HIGHLIGHTS:

  • District of Columbia Mayor Muriel Bowser has declined to veto the controversial Universal Paid Leave Amendment Act of 2016. The bill, passed in December 2016, will become law after a 30-day period for congressional review.
  • As enacted, the law guarantees eight weeks of paid leave to new parents, six weeks of paid leave to care for sick family members and two weeks of paid self-care leave for employees with serious health conditions, placing it among the most generous paid family leave mandates in the country.
  • The law's main provisions will not take effect until 2020. Meanwhile, the Council of the District of Columbia will consider revisions to the act to address concerns expressed by the mayor and the business community about the expense of the program, the impact on local businesses and the disproportional flow of benefits to workers in the District who live in Maryland or Virginia.
  • Employers should consider changes to the act that would most benefit their companies and communicate proposed revisions to the Council.

District of Columbia Mayor Muriel Bowser on Feb. 15, 2017, declined to veto the controversial Universal Paid Leave Amendment Act of 2016. Although she declined to veto the measure, Bowser returned the bill unsigned to the Council of the District of Columbia and publicly expressed concerns about the expense of the program, the impact on local businesses and the disproportional flow of benefits to employees who work in the District but live in Virginia or Maryland.

The bill, passed in December 2016, will become law after a 30-day period for congressional review. As enacted, the law guarantees eight weeks of paid leave to new parents, six weeks of paid leave to care for sick family members and two weeks of paid self-care leave for employees with serious health conditions. The act is among the most generous paid family leave mandates in the country.

The law's main provisions will not take effect until 2020, and Chairman Phil Mendelson announced recently that the Council will consider revisions to the act to address concerns expressed by the mayor and the business community. On Feb. 21, Councilmembers Mary Cheh and Jack Evans co-introduced the Paid Leave Compensation Act of 2017, and Councilmembers Evans and Vincent Gray co-introduced the Universal Paid Leave Compensation for Workers Amendment Act of 2017. Both bills were introduced to lower the cost of the payroll tax and the creation of a new government bureaucracy.

The Universal Fund

The Universal Paid Leave Amendment Act of 2016 creates a centrally administered Family and Parental Paid Leave Fund to pay out qualifying leave benefits. Each covered employer must contribute .62 percent of the annual salary of each of its covered employees to the fund. Self-employed individuals may also opt-in to the program by contributing .62 percent of their annual self-employment income. Employers who fail to contribute the required amount will face similar penalties to those imposed on employers who fail to contribute to the District's unemployment benefits program.

The act directs the mayor to establish an agency to implement the program and administer the fund. An eligible employee must submit a claim for benefits, and if the agency approves the claim, it will disburse benefits out of the universal fund. The mayor and the agency must further establish procedures for filing claims and regulations to administer the program. Employees who earn an average weekly wage of less than or equal to 150 percent of the minimum wage will receive up to 90 percent of their pay while on leave. Those who make more than this threshold are eligible to receive 50 percent of their annual weekly income, up to a maximum weekly amount of $1,000.

Parental Leave

An eligible employee may take up to eight weeks of paid parental leave within one year of welcoming a new child into a household. This includes the birth of an eligible employee's child, and the placement of a child with the employee for adoption, foster care or legal guardianship.

Family Leave and Self-Care

An employee may take up to six weeks of paid leave to care for a family member after a diagnosis or occurrence of a serious health condition. The act defines serious health condition as "a physical or mental illness, injury, or impairment" requiring either inpatient care (at least one overnight stay) or continuing treatment by a healthcare provider.

The act defines "family member" as a child (including stepchildren, foster children and adopted children), parent (including stepparents, foster parents, in-laws and adoptive parents), spouse, domestic partner or grandparent.

If an employee develops a serious health condition and becomes unable to work, the employee may take up to two weeks of paid leave.

Who is Covered?

The act applies to all entities in the District that employ workers or exercise control over the wages, hours or working conditions of an employee and that are required to pay unemployment insurance in the District. This includes employers that contract for temporary labor through staffing agencies. Companies that rely on subcontractors or temporary staff should ensure that their contracting partners comply with the law. The act does not apply to the federal or D.C. government.

To become eligible for paid leave benefits, an employee must be a "covered employee" for "some or all" of the 52 calendar weeks preceding the qualifying event. To be a "covered employee," an individual must have worked in the District, for a covered employer, for at least 50 percent of his or her working time.

Employee Notice Requirements

Eligible employees must timely notify employers of their intention to use family or parental leave. When practicable, employees should do so in writing and include the expected duration of leave, and at least enough information for the employer to determine that the intended use qualifies for paid leave. If leave is foreseeable, employees must provide notice at least 10 days in advance, but if the leave is unforeseeable, employees need only provide notice as practicable before their next scheduled shift.

Anti-Retaliation Provision

Employers must tread especially carefully in their treatment of workers who exercise their rights under the act. A broad anti-retaliation provision prohibits employers from retaliating against employees who engage in protected activity. Employers may face significant exposure for any adverse employment action suffered by an employee who took paid leave, filed a charge or opposed an unlawful practice under the act.

Employer Notice Requirements

The act calls for the mayor to create a published notice explaining employees' rights to paid family and parental leave. Employers must provide this notice to all employees at the time of hiring and at least annually afterward. Employers must again provide the notice when they become aware that an employee needs family or parental leave.

Considerations for Employers

Given that the main provisions of the law will not be effective until 2020 and are subject to further revision in the meantime, development and implementation of specific compliance policies and practices may be premature. At this stage, employers should instead be considering what changes to the act would be most beneficial for their companies and communicating proposed revisions to the Council.