Washington’s Paid Family & Medical Leave (PFML) program is funded by a premium that nearly every Washington employer has to report and pay to the Employment Security Department (ESD) every quarter. It is easy to let a quarter slide—especially for a small business without a dedicated payroll department—but a past-due PFML balance is one of the more expensive things to ignore, and the cost of waiting only grows.
How the premium works
PFML premiums are collected on employee wages and reported quarterly through ESD’s Paid Leave program. Employers withhold the employee share from wages and remit it along with any employer share. Employers with fewer than 50 employees are not required to pay the employer portion of the premium—but they are still required to collect and remit the employee share. That distinction trips up a lot of small businesses, who assume that being under 50 employees means they owe nothing. It does not; the employee share still has to be reported and paid.
What happens when you fall behind
A late or unpaid PFML report does not simply sit quietly. ESD assesses interest and penalties on overdue premiums, and those charges compound the longer the balance goes unpaid. Because the amounts are tied to your total covered payroll, even a single missed quarter for a modestly sized workforce can grow into a meaningful number by the time it is resolved.
The grant you can quietly disqualify yourself from
Washington offers small-business assistance grants to help employers absorb the cost when an employee takes paid leave. Those grants are a real benefit for small employers—but a business that is delinquent on its own premiums is generally not in good standing to receive them. In other words, falling behind can cost you twice: once in penalties and interest, and again in lost access to the assistance the program is supposed to provide.
What to do now
- Log in to your Paid Leave account and confirm every quarter has been reported and paid, including quarters where you had no employer share to pay.
- If you are under 50 employees, make sure you are still remitting the employee share—being exempt from the employer portion is not the same as owing nothing.
- If you find a past-due balance, address it sooner rather than later; interest and penalties accrue over time, and a clean account keeps you eligible for the small-business grant.
- Reconcile PFML with your WA Cares withholding at the same time—the two are collected together but calculated differently, which is a common source of payroll errors.
None of this is complicated, but it is easy to overlook until a notice arrives. A quick account review now is far cheaper than a penalty assessment later.
If you have questions about Washington Paid Family & Medical Leave compliance, you can reach us at martinkreshon.com or call (206) 929-0609. You can also find reviews for Martin on Google and Avvo.