The District of Columbia is introducing a new system of employee leave benefits: employers should prepare their payroll departments now.

In 2017, the District of Columbia passed the Universal Paid Leave Amendment Act of 2016 (Bill 21-415), which introduced an expansive new Paid Family Leave benefit for employees. The new benefit is considered the most generous in the country: in addition to paid family leave, it also includes provisions for medical leave and parental leave. The intention behind the Act is to enhance job security across the DC workforce, and ensure employees don’t have to choose between their family and their employment.

The District of Columbia Office of Paid Family Leave (OPFL) recently took steps to clarify the introduction of the Paid Family Leave benefit, launching a website which includes a range of useful resources and information for both employers and employees. Funded exclusively by employer contributions, tax collection for Paid Family Leave will begin on 1 July 2019: as an employer, if you’re unfamiliar with the way the benefit will be implemented, now is the time to learn more.

What is Paid Family Leave?

Paid Family Leave will be granted for up to 6 weeks to employees who are caring for a family member with a serious health condition, for up to 2 weeks for employees caring for their own health condition, or up to 8 weeks to allow employees to bond with a newborn child. To be eligible for Paid Family Leave, employees must:

  • Work in DC for more than 50% of their work time.
  • Be employed when they apply for the benefit.
  • Opt-in to Paid Family Leave if they are a self-employed worker.
  • Meet the specifications for temporary or seasonal work.

Employees can work out how much they will receive from their Paid Family Leave benefit using the Weekly Benefit Calculator hosted on the OPFL website.

How will Paid Family Leave be introduced?

The Paid Family Leave benefit effectively came into legal effect on 1 April 2019 when employers were required to begin recording their employees’ wages. Going forward, the implementation schedule is as follows:

  • 1 July 2019: The OPFL will begin collecting Paid Family Leave taxes from employers, who must also submit their wage reports.
  • 1 July 2020: DC workers will become eligible for Paid Family Leave and the OPFL will begin to administer benefits. 

How is Paid Family Leave funded?

The Paid Family Leave benefit will be funded by employers, via payroll, at a rate of 0.62% of employees’ wages. All private businesses that operate within the District of Columbia, and that pay unemployment insurance taxes for their employees, must contribute to the Paid Family Leave fund.

Employers will be required to submit quarterly wage reports in the same way that they currently report their unemployment insurance taxes. Those reports can be submitted via the Department of Employment Services (DOES) online portal which will become accessible before the new payroll tax is introduced.

What should employers do now?

Employers in DC should obviously act quickly to alert their payroll departments to the details of Paid Family Leave, and its implementation schedule, in order to be in compliance by 1 July 2019. Records of workers wages and other related leave documentation must be maintained and employees should also review their internal family leave policies to make sure they work within the parameters of the new regulations.

Importantly, employers must inform their employees about the introduction of Paid Family Leave. This can be done by posting a written notice in a spot accessible to everyone in the business, sharing information about the benefit when hiring new employees, posting an annual update, and reminding employees of their options whenever Paid Family Leave is needed.

Learn more about tax and social security benefits in the United States by exploring activpayroll’s US Global Insight Guide.

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