What a Washington Employer Actually Has to Do for WA Cares in 2026

2026-10-17 · RKube Services

WA Cares takes 0.58% of every Washington employee's wages with no cap. What employers withhold, how they report it with Paid Leave each quarter, and how exemptions work in 2026.

Washington's long-term care program, the WA Cares Fund, is now paying benefits statewide. For employers, though, the work hasn't changed much since premiums started in July 2023: withhold 0.58% of every Washington employee's gross wages, report it with Paid Leave every quarter, and stop withholding only for workers who hand you an approved exemption.

That last part is where small employers in Seattle, Spokane and Tacoma get tripped up. Exemptions are the employee's job to apply for, but the employer is the one who has to keep the letter, start and stop the deduction on the right date, and refund premiums taken after an exemption kicked in. Two 2026 changes add to the list: nonimmigrant visa holders became automatically exempt on January 1, 2026, and workers with the old private-insurance exemption can now cancel it and rejoin.

This guide covers what employers owe, the premium math, every exemption pathway and what you do with each, the 2026 changes, a worked example and a quarterly checklist. It's written for employers in Seattle, Spokane, Tacoma, Bellevue and Vancouver, Washington.

Sources: the WA Cares Fund's employer information page, exemptions page and how-it-works page, run by the Washington Employment Security Department (ESD), and ESD's Paid Leave employer help center, all read in October 2026.

WA Cares for employers in one table

What employers have to do

ESD's employer page lists the duties in plain terms. Every quarter you report each Washington employee's wages and hours and pay the premiums. Since the fourth quarter of 2023, WA Cares has gone on the same report as Paid Leave, so there's no separate WA Cares filing.

You don't owe any share yourself. The premium is employee-paid. You can elect to cover some or all of it for your staff, which some small employers do as a benefit, but you don't have to.

Who you withhold from: all Washington workers, whether full-time, part-time or temporary, unless they have an approved exemption. Three groups don't contribute at all: federal employees, employees of tribal businesses unless the tribe has opted in, and self-employed people, who earn benefits only if they opt in on their own.

The premium math

The formula is one line: gross wages x 0.0058.

What makes it different from Paid Leave is the cap. Paid Leave premiums stop once an employee's wages pass the Social Security taxable maximum. WA Cares keeps going on every dollar. A salesperson earning $300,000 pays $1,740 a year in WA Cares premiums, while the Paid Leave premium stops partway through the year.

If your payroll software was set up by copying the Paid Leave deduction, check that the WA Cares line doesn't inherit the wage cap. That's one of the most common setup errors we see for high earners.

The exemption pathways

Exemptions exist for workers unlikely to use the benefit. The WA Cares exemptions page lists these pathways for current applicants:

• You live outside Washington. Common in Vancouver (Oregon residents) and Spokane (Idaho residents).
• Active-duty service members with an off-duty civilian job.
• Spouses or registered domestic partners of active-duty service members.
• Veterans with a 70% or higher service-connected disability rating.

Two others work differently:

• Nonimmigrant work visa holders have been automatically exempt since January 1, 2026. They don't need to apply. A visa holder who wants to keep contributing must tell each employer in writing.
• The private long-term care insurance opt-out was open only from October 1, 2021, to December 31, 2022, for people who had private coverage by November 1, 2021. Those approved are permanently exempt. No new applications are taken.

Some exemptions are permanent and others last only while the worker still qualifies. An out-of-state resident who moves to Washington, for example, no longer qualifies.

What you do with an exemption letter

The employee applies to ESD, not you. If ESD approves, it mails the employee an approval letter showing the date the exemption takes effect, which is the first day of the quarter after approval. The employee gives a copy to every current and future employer.

Once you have the letter, ESD's employer page says you must:

1. Keep a copy of the approval letter on file.
2. Stop deducting WA Cares premiums starting on the effective date shown on it.

If you keep withholding after the exemption takes effect and after the employee gave you the letter, you have to return those premiums to the employee. If the employee never gave you the letter, the exemptions page says you aren't responsible for returning premiums collected after the effective date.

The employee also carries a duty going forward. Anyone who stops qualifying has to notify ESD and every employer within 90 days. Failing to do so can mean back premiums, paid by the employee, plus penalties. When an employee tells you their exemption ended, start withholding again.

Employees who lose their letter can download it from their WA Cares exemption account or call ESD for copies. If someone says they're exempt but can't produce a letter, keep withholding until they can.

The 2026 changes employers should act on

Visa holders. Since January 1, 2026, workers on nonimmigrant work visas are exempt without applying. Review your roster for employees on H-1B, L-1, TN, E-3 and similar visas, and confirm your payroll stopped their WA Cares deduction as of the first 2026 paycheck unless they asked in writing to keep contributing. Keep any opt-in request with the employee's payroll file.

Rejoining from the private-insurance exemption. A Washington law signed by the governor lets anyone with the old private long-term care insurance exemption cancel it between January 1, 2026, and June 30, 2028. The employee cancels through their WA Cares exemption account, and ESD mails a discontinuation letter. When an employee hands you that letter, start withholding again once the exemption ends. Expect a few of these as employees with older private policies reconsider now that WA Cares benefits are being paid.

A worked example: a Spokane bakery with 8 employees

A bakery in Spokane has eight employees and $96,000 in gross wages for the fourth quarter of 2026.

• One employee lives in Coeur d'Alene, Idaho, and was approved for the out-of-state exemption in June 2026. The exemption took effect July 1, 2026, and she gave the bakery her approval letter in July. Her fourth-quarter wages: $11,000.
• One pastry chef works on a nonimmigrant visa and hasn't asked to opt in. Her fourth-quarter wages: $14,000.
• The other six employees have no exemptions. Their combined wages: $71,000.

The fourth-quarter WA Cares premium is $71,000 x 0.58% = $411.80. Without the two exemptions it would have been $96,000 x 0.58% = $556.80.

Two things to check:

• The Idaho employee. The bakery got her letter in July but didn't update payroll until mid-August. Paid weekly at about $846 a week, she had WA Cares withheld from six paychecks after the July 1 effective date, about $4.91 each, roughly $29.44 in total. Because she had already given the bakery the letter, those premiums have to go back to her. The bakery refunds her on the next paycheck and corrects the third-quarter report through ESD.
• The visa holder. The bakery's payroll provider stopped her deduction on January 1, 2026, when the automatic exemption began. The owner keeps a short note in her file confirming she didn't ask to opt in.

Every quarter, the bakery reports all eight employees' wages and hours on the combined Paid Leave and WA Cares report, with exempt workers flagged as the ESD system requires.

Common mistakes

• Stopping on the wrong date. The exemption starts on the effective date on the letter, not the date it arrived, and never before you have a copy.
• No letter on file. A verbal "I'm exempt" isn't enough. Keep a copy of the ESD approval letter.
• Capping WA Cares like Paid Leave. WA Cares has no wage cap.
• Forgetting visa holders. Since 2026 they're exempt by default. Withholding from them without a written opt-in creates refunds to sort out.
• Not restarting. When an employee's exemption ends, or they hand you a discontinuation letter for the private-insurance exemption, the deduction has to come back.

Quarterly checklist for Washington employers

1. Confirm the WA Cares deduction is 0.58% of gross wages with no cap for every non-exempt Washington employee.
2. Review new hires for exemption letters, visa status and out-of-state residence.
3. File any new approval or discontinuation letters and update payroll for the right effective date.
4. Refund any premiums withheld after an exemption's effective date once the employee gave you the letter.
5. Use a clear paycheck label, "WA Cares Fund" or "WA Cares LTC."
6. File the combined Paid Leave and WA Cares quarterly report and pay both programs.
7. Keep exemption letters, opt-in notes and refund records with your payroll files.

Questions Washington employers ask

Do I pay part of WA Cares? No. It's an employee premium. You can choose to pay some or all of it for your employees.

Is there a wage cap? No. The 0.58% applies to all gross wages, unlike Paid Leave.

An employee says they're exempt. What do I need? A copy of their ESD approval letter. Stop deducting from the effective date shown on it.

Do I have to refund premiums I already took? Only those withheld after the exemption's effective date, and only if the employee had given you the letter.

Are H-1B employees exempt? Since January 1, 2026, nonimmigrant work visa holders are automatically exempt unless they tell you in writing that they want to keep contributing.

Can an exempt employee rejoin? Workers with the old private long-term care insurance exemption can cancel it between January 1, 2026, and June 30, 2028. They'll give you a discontinuation letter, and you restart withholding.

This guide is general information based on the WA Cares Fund and ESD employer and exemption pages as read in October 2026. It isn't tax or legal advice for your situation.

If exemption letters are piling up in a drawer instead of in payroll, RKube Services can help set up the tracking.