DC's Paid Family Leave Law: A Primer
What is it? In 2017, DC enacted a new law (the Universal Paid Leave Amendment Act or UPLAA) that provides employees that work for DC companies up to eight weeks of paid parental leave to bond with a new child, six weeks of paid family leave to care for an ill family member with a serious health condition, and two weeks of paid medical leave to care for one’s own serious health condition.
What employers does the law apply to? Any business performing services in DC (regardless of the number of employees) that also pays unemployment insurance taxes for its employees will be required to pay paid family leave taxes and afford their employees with the applicable leave.
What employees does the law apply to?
Employees of covered employers (regardless where the employee lives) who spend more than 50% of their work time for that employer working in DC.
Employees of covered employers whose employment for the covered employer is based in DC and who regularly spend a substantial amount of his or her work time for that employer in DC and not more than 50% of his or her work time in another jurisdiction.
How much is the tax? DC employers will be required to pay, on a quarterly basis, 0.62% of their covered employees’ total/gross wages. These quarterly contributions are based on the immediate past quarter of wages paid, in a similar fashion to unemployment insurance tax.
Who pays the employee for the leave? The leave is paid to the employee by DC's Department of Employment Services, not the employer directly. The money comes from a fund paid into by increased payroll taxes that DC employers are responsible for. The maximum weekly benefit as of January 2019 is $1000.
When does the law go into effect? On July 1, 2019, DC will begin the collection of taxes from employers and on July 1, 2020, DC will begin administering paid leave benefits.
What if I already provide my employees with paid leave benefits? The UPLAA does not provide any exemptions for employers with their own sponsored paid leave benefits, and such employers are still required to contribute to the paid family leave program. Employers have the ability to determine whether or not their sponsored paid leave benefits run concurrently with their employees’ use of DC's paid family leave program, but an employee's right to DC's paid family leave benefits is not diminished by an employer’s paid leave policy.
What does this mean for employers? A few things:
Employers will see an increase in payroll taxes collected starting July 1, 2019.
Beginning July 1, 2019, employers will be responsible for posting and maintaining a Paid Family Leave notice in a conspicuous place at their worksites. Employers will also have to provide the notice to employees at the time of hire and annually thereafter as well as at the time the employer becomes aware that the leave is needed.
Some employers may decide to eliminate existing internal paid leave programs (which could be more generous than the UPLAA) to avoid confusion among employees seeking to decide which program to access.
The UPLAA will allow employees to take leave in circumstances where, before, they may not have even been entitled to take even unpaid leave. For example:
Before the UPLAA goes into effect, the DC Family and Medical Leave Act (DCFMLA) provided employees with 16 weeks of unpaid leave, provided the employee had worked for the employer for a year. Under the new law, there is no tenure requirement, so new employees will be able to take leave.
The UPLAA provides paid-leave rights to part-time employees, as long as they worked for the employer at some point in the prior year.
The DCFMLA didn't apply to employers with fewer than 20 employees, but the UPLAA does.
The takeaway is this: The UPLAA is going to increase costs to DC employers in the form of increased payroll taxes, and it's going to increase costs because you're going to have more people eligible to take protected leave and will have to backfill their roles for the time they are on leave. Employers should plan for this, and make sure they comply with eligible requests for leave.