On April 25, 2022, Judge Zilly of the US District Court for the Western District of Washington dismissed a class action lawsuit filed on behalf of employers and employees challenging the WA Cares premium assessed at the rate of .58 percent of wages violated ERISA and other federal laws.
The federal court dismissed the lawsuit on the basis that the WA Cares Act is not established or maintained by an employer and/or employee organization and therefore, is not governed or preempted by ERISA. The Court also held that the premiums assessed by the WA Cares Act constitute a state tax. Because the federal court lacks jurisdiction over state tax, only state courts have jurisdiction to rule on the WA Cares Act.
Employers who have at least one employee working in Washington should monitor the developments as further updates and changes are expected in the coming months.
Washington DSHS: Federal Court Dismisses Lawsuit Filed Against WA Cares Fund »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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