of appeals processes.
  • Premiums collected by employers would be held in trust, and employers would be personally liable for any unpaid premiums, plus penalties and interest. The department could also issue liens, seize and sell assets, and pursue civil action to collect premiums owed.

The Legislature is expected to pass the bill in order to prevent Big Labor from filing an initiative. An initiative by labor unions would almost certainly allow more leave, perhaps as much as 38 weeks, and require employers to pay most or all of the premium. Seattle’s draft ordinance would require employers to pay 100 of program costs.

Previous Reports and Related News Releases, Editorials

June 16 Report—Paid Leave Deal Set, Bill Introduction Expected Next Week

June 9 Report—Washington Legislature Heading Into Triple Overtime

June 1 Report—That Second Special Sound—Crickets

May 26 Report—Inslee Declares Capital Gains, Property Tax Proposals Dead

May 19 Report—Another Special Session of the Washington Legislature Expected

May 12 Report—Inslee Signs Small Business Bill of Right Inventory Into Law

May 5 Report—Governor Expected to Sign NFIB-Crafted Bill Into Law

April 28 Report—Bill Simplifying Crowd Funding Signed Into Law

April 21 Report—NFIB Victory: Regulatory Fairness Act Signed Into Law

April 7, 14 Report—NFIB Victory: Ban The Box Bills Dead—For Now

March 31 Report—Labor Threat: Paid Family Leave Legislation or Ballot Initiative

March 24 Report—‘Get NFIB on Board’ Orders Senate Committee Chairman

March 17 Report—Legislators Challenged on Their Ban-The-Box Hypocrisy

March 10 Report—Major Legislative Deadline Passes in Olympia

March 3 Report—NFIB Agenda Bills Passing by Big Margins in Olympia

February 24 Report—Key NFIB Legislative Bills Advancing in Olympia

February 22 Editorial—Good News Can Come Out of Olympia

February 17 Report—NFIB Making Long Strides in Regulatory Reform

February 16 News Release—Small Business Seeking to Toss I-1433

February 16 News Release—New Poll Shines Light on Big Small-Business Headache

February 10 Report—NFIB Only Business Group to Testify for Right to Work

February 3 Report—Competing Employer Mandates Take Center Stage

January 27 Report—Small Business Bill of Rights Inventory Legislation Advances

January 20 Report—Bill Introductions Begin in Earnest in Olympia

January 13 Report—Opening of Legislative Session Sees NFIB Charging Ahead

[Tile photo courtesy of the Washington State Legislative Support Services]

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