What is a Voluntary plan?
All Washington employers must offer paid family and medical leave whether it’s through a voluntary plan or the state plan. A "voluntary plan" is an employer-run, paid family and/or medical leave insurance program with benefits that are equivalent to, or greater than, the state run program. Washington employers are allowed to split the required coverage, using a voluntary plan for only family leave, and the state plan for medical leave, or vice versa.
Employers can use:
- State plan for paid family & medical leave
- State plan for paid family leave & voluntary plan for paid medical leave
- Voluntary plan for paid family leave & state plan for paid medical leave
- Voluntary plan for paid family & medical leave
Employers must apply and be approved to operate a voluntary plan. More information→
Employers are required to report quarterly wages paid and hours worked for all Washington employees. If a voluntary plan only covers one type of paid leave (medical or family), the other must be covered by the state plan.
How quarterly reporting and payments are submitted for private plans
Employers who've been approved to provide a voluntary plan to their employees will still have the same registration and reporting requirements as those paying into the state plan. The key difference is that all payments are handled by you, the employer.
Withholdings and deductions
Based on the Employer and Employee Rates you enter in OnPay, we'll calculate employer and employee contributions with each pay run, leaving employee contribution amounts (if any) in your bank account when payroll funds are drafted.
Payment
Contribution amounts are not included in payroll drafts, leaving the funds available for you to pay your provider.
Employee contributions must be held in trust
Employee contributions to a voluntary plan must be held in trust. This includes interest or other income arising from these contributions from an approved voluntary plan. These funds held in trust are not considered part of an employer’s assets and must be held in a separate, specifically identifiable account in a financial institution.
Reporting
Employer and employee contribution totals are included in your quarterly wage reports, which we file with the state.
Third-party administration
Voluntary plan employers have the option to work with a third party to operate their voluntary plan. If an employer chooses to work with a third party, the employer still carries the legal burden of satisfying the requirements of the program.
Setting up a Paid Leave Equivalent Plan in OnPay
In Payroll>Set up, select Payroll Taxes. If you have employees in multiple states, make sure "Washington" is selected.
Scroll down to "Washington State Paid Family Leave and Medical Insurance Setup", and enter your PFML ID.
Check the box under "Paid Leave Equivalent Plan", to set employer and employee rates.
Two new fields will appear, where you can enter your employer and employee rates. You're not required to enter an employee rate, but if you do, it cannot be higher than 0.5%.
How can this rate be split?
What rates you enter here will depend on your plan. Employers can contribute as much as they want, provided they meet the minimum rate. Employee contributions are allowed, but are not required.
- Employers may choose to contribute more than the minimum rate
- Employers must pay at least 50% of the total premium cost
- Employee deductions cannot exceed what they would have paid if using the public plan
Our Tax Accuracy Guarantee
Bottom line: We take the accuracy of our payroll tax calculations very seriously — and our accuracy guarantee ensures we’ll always have your back.
However, because we file on your behalf using information provided by you, it's important that you provide and input accurate information about your company, its employees, and the states and districts in which they live and your business operates, including all IDs and tax rates. Our Tax Accuracy Guarantee picks up where you leave off by covering all our calculations, and the filings and payments we base on them.
In rare circumstances, OnPay may need additional information from you, or may request you take action in order for us to file and pay your taxes. If such information is requested by us, but never provided by you, any affected tax filings and payments will not be covered by our Tax Accuracy Guarantee.
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