I testified on Senate Bill 5292, which proposes a different process for determining how much workers are taxed for the Paid Family and Medical Leave program. It would eliminate and replace the statutory formula used to calculate the tax rate, since that hasn’t kept the fund out of the red. It would also require the tax rate to accommodate a three-month reserve, in addition to the current requirement that the paid-leave fund maintain a four-year solvency.

Finally, it would misguidedly increase the tax’s 1.2% rate cap. 

Here are thoughts I wrote for the Senate Committee on Labor and Commerce about the bill: 

I’m Elizabeth New with Washington Policy Center. Thanks for hearing my concerns with Senate Bill 5292. 

This Legislature should end the state’s paid-leave program. Instead, this bill considers a way to tax workers even more for a benefit many will never see, while making workers unable to put more of their wages into the life needs that they do have. This year, the tax for the program is 92 cents on every $100 a worker earns. That’s more than twice the amount when the tax began in 2019. 

The Joint Legislative Audit and Review Committee says that administrative costs and benefits exceeded revenue for the paid-leave program in two of its first four years. A state consultant says the program is likely to see negative net income again in three of the next five years.

Worse than not paying is way, the program requires low-income wage earners to supplement the life needs and wants of upper-wage earners. My research shows that middle- and upper-income people use paid leave more than those with lower incomes. In fact, people making $60 or more an hour used the fund nearly twice as much as the lowest wage earners in fiscal year 2024. This paid-leave program is no public safety net. 

Full-time workers of all income levels lose hundreds of dollars to this tax each year. Please don’t decrease their take-home pay again next year. 

While some supporters of this tax brag that thousands have been helped with it, they fail to mention that millions of workers have not. For some of those workers, making ends meet is more difficult because of it.

Federal law allows workers 12 weeks of job-protected, unpaid family leave. It doesn’t pay people not to work while taxing those who do work but who don’t have the luxury of taking weeks off, even with state-paid leave. This tax places self-sufficiency further out of reach for some Washingtonians and should end.

* The full hearing will be available on TVW.