The Act, if it becomes law, would be one of the most generous paid leave laws in the nation.
On December 20, 2016, the Council of the District of Columbia (Council) passed the Universal Paid Leave Amendment Act of 2016 (Act) by a 9–4 margin. This was the Council’s second attempt at passing a paid leave law after earlier efforts stalled in 2015. On February 16, 2017, Mayor Muriel Bowser permitted the Act to progress in the legislative process without her signature.
The Act is one of the most generous paid leave programs in the United States, providing up to eight weeks of employer-funded paid leave. Benefits will be paid from a fund established by the mayor; employers will pay into this fund through mandatory contributions, much like an unemployment compensation fund. Because the Act will require a significant period for implementation, its impact on employers likely will not be felt until 2019.
The Act provides for varying lengths of paid leave within 52 weeks of the occurrence of a qualifying event, depending on the type of leave:
The total amount of leave any individual may take in a 52-week period may not exceed eight weeks in the aggregate. Leave under the Act may be taken intermittently so long as the paid leave is taken in increments of no less than one day. Any leave taken under the Act will run concurrently with, and count toward, unpaid leave under the Family and Medical Leave Act (FMLA) and the DCFMLA.
The Act applies to employees who work for private employers in the District of Columbia, regardless of an individual’s state of residence or an employer’s size. The employee must spend more than 50% of his or her working time in the district, or a substantial amount of his or her working time in the district and not more than 50% of his or her working time in another jurisdiction. Self-employed district workers also have the option to opt into the program provided they meet certain criteria. Federal and district government employees are excluded from the Act. Individuals who receive long-term disability payments, unemployment insurance payments, or self-employment income are prohibited from simultaneously receiving paid leave benefits.
The Act provides that benefits will be paid from a Universal Paid Leave Fund (the Fund), which the district government will establish and administer. Covered employers are required to pay into the Fund in the amount of 0.62% of the wages of each of its covered employees, subject to reduction if the Fund should run a surplus after three years.
There remain many issues to be addressed regarding the Fund. For example, within 180 days of the Act’s effective date, the mayor is required to prescribe the manner in which employers will make contributions to the Fund—and there have already been questions raised regarding whether the 0.62% contribution rate will be sufficient to cover the startup and system implementation costs. The Act further requires the mayor to create a user-friendly online portal for submitting claim forms and supporting documentation. This portal must be publicly accessible and designed with a privacy-protected, searchable interface to provide relevant information to claimants, employers, and the public.
Each covered employer is required to provide notice to its employees regarding their rights under the Act on three separate occasions: at the time of hire, on an annual basis, and whenever the employer becomes aware that leave is needed. The employer must also post the notice in a conspicuous place; it must be posted in English and in any other language in which the mayor has published it.
Notice and posting violations will result in civil penalties of up to $100 for each employee to whom notice was not provided, and up to $100 for each day the employer failed to post the notice. The Act makes it unlawful for any person to interfere with, restrain, or deny the exercise or attempted exercise of any right provided under the Act. Finally, the Act provides for a private right of action for up to one year after the occurrence or discovery of an alleged violation of the Act.
Now that the mayor has permitted the Act the move forward, the final step in the legislative process is a mandatory 30-day congressional review period. Congress has the ability to block implementation of the Act—so as it stands now, the effective date of the Act is unclear.
Council Chairman Phil Mendelson has stated that the district government would need 18 months to develop the software, programming, and other requirements necessary to begin collecting employer contributions and administering benefits. Thus, it is unlikely that the district would begin collecting employer contributions until sometime in 2019.
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