DC Council Passes Expansive Family Leave Legislation

After a contentious debate, with both sides sparring over the best way to provide paid leave benefits to employees, the DC Council cast its final decision on the “Universal Paid Leave Act of 2015” in a nail-biting 9-4 vote in December, passing one of the most expansive paid family leave bills in the country. Beginning in 2020, the legislation will give all District employees eight weeks of paid leave for the birth or adoption of a child, six weeks for those taking care of sick family members and two weeks of personal sick leave, at up to 90 percent of their salary (capped at $1000 per week). The program will be administered by a new District-operated insurance agency and will be funded by a 0.62 percent increase to employers via their payroll taxes.

While the business community’s final attempt at the ‘employer mandate’ model emerged earlier this week with the support of Councilmembers Cheh and Evans and Mayor Bowser, the amendment failed to receive enough votes. This alternative would have taken the responsibility of administering and paying for the leave away from the District government and put it in the hands of individual businesses, and would have given businesses with 70 or fewer employees an annual tax credit of $200 per employee for the cost of compliance.

It is unknown whether Mayor Bowser will veto the legislation; however, in a strong statement of opposition against the final vote, Mayor Bowser stated, “Chairman Mendelson and the Council passed a $250 million tax increase to mostly benefit residents of Maryland and Virginia. It is wrong to raise District taxes to fund a costly, new government program that sends 66 percent of the benefits outside of the city, and leaves District families behind. If the Council wants to raise $250 million in new taxes, shouldn’t the focus be on District residents and their needs? Councilwoman Cheh was correct when she described this legislation as ill-considered, a situation we are likely to regret, and not the best way to go. I predict the Council will need to revisit this legislation and address the detrimental impacts on District residents and small businesses. I will not add my name to this legislation.”

So what does this mean for members? It is important to note that the first taxes will not be collected until 2019 as the District will need time to create the agency and collect enough revenue to support the program.