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Update on Universal Paid Leave – D.C. On Track to Collect Employer Contributions in 2019

In December 2016, the D.C. Council approved the Universal Paid Leave Amendment Act (UPLAA), significantly expanding paid leave benefits for non-governmental employees working in the District.  Despite efforts by Council members and advocacy groups to rescind or significantly amend the law – and despite initial fears that the law would be vetoed by either the mayor or by Congress – the District is reportedly on track to begin collecting employee contributions in July 2019, and to be paying out paid leave benefits in 2020.

Nonprofit employers should carefully track UPLAA’s implementation and should begin to plan for the Act’s potential impact on their organizations.

Background on UPLAA

UPLAA provides employees who work a majority of their time in D.C. with up to eight weeks of paid parental leave to bond with new child, six weeks of paid family leave to care for a sick relative, and two weeks of paid personal medical leave each year. Employees can take a mix of different leave types and can take leave on an intermittent, day-by-day basis, but cannot claim more than eight weeks of total leave per year.

Before the passage of UPLAA, D.C. employees were only legally entitled to up to 16 weeks of unpaid family and medical leave under the D.C. Family and Medical Leave Act (DCFMLA) and up to seven days of paid sick/safe leave under the D.C. Accrued Sick and Safe Leave Act. UPLAA’s benefits will run concurrently with DCFMLA, meaning that an employee may only take leave under one – not both – of these programs for each qualifying event.

Employers of any size are covered by the Act, and self-employed individuals may also choose to opt into the system; this is in contrast with the DCFMLA, which exempts organizations with under 20 employees. UPLAA also provides benefits to covered employees who have worked for any period of time within the preceding 52 weeks for a covered employer; this is broader than the DCFMLA, which requires employees to work for at least one year before they can access benefits. UPLAA’s benefits also extend to all part-time employees, in contrast with the DCFMLA’s requirement that employees work at least 1000 hours per year to qualify for leave. The Act also includes robust anti-retaliation and enforcement provisions to protect employees who request and use their paid leave benefits.

Under UPLAA, employees who take leave will receive a benefit equaling 90% of their wages per week, up to 1.5 times the minimum wage, and then 50% of their wages thereafter, up to a maximum benefit of $1000 per week. Leave requests will not be handled or administered by employers; instead, benefits will be administered and paid through a new D.C. agency, the Office of Paid Family Leave (OPFL), which is housed within the D.C. Department of Employment Services (DOES). Benefits will be funded through a new 0.62 percent payroll tax on private-sector employers, calculated based on gross wages paid to covered employees in each preceding quarter. Employers that provide their own paid leave benefits must still pay into the UPLAA benefit fund, even if their benefits are more generous than what is provided under UPLAA.  

Timeline for UPLAA Implementation – Initial Employer Responsibilities

Since the passage of UPLAA, DOES has established the Office of Paid Family Leave and has issued draft regulations to implement the Act. DOES is currently in the process of finalizing its regulations, staffing OPFL, creating the program’s online portal, and implementing a marketing/outreach strategy for the public. DOES reports that it is on track to begin collecting employer contributions on July 1, 2019 and to begin administering paid leave benefits on July 1, 2020.

Per the draft regulations, all employers will be required to register themselves on an online portal administered by DOES sometime before July 1, 2019. Employers will use the online portal to submit wage reports and to make electronic payments into the paid leave benefit pool on a quarterly basis. Employers will also be required to post and maintain a DOES-provided poster at each worksite describing employees’ paid leave benefits. They will also be required to provide periodic DOES-provided notices to employees informing them of their benefits, including at the time of hire. Finally, employers will be required to maintain payroll records detailing each employee’s pay period dates, wages for each pay period, and dates of employment; these records should be maintained starting April 1, 2019 to support the inaugural July 1, 2019 wage report.

Beyond being aware of these compliance responsibilities, nonprofit employers should begin to plan for the impact that UPLAA will have on their workforce and operations. UPLAA will allow D.C.-based employees to claim up to eight weeks of paid family and medical leave each year, which may exceed what employees currently take under a nonprofit’s existing leave policies. Because leave requests will be administered by the District, employers will have little control over when employees decide to take leave; the Act only requires that employees notify employers as early as possible, and at least 10 days, before taking foreseeable periods of leave, but does not give employers the right to limit or preapprove leave periods. Nonprofits may need to plan for increased scheduling flexibility and work responsibility sharing once employees begin to claim UPLAA benefits in 2020.

Finally, nonprofits with existing paid leave programs should also evaluate those programs in light of UPLAA. Nonprofits should think about their desire to maintain their own family/medical leave programs parallel to, or as a supplement to, UPLAA, and should assess the impact that UPLAA might have on internal leave programs which currently bundle family/sick and vacation leave into a single benefit pool.

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