On December 17, 2021, Inslee and Democratic leaders announced delaying the new WA Cares payroll tax deduction set to start on January 1, 2022. The announcement included admitting to the need of fixing known policy issues.
Governor Inslee stated that “the Employment Security Department will not collect the premiums from employers before they come due in April” to give the Legislature time to sort through those known issues. However, the announcement stopped short of telling employers to pause the tax deduction. In a roundabout way, Senator Andy Billig stated that the Legislature “cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums…”
Critics and even some supporters of WA Cares are frustrated with several obvious flaws because many who are required to pay will never be eligible for benefits. For example, workers near retirement will not have time to get vested, out-of-state residents who work in Washington, spouses of the military, and those who move to other states upon retirement.
The I-1436 campaign, which will allow workers to opt-out of WA Cares, is collecting signatures due in about a week. Should enough signatures be gathered, the Legislature may approve, deny or amend it. If they deny the initiative, voters will get to vote on it in November 2022. If lawmakers amend I-1436, voters will have two versions of the I-1436 to decide on next fall.
There is no way to anticipate which direction the Legislature will take. In the meantime, WR encourages retailers to start deducting the WA Cares tax beginning Jan 1 according to the current law since the Governor’s statement did not substantively delay remission of premiums in April.