Notwithstanding opposition from Mayor Muriel Bowser,1 Washington, DC recently enacted the Universal Paid Leave Amendment Act (the “Act”)—one of the nation’s most generous paid family leave laws. The Act applies to nearly all private employers2 in DC, regardless of size, and, beginning July 2020, will provide certain employees with employer-funded paid leave for up to (i) eight weeks to care for a new child (by birth, adoption, or foster care placement), (ii) six weeks to care for a family member with a serious health condition, and (iii) two weeks for personal illness.
Benefits Under The Act
Part-time and full-time employees who spend more than 50% of their work time in DC are eligible for coverage, provided that they have worked for a covered employer at any point during the 12-month period preceding the qualifying event. An employee’s personal residence is irrelevant to eligibility. Therefore, employees who reside in Maryland or Virginia, for example, but work for a covered employer in DC may be eligible for benefits. Eligible employees may take no more than eight cumulative weeks of paid leave in a 52-week period, and benefits under the Act will run concurrently with, not in addition to, the Federal and DC Family Medical Leave Acts.3
Benefits will be funded by a 0.62% payroll tax, collection of which is scheduled to begin on July 1, 2019. Eligible employees will have access to benefits starting July 1, 2020. Covered employers will be required to provide notice of the Act to their employees, and such notice must inform employees that they may file a complaint for employer interference or retaliation in connection with an attempt to exercise any of their rights under the Act.
Potential Changes to the Act
Efforts to modify the Act are already underway. On February 21, 2017, DC Council members introduced two alternative bills, the Paid Leave Compensation Act of 2017 (the “PLCA”) and the Universal Paid Leave Compensation for Workers Amendment Act (the “UPLCWAA”). The PLCA would provide the same amount of paid leave as provided under the Act, but it would lower the payroll tax from 0.62% to 0.20% for large employers, those “with 50 or more employees or whose annual payroll equals $3.5 million or more” and 0.40% for small employers, those “with between [five] and 49 employees and whose annual payroll equals less than $3.5 million.” Under the PLCA, large employers would be required to self-administer the benefits, while DC would run the program for small employers. The UPLCWAA would also provide the same amount of paid leave as provided under the Act, but it would limit the payroll tax to 0.1% and exempt employers with fewer than 50 employees. Both bills are under review and consideration.
Although employees will not be able to claim benefits under the Act until July 1, 2020, employers should start familiarizing themselves with the Act now, and they should review their leave policies to ensure compliance.
DC is just the latest local or state government to pass legislation guaranteeing paid family leave for employees in the private sector. As detailed in our previous alert, New York passed a paid family leave law last year, the implementation of which will be phased in beginning January 1, 2018. This law will ultimately entitle New Yorkers up to 12 weeks of job-protected paid leave. Employees in California, New Jersey, and Rhode Island are already entitled to such leave (six weeks for employees in California and New Jersey and four weeks in Rhode Island). Although the State of Washington passed a paid family leave law in 2007, the law has not yet been implemented.
This is a developing area, and employers should monitor these developments closely.