On April 7, 2017, the D.C. Universal Paid Leave Amendment Act (the "Act") became law. In sum, the Act requires all District of Columbia (D.C.) employers, regardless of size, to provide employees with paid leave, including up to eight (8) weeks of family, parental, and/or medical leave each year. The leave benefits will be financed by a .62% payroll tax imposed on covered employers and will be administered by the D.C. government in a manner similar to the administration of unemployment insurance claims. Although the Act has been passed into law, employers will not be required to begin paying the tax until the Mayor establishes the manner in which the city will collect contributions. Under the Act, the Mayor must begin to collect contributions no later than July 1, 2019 and begin to pay out benefits to employees no later than July 1, 2020.
Which employers and employees are covered?
Employers – The Act applies to all employers who are required to pay unemployment insurance on behalf of its employees, excluding the Federal and D.C. governments and employers D.C. is prohibited from taxing.
Employees – An employee is covered by the Act if he or she spends more than 50% of his or her work time in D.C. and has worked for a covered employer at any time during the twelve (12) month period preceding the event for which leave is requested. It is important to note that an employee's personal residence is irrelevant to the determination of coverage. As such, employees who reside in Maryland and Virginia, but work in D.C., will be entitled to benefits provided by the Act.
What benefits are provided?
Under the Act, a covered employee is entitled to:
- Up to eight (8) weeks of parental leave following the birth, adoption, or the foster care placement of a child;
- Up to six (6) weeks of family leave for purposes of providing care or companionship to a family member precipitated by the diagnosis or occurrence of the family member's serious health condition; and
- Up to two (2) weeks of medical leave for the diagnosis or occurrence of the employee's own serious health condition.
Notwithstanding the foregoing, an employee may not take more than eight (8) weeks of any combination of above-described leave in a fifty-two (52) week period.
Employees will receive up to a maximum of $1,000 per week during the leave period. Specifically, employees who earn 150% or less than D.C. minimum wage, which will be $15/hour or 600 per week in 2020, will be paid at a rate equal to 90% of their average weekly wage rate; and employees who earn 150% more than D.C. minimum wage will be paid at a rate equal to 90% of 150% of the D.C. minimum wage, plus 50% of the amount by which the employee's average weekly wage rate exceeds 150% of the D.C. minimum wage, up to $1,000 per week.
For example:
- Employees who earn the 2020 minimum wage, $600 per week, will receive $540 per week or 90% of their weekly wages.
- Employees who earn $900 per week, or 150% of minimum wage, will receive $810 per week or 90% of their weekly wages.
- Employees who earn $1,100 per week will receive $910 per week, or 90% of the first $900 of their weekly salary and 50% of the remaining $200.
- Employees who earn $1,280 or more will earn the maximum benefit of $1,000 per week.
How are the benefits administered?
In order to receive the paid leave benefits, employees will be required to submit claims to the D.C. government in accordance with procedures to be established by the Mayor. Within five (5) days of receiving the employee's claim, the D.C. government will notify the employer.
Employees also are required to provide employers with at least ten (10) days written notice of the need to use leave, if the need is foreseeable. If the need for leave is not foreseeable, verbal or written notification must be submitted prior to the beginning of the first shift for which the employee will be absent, except in cases of emergency where notification is required within forty-eight (48) hours of the emergency.
In addition, under the Act, the Mayor is required to implement regulations that will provide further guidance to employers.
How does the law work with other employment laws and policies?
Paid time off policies – The Act's benefit entitlements must be provided in addition to, and not in lieu of, any paid leave benefits offered by the employer.
Family medical leave laws – The leave provided by the Act runs concurrently for any leave to which an employee is entitled under federal and/or D.C. family and medical leave laws. Said differently, any leave available under the Act is not in addition to other family and medical leave provided by law.
Is there a possibility the law will change prior to the commencement of the tax imposition on employers?
It is important to note that the law in its current form may change in the near future. In response to the business community's opposition to the law, at least two alternative bills have been proposed by D.C. Council members. The first piece of proposed legislation would lower the payroll imposed on employers, whereas the second would not only lower the payroll tax, but also make the tax inapplicable to employers with less than fifty (50) employees.