On October 6, 2015, the D.C. Council introduced the Universal Paid Leave Act of 2014.  If enacted, the proposed law will allow employees in D.C. to take up to 16 weeks of paid family and medical leave in a 12-month period, and as reported in the The Washington Post, D.C. “would become the most generous place in the country for a worker to take time off after giving birth or to care for a dying parent[.]”   The law would also set up a system, paid into by employers, under which employees would be able to file a claim for paid family and medical leave benefits, similar to the way individuals file claims for unemployment benefits.

Although the proposed Act is not law, yet, and is likely to be resisted by most pro-business groups, given the employee-friendly laws that have recently been enacted in D.C. (e.g., the Protecting Pregnant Workers Fairness Act and the Wage Theft Prevention Act), there is a real possibility that the Act, or some variation of it, will become effective in the next year or so.  In the meantime, the public can attend hearings to express their opposition or support for the proposed law.

The D.C. Chamber of Commerce has already weighed in, as reported in The Washington Post, “saying in a letter to the council that the business community has not been privy to the Department of Labor-funded research used to develop the legislation. The group warned that an entirely employer-funded family-leave program ‘would be unprecedented and make the District of Columbia dangerously uncompetitive.’”  The proposed legislation is ground-breaking and bears watching as it makes its way through the Council. We will keep an eye on developments. In the meantime, here are some Q&A’s to provide some basic information about the law, as proposed.

1. Will The Proposed Act Change Employer Obligations Under the DCFMLA and FMLA?

No.  Paid leave taken under the proposed Act will run concurrently with leave taken under the DCFMLA and FMLA.

2. What Financial Effect Will The Proposed Act Have on Employers?

If the proposed Act becomes law, all companies with at least one “covered employee” will be required to contribute to a Family and Medical Leave Fund established by the D.C. government.  A covered employee is any individual who was employed by a company for some or all of the 52 weeks immediately before a qualifying medical or family leave event and either: (a) spends greater than 50% of work time for the employer in D.C. or (b) works for a company that is a registered business holder in D.C.  This means local, regional, and national employers must figure out which, if any, of their employees would qualify for paid leave benefits.

For each covered employee, the proposed Act will require an employer contribution equal to the contribution rate set by D.C. (based on the individual’s annual salary) multiplied by the wages paid to the covered employee in each calendar quarter.  For example, if an employee earns $50,000 per year, the employer would make a quarterly contribution of $100 (0.8% x 12,500) to the Fund for that employee.  As you can see, employers with a large number of covered employees will be required to make substantial contributions to the Fund.

3. What Should Employers Do Now?

While waiting for this proposed Act to move through D.C. legislative process, employers should take a good look at the D.C. Unemployment Compensation Act and make sure they are complying with the employer contribution and reporting procedures.  The proposed Act will mirror the Unemployment Compensation Act’s procedures, interest, penalties, and remedies.

Employers should also closely examine their existing family and medical leave policies to ensure compliance with the DCFMLA and FMLA.  Finally, consider sharing your view of the law with the D.C. Council.  The more information the Council has from employers, the better chance that the law, if enacted, will not impose unmanageable burdens on D.C employers.