Seyfarth Synopsis: A class action lawsuit has been filed against Washington State's Long-Term Services and Supports Trust Act (the “Act”) that requires each worker in Washington to contribute $0.58 per $100 (0.58%) of wages to a trust set aside to pay long-term care benefits for its residents. The lawsuit challenges the Act and requests a declaratory judgment that the Act is unenforceable as it violates ERISA and federal and state laws governing employee benefit plans. See Pacific Bells LLC et al v. Inslee et al, No 2:21-cv-01515, (W. Dist. WA). Nov. 9, 2021.
The Act was enacted in 2019 in an effort to plan for the projected long term care needs of Washington State residents. Under the Act, employers must remit on a quarterly basis a payroll tax of 0.58% (adjusted based on Washington's CPI) of Washington employees' wages (without a cap) to a trust establish by the State. The maximum benefit payable is $100/day up to a maximum lifetime benefit of $36,500. For more information on the Act, see our blog post here, and our webinar on the Act here.
The Act is the first of its kind in the United States and has been controversial since its enactment. This is due to several of the Act's provisions, such as the scope of employees who must pay the tax. Under the Act, generally all employees who work in Washington State will pay the tax starting in 2022, regardless of their state of residence, although only Washington State residents will be able to use the benefit.
Another sticking...
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