December 08, 2020

Council of the District of Columbia Adopts Several Measures That Will Impact Business Operations in DC

5 min

On Tuesday, December 1, 2020, the Council of the District of Columbia (the Council) gave initial approval for several measures that will impact businesses in the District of Columbia. These measures will:

  • Create a new "DC Department of Buildings"
  • Institute a ban on employee non-compete agreements
  • Institute a ban on cashless-only transactions for most retailers

In addition, the Council gave preliminary approval for a bill that will require employers to rehire eligible workers who were laid off due to the COVID-19 pandemic.

The Council also gave final approval for the False Claims Amendment Act of 2020.

Each measure is described in detail, below.

The Department of Buildings Establishment Act of 2020

This Act will remove certain functions from the Department of Consumer and Regulatory Affairs (DCRA) and place those functions in a new government agency, to be called the Department of Buildings. Specifically, this agency will be established to interpret and enforce zoning laws and regulations, and housing and building codes; maintain and produce legal records pertaining to all privately owned and government-owned land plats and subdivisions; regulate construction, in accordance with the Green Buildings Act; enforce construction code compliance; and issue building and related permits.

All other licensing and consumer protections will remain under the jurisdiction of DCRA, which will be renamed the Department of Licensing and Consumer Protection.

Non-Compete Agreements Amendment Act of 2020

This measure bans employers from requiring their employees to sign non-compete agreements as a condition of employment. Medical specialists are excluded from this ban, provided that the employer complies with certain conditions prior to execution of a non-compete agreement.

This bill confers upon the mayor and the attorney general enforcement power against employers who fail to comply with the ban, including the imposition of civil fines. Employees also may file administrative complaints against employers, for civil action that may result in the award of damages.

Cashless Retailers Prohibition Act of 2020

Citing the problems of many of the District's low-income, unbanked citizens, this bill prohibits retailers from discriminating against cash as a form of payment. If passed, this bill will prohibit retailers from:

  • Refusing to accept cash as a form of payment
  • Posting signs that cash payments are not accepted
  • Charging customers different prices based on their payment method

Failure to comply with this prohibition will be treated as an unlawful trade practice and will be subject to civil fines.

Exceptions to the cashless prohibition include:

  • Retail sales made via telephone, mail, or Internet
  • Parking facilities that did not accept cash payments as of December 1, 2020

If passed, the ban on cashless payments will not go into effect during the public health emergency.

Displaced Workers Right to Reinstatement and Retention Amendment Act of 2020

This bill requires employers in the restaurant, hotel, and retail industries; and owners and operators of entertainment venues to offer reinstatement to eligible workers who were laid off as a result of the COVID-19 pandemic, when the employer starts rehiring after the pandemic. The provision applies only to employers with at least 35 employees. This right to reinstatement will apply, even if there is a change in ownership of the business that initially laid off the affected employees. The proposed law also will allow third parties to sue on behalf of workers whose employers have not complied with the reinstatement provisions of the Act.

The Council gave preliminary approval for the Act on December 1, 2020. If the law is enacted, it will not take effect until February 21, 2021, to give employers time to prepare for the reinstatement of former employees.

False Claims Amendment Act of 2020

This proposed amendment to the District's False Claims Act will expand that law to include matters involving District taxes that previously were excluded. Persons who knowingly commit tax fraud in excess of one million dollars for any tax year could be subject to civil penalties imposed by the False Claims Act, including treble damages.

In addition, any person who reports such tax fraud to the District may be eligible for a reward, not to exceed 30% of the proceeds collected as a result of their report.

This bill received final approval on December 1, 2020. It will be sent to the mayor for signature and, subsequently, transmitted to the U.S. Congress for the 30-day legislative review required under the District's Home Rule Charter.

Mayor Muriel Bowser's Legislative Letter

In a letter to Council Chair Phil Mendelson, dated December 1, 2020, Mayor Bowser expressed concern that the legislation being considered by the Council would result in unfunded mandates of $34.56 million in Fiscal Year 2021 and $149, 137, 650 over the course of the District's four-year financial plan. These unfunded mandates were of particular concern because the District's chief financial officer had already forecasted a significant downturn for the next three fiscal years resulting from the adverse economic impact of COVID-19.

Mayor Bowser also expressed concern that several of the bills, including bans on cashless businesses and non-compete agreements, and the requirement to reinstate workers laid off because of the COVID-19 pandemic, could put a strain on the District's businesses that currently are struggling to survive the pandemic. Despite noting these concerns, the mayor did not indicate that she would veto any of these measures.

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The Council will hold its last legislative session for Council Period 23 on December 15, 2020. The measures described in this alert are expected to receive final approval during that session, except as noted above, for the Displaced Workers Right to Reinstatement and Retention Amendment Act of 2020 and the False Claims Amendment Act of 2020. In addition, the Council is expected to take action to extend many of the COVID-19 relief measures that were established in response to the current resurgence of the COVID-19 outbreak in the District.

For additional information, contact:

Claude E. Bailey