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Premium Pay

The Paid Leave Ordinance allows employers to enact an approved Premium Pay Program (sometimes referred to as Pay in Lieu of Benefits) and provide employees with extra pay instead of Paid Leave hours.

 

Applications for Premium Pay Program proposals must be submitted for review at least 90 days in advance of the intended start date.


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Premium Pay Programs are evaluated based on how the proposed extra pay compares to the value of benefits outlined in the Paid Leave Ordinance, including the following criteria:
  • Premium pay must meet or exceed the value of the Paid Leave benefit outlined in the Ordinance
  • Extra pay must be readily available for expenditure, similar to wages, and not placed in a restricted account such as a retirement or flexible spending account unless mutually agreed upon by the Employee and Employer
  • Extra pay cannot be provided in the form of goods/services
  • Extra pay must be dispersed at reasonable intervals, not less than once per month, or "frontloaded."

Additional criteria may be applied as deemed necessary by the Director. A written determination will be issued within 60 days unless a formal extension is issued in writing. If a Premium Pay Program is not approved, the specific criteria that resulted in such a determination will be disclosed to the Employer.

 

Additional information available in the Paid Leave Ordinance and Paid Leave Rules