Low-income workers should not have to give higher-income workers more of their wages

All W-2 workers in Washington state should count on continual pay decreases to pay for the state’s mandatory paid-leave program — a program that doesn’t pay its way and that requires low-income wage earners to supplement the life needs and wants of upper-wage earners. How’s that for regressive? 

Employment Security Department numbers show that middle- and upper-income people use paid leave far 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. Meanwhile, full-time workers of all incomes already lose hundreds of dollars a year to this tax. (Calculate your losses here: https://paidleave.wa.gov/estimate-your-paid-leave-payments/.)  

The Paid Family and Medical Leave program is no safety net. It makes most workers less able to pay for the life needs they do have. The Legislature should have considered ending it this year.

Instead, lawmakers considered Senate Bill 5292, which in the end proposed taxing workers up to $2 of every $100 in earnings in the coming years for a benefit many will never see. That new, higher rate would’ve been more than double the current tax. The bill died, but the proposal could still be considered again next session. That’s likely because the funding now available for the program doesn’t cover its costs.

The Joint Legislative Audit and Review Committee said that administrative costs and benefits exceeded revenue for the paid-leave program in two of its first four years. And in 2023, the program got a $200 million bailout from the state’s general fund to deal with higher-than-expected claims. The fix was temporary, however. A state consultant forecasts that the program will likely see negative net income again in three of the next five years. 

That’s not hard to understand. People like it when other taxpayers help pay for their life wants and needs — especially when a portion of their wages has contributed to a pool of money during their working years.

Already burdensome

This year, the tax for the program is already 92 cents on every $100 a worker earns — up to the 2025 Social Security cap of $176,100. That’s more than twice the amount when the tax began in 2019 at 40 cents per $100 of earnings. (Employees pay about 72% of this tax. Employers contribute about 28% on behalf of their employees. That’s money that then can’t go toward increased worker pay or other benefits.)

The most recent version of Senate Bill 5292 outlined increases in the 1.2% Paid Family and Medical Leave tax rate cap. The bill called for raising it to 1.4% in 2027 and 2028, 1.6% in 2029 and 2030, 1.8% in 2031 and 2032, and 2% for 2033 and subsequent years.

While some supporters of this harmful worker tax brag that thousands have been helped by it, they fail to mention that millions of workers have not. And for some of those workers, making ends meet is more difficult because of it. The paid-leave tax penalty state lawmakers have placed on workers puts self-sufficiency further out of reach for some Washingtonians and should end. 

Federal law already 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 don’t have the luxury of taking weeks off, even with paid leave.