Washingtons paid leave program heads toward a fiscal cliff

Washington’s paid family and medical leave program is on track for a potential $350 million deficit by 2029, which could necessitate either reduced benefits or increased contributions from employers and employees. The current premium rate stands at 0. 92% of workers’ paychecks, with an expected rise to 1. 13% next year. However, due to a cap of 1.

2% on premiums, the program risks falling short of funding as claims rise. Since its inception in 2020, the program has seen a 15% increase in applications, with over 240,000 beneficiaries receiving more than $2 billion in total benefits. A $200 million infusion from the general fund in 2023 provided temporary relief, but lawmakers face significant budget challenges ahead. Efforts to shift to a more forward-looking premium calculation method stalled in the Legislature. Senator Steve Conway advocates for better funding, highlighting the program's popularity.

Without legislative action, the program's long-term viability remains in jeopardy.