Washington's Paid Family Medical Leave program is expanding in 2026, creating new economic hardships for thousands of small businesses. When the Legislature originally created the Paid Family and Medical Leave program, Washington's smallest businesses were exempt due to the impact of the leave requirements on their operations. During the 2025, the Legislature expanded requirements for small businesses through HB 1213, despite opposition from BIAW, local governments, retail, hospitality and other industry associations.

The following information comes directly from the Paid Family and Medical Leave program.

Legislature expands requirements for Paid Family Medical Leave

Starting Jan. 1, 2026, new job protection requirements for employees returning from Paid Leave will apply to all employers with 25 or more employees, even if businesses have a voluntary plan. Currently, job protection requirements pertain only to employers with 50 or more employees.

New requirements beginning in 2026 for businesses with 25 or more employees

The new law says businesses need to restore employees to the same or equivalent job title, pay and benefits, and working conditions if employees both:

• Return from Paid Leave on or after Jan. 1, 2026.
• Started working at least 180 days before their leave starts.

The new law also requires businesses to:

• Maintain the health insurance of employees on Paid Leave as if they were still working.
• Notify employees after they are on Paid Leave for a total of 14 days about when their job protection will expire and when they are expected to return to work.

The new law also removes the requirement that employees need to work a minimum number of hours before taking leave to get job protection.

You can read the new law on the Washington State Legislature website.

If a business had 25 or more Washington employees at any point in the current or preceding calendar year, they are considered to have met the size requirement for job protection.

More resources coming soon

Throughout the rest of the year, the Paid Leave program will share more information and links that will help businesses get ready for changes happening in 2026:

• Job protection examples and templates.
• Guidance about managing job protection when an employee is also using FMLA (Family Medical Leave Act).
• Small business assistance grants that can help with costs related to these law changes.
• Reduced requirement for missed number of work hours for employees on leave.
• The 2026 premium rate, Social Security cap and weekly benefit amount.

They will announce this information later this month on the Paid Leave website updates page.

Paid Leave calculated business sizes on Sept. 30 for 2026

The Paid Family & Medical Leave program calculated business sizes to determine employer premiums and eligibility for grants. To do this, they averaged the employee headcount businesses reported during the previous four quarters. The average includes reports businesses filed as "no payroll."

If a business' size changed, they will mail a letter in October to notify them.

If they calculated that a business has 50 or more employees, the business will be responsible for paying the full Paid Leave premium rate on wages paid Jan. 1 to Dec. 31, 2026. The full premium rate includes the employer’s and employee’s share. The first report for these premiums will be due in April 2026.

If they calculated that a business has fewer than 50 employees, beginning Jan. 1, 2026, the business will not be responsible for paying the employer share of premiums. They still need to remit the employee portion.

Businesses may choose to contribute the full premium rate to the program by opting in annually. The enrollment period for calendar year 2026 is open until March 1.

Businesses may also be eligible for Small Business Assistance Grants when they have an employee on Paid Leave. If approved, they will be responsible for paying the full employer premium rate for three years.

Find more information about premium rates and withholding in the Employer Reporting & Premiums Toolkit.

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