What Employers Should Know About DC’s Universal Paid Leave Act

In December of 2016, the D.C. Council voted in the majority to pass the Universal Paid Leave Act. The Act provides for three types of paid leave: eight weeks of paid parental leave, six weeks of paid family leave, and two weeks of paid personal medical leave.

However, the bill still faces obstacles before passing and turning into law. Below, we’ll outline the highlights you’ll want to know about it as an employer in the D.C. metro area.

Who Qualifies?

The bill defines a “covered employee” as someone who spends “more than 50% of his or her work time working in D.C. for a covered employer.” The bill also includes details on how many weeks an employee will have had to work for a covered employer to be eligible for the paid leave periods.

Which Businesses Will This Affect?

Under the Act, a “covered employer” includes any group of people who — directly, indirectly, or through an agent — employs or exercises control over the wages, hours, or working conditions of an employee and must pay unemployment insurance for DC employees. That includes such entities as:

• Individuals

• Partnerships

• General contractors

• Subcontractors

• Associations

• Corporations

• Business trust

A covered employee also includes a self-employed individual who has opted into the paid leave program.

Which Businesses Are Exempted?

This Act is intended for private sector employers in D.C., and will not be applicable to federal employers.

What Does the Act Cover?

The Act would require covered employers to offer the following paid leave options:

Eight Weeks of Parental Leave

This covers parental leave pay for more than just biological children or parents. Eligible individuals may take up to eight weeks of leave for:

• The birth of a child

• The placement of a child for adoption or foster care

• The placement of a child where the eligible individual legally assumes and discharges parental responsibility 

Six Weeks of Family Leave

Eligible individuals would be able to take this paid leave to provide care or companionship to a family member who has a serious health condition (or has been diagnosed with one). The bill defines a “family member” as the below:

• Children: A biological, adopted, or foster son or daughter; a stepson or stepdaughter; a legal ward; a son or daughter of a domestic partner; or a person to whom an eligible individual stands in as parents.

• Parents: A biological, foster, or adoptive parent; a parent-in-law; a stepparent; a legal guardian; or another person who stood in as a parent to an eligible individual when the eligible individual was a child.

• Spouses: A person to whom an eligible individual is related by domestic partnership or marriage.

• A grandparent of an eligible individual

• A sibling of an eligible individual 

Two Weeks of Personal Medical Leave

Eligible individuals would also be able to receive paid medical leave for a qualifying medical leave event. What counts as a qualifying event? According to the bill, that’s “the diagnosis or occurrence of a serious health condition of an eligible individual.”

When Does It Go Into Effect?

Although the D.C. Council passed the bill 9-4 in December 2016, it still may not go into law. The mayor has the ability to veto it. If the council’s margin overrides the veto, it will then be sent to Congress for approval before it can become law. (We’ll be sure to update you here, on the Justblog, if the bill is passed into law.)

Starting in 2020, the Act would pay 90% of an employee’s first $900 in weekly wages and 50% of any weekly wages above $900. The Act would pay a maximum benefit of $1,000 per week.

How Is It Funded?

The paid leave would be funded by anew 0.62% payroll tax on D.C. employers. That has some small businesses worried about the cost burden on them. Additionally, the D.C. mayor has said that this could be an undue burden on D.C. employers, as many of their employees live in neighboring states.

How Can Justworks Help?

We’ll keep tabs on this bill as it progresses and give you updates on this blog and in our newsletter. Eligible Justworks members who are based in D.C. can also seek help from the Justworks Customer Success team at [email protected] when it comes to administering payroll taxes, which will be affected should the bill pass.

This information has been prepared for informational purposes only and is not legal or tax advice. Before making any decision or taking any action, you should consult with an attorney regarding compliance with all applicable laws.