On March 11, 2025, Governor Bob Ferguson signed Second Substitute House Bill 2345 (HB 2345). The new law revises how the Washington Paid Family and Medical Leave (PFML) premium requirements are allocated between employers and employees to address Internal Revenue Service (IRS) guidance.
The bill does not change the total PFML premium amount. Instead, it adjusts how the premium is split between medical leave and family leave for employers participating in the state program:1
Small employers with fewer than 50 Washington employees remain exempt from paying the employer portion of the PFML premiums.
This adjustment responds to updated federal tax guidance issued last year.2 Because employer contributions for paid family leave are not subject to federal employment taxes, shifting more employer contributions away from medical leave helps avoid creating additional federal tax liabilities.
The bill does not specify when employers must adjust their payroll systems to reflect the new premium split. However, it appears the adjustment will align with the normal annual recalculation schedule. By law, Washington’s Employment Security Department recalculates the premium rate annually in October based on program...
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