Opinion: Voluntary exemption season on payroll tax for WA Cares is open

In the absence of full repeal, Elizabeth Hovde suggests that workers in the voluntary exemption categories need to check out the WA Cares Fund exemption page

Elizabeth Hovde
Washington Policy Center

How’s it going for people allowed to seek “voluntary” exemptions from the WA Cares Fund? Laura Parker, a long-haul trucker, was not pleased with the process.

“I’ve just wasted 30 minutes trying to get an exemption from the Washington Cares Act,” she said. The trucker lives out of state but drives for a company in Vancouver, Wash. Her employer, fortunately, did what the state hasn’t done well: Let workers know about a coming payroll tax that will impact household budgets — or that they don’t have to pay the tax if they fit an exemption category, initiate the necessary paperwork and get state approval to their employer in time.

The four exemption categories apply to people who —

live outside of Washington.
are the spouse or registered domestic partner of an active-duty service member of the United States armed forces.
have non-immigrant work visas.
are veterans with a 70% service-connected disability rating or higher.

Why can these people get out of the tax (voluntarily)? Because they won’t be able — or won’t need — to use a benefit from WA Cares. How is that different from the rest of workers who will be hit with a 58-cent tax on every $100 they earn this summer? Those four groups are told from the outset they won’t be eligible for WA Cares. Other workers only might not be eligible. We’ll have to wait and see.

Making an exemption something workers need to seek out, rather than something automatically provided to them, will likely result in some workers paying into the program, at least for a short until they notice more money missing from their checks. The law’s fine print explains they will not receive reimbursements.

Instead of a widespread information campaign about these voluntary exemptions, the state does have a glossy, full-court-press marketing plan that is trying to make people feel good about WA Cares before the payroll tax begins in July. It is erroneously leading people to believe that WA Cares is going to have their backs for any possible long-term-care needs they or their family members have. It won’t always.

Many people won’t qualify for the “peace of mind” social program the state is peddling — including a lot of workers who will be paying the payroll tax for years.

For starters, not everyone will need long-term care. While that’s fortunate, some workers will have paid in for a benefit they cannot receive, even though they’ll need money for other life needs. Other people — even those who do need long-term care — will move out of state after their working years. There is no WA Cares benefit for them. It’s not portable. Next up, there will be many who won’t have paid in for 10 years without a break of five or more years. This will include many family caregivers — some of whom take care of family members with long-term-care needs. Ouch.

Even people who do qualify for the $36,500 lifetime benefit attached to WA Cares will find it is inadequate for most people’s long-term care. If they’re people with limited means, they could still end up using Medicaid’s long-term-care benefits that taxpayers provide — just as they could have before the state took more of their wages during their working years.

We already have a safety net. Lawmakers should work to protect that safety net for people in need, not take away money from low-income workers and give it to people not in need.

In the absence of full repeal, the only true fix for the inappropriately named program that doesn’t care about letting people have more of their earnings available for all of their life needs, workers in the voluntary exemption categories need to check out the WA Cares Fund exemption page. And employers should keep doing the unenviable job of making employees aware of their coming pay cut.

Elizabeth Hovde is a policy analyst and the director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.

In the absence of full repeal, Elizabeth Hovde suggests that workers in the voluntary exemption categories need to check out the WA Cares Fund exemption page

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