Yesterday, the D.C. Council Committee of the Whole held an advocates-only hearing on the Universal Paid Leave Act of 2015 (Act), which was introduced on October 6, 2015 by a majority of councilmembers. As introduced, this bill establishes a paid leave system for all District of Columbia (District) residents and all workers employed in the District. It allows for up to 16 weeks of paid family and medical leave, which would more than double the amount of weeks (and dollar cap) of any U.S. state-sponsored paid-leave program. While other state paid family and medical leave programs are paid by the employees themselves, the benefits for employees of a “covered employer” (i.e., private companies in the District) would be funded by a one percent payroll tax on the employer. There has been talk of setting a minimum threshold of employees (i.e., 15-20 employee minimum) for an employer to be covered by the Act, although such a requirement does not exist in the current draft. Because the District cannot tax the federal government or employers outside its borders, District residents working for one of these entities are required to contribute to the fund individually. This would result in a strange dynamic that taxes District residents differently based on whether they work for a covered employer or not. Self-employed District residents have the ability to opt-out altogether (and not contribute to the fund or receive benefits) under the Act.

The definition of “covered employee” is drafted in such a way that temporary and transitory employees (i.e., “employed during some or all the 52 calendar weeks immediately preceding the qualifying event”) could claim the full 16 weeks of benefits and have no obligation to return to the job. The Act does exclude employees that spend more than 50 percent of their time working in a state other than District; however, this exclusion would not apply to employees that do not spend a majority of their time in any one state.

A qualifying individual is one who becomes unable to perform their job functions because of a serious health condition or to care for a family member with a serious health condition or a new child. Claims are filed with the District Government and the District must notify the employer within five business days of a claim being filed. Beneficiaries will receive 100 percent of their average weekly wages (up to $1,000 per week) plus 50 percent of their average weekly wages in excess, with a weekly cap of $3,000.

Practice Note:

Advocates testifying yesterday expressed concerns that the proposed one percent rate (considered high by many) is unrealistic and would fall significantly short of funding the generous benefits—although no definitive data is available at this time. Aside from highlighting the unprecedented breadth of the benefits, many advocates also noted the significant loopholes in the current draft that could lead to unintended—and potentially unconstitutional—consequences, if passed. At this point, it appears that the Council has their work cut out for them to gain the support of the business community. One (or more) public hearings will also be held on the Act, with the first tentatively scheduled for January 2016. If the Act is passed next year, it will be interesting to see whether Congress will disapprove via joint resolution, as permitted by the Home Rule Act. Any such disapproval must be signed by the President, who has publicly expressed support of the Act.