D.C. Universal Paid Family Leave Bill Submitted To Congress, But Changes Are Still Possible

The D.C. Universal Paid Leave Amendment Act of 2016 (the “Act”) has been submitted to Congress for a 30-legislative-day period of review. Presuming that the Act does not get overturned by Congress and the President, it is projected to become law on April 7, 2017. As we previously reported (here and here), the Act provides employees up to eight (8) weeks of paid leave, funded by a new payroll tax of 0.62% imposed on employers. Even if the Act becomes law, under the current version of the Act, employers would not be subject to the new tax until July 1, 2019, and employees would not be able to access the paid leave benefit until July 1, 2020.

Despite the Act’s recent submission to Congress, efforts are afoot to change the Act. Councilmembers Mary Cheh and Jack Evans introduced one such modification on February 21. This new proposed legislation, the Paid Leave Compensation Act of 2017 (B22-130), would provide the same guarantees for time off but would lower the payroll tax from 0.62% to:

  • 0.20% for large employers, defined as employers “with 50 or more employees or whose annual payroll equals $3.5 million or more”; and
  • 0.40% for small employers, defined as employers “with between 5 and 49 employees and whose annual payroll equals less than $3.5 million.”

Large employers would be required to administer the benefits on their own, while the D.C. government would run the program for small employers.

Also on February 21, Councilmembers Jack Evans and Vincent Gray introduced another alternative bill, the Universal Paid Leave Compensation for Workers Amendment Act of 2017 (B22-133). This proposal would eliminate the creation of a government run program, would require all employers to purchase private insurance that would provide employees with pay during covered time off, and would lower the payroll tax to an amount not to exceed 0.10%. In addition, this payroll tax would not apply to small businesses with fewer than 50 employees.

Whether the Act survives Congressional scrutiny, and how and whether these newly introduced bills, and possibly other forthcoming paid family leave proposals, will impact the Act remains unclear.  Stay tuned for future updates, as we continue to monitor this issue.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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