Earlier this year, we discussed the new income tax credit for qualified family leave. This credit applies to employers who satisfy certain criteria and pay employees under qualified plans.
Based upon provisions in the Universal Paid Leave Amendment Act of 2016, the District of Columbia (DC) has mandated that employers make contributions to a fund specifically for employees taking a leave of absence under the Family Medical Leave Act of 1993 (FMLA).
Employers Must Take Action (Quarter Ended June 30, 2019)
Employers will need to:
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Update their Department of Employment Services account
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Notify their employees regarding this benefit at least annually
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Report and contribute to the fund
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Maintain records regarding amounts paid
How Much Are DC Employers Required to Contribute?
Employers with employees located in DC will be required to contribute 0.62% of the gross wages of each of its covered employees to the Universal Paid Leave Implementation Fund by July 1, 2019. This contribution will be for the wages paid in the period April 1 through June 30, 2019.
Employers will make future contributions electronically on a quarterly basis in a similar fashion to the UC30 wage report submitted for unemployment insurance taxes. A good rule of thumb is if you are required to pay unemployment insurance in DC for employees, you are subject to these new provisions.
Which Employers Are Covered?
A covered employer is any business, including nonprofit organizations and household employers, which employs or exercises control over the wages, hours or working conditions of an employee and is required to pay unemployment insurance on behalf of its employee. A covered employer is also a self-employed individual who has opted into the paid-leave program established by the Paid Leave Act. Employers that already provide paid family leave benefits are required to contribute.
Which Employees Are Covered?
Covered employees are employees of a covered employer who spend more than 50% of their time for that employer working in DC. This includes employees whose job functions are based in DC. Covered employees regularly spend their time for their covered employer in DC and not more than 50% of their time for that covered employer in another jurisdiction.
For example, if your employee Sarah has an office in DC, but spends 45% of her working hours at your business’s Baltimore office, she’s a covered employee. If she spends 55% of her working hours in Baltimore, she wouldn’t be covered.
What Are the Employee Benefits?
Beginning July 1, 2020, DC employees will have access to up to eight weeks of parental leave, six weeks of family leave and two weeks of medical leave. The maximum weekly benefit is $1,000. An employee’s right to the DC Paid Family Leave benefits is not diminished by an employer’s paid leave policy.
It is worth noting the differences between FMLA and the Universal Paid Leave Amendment:
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FMLA mandates that an employee’s job is protected if the employee has a leave of absence for parental bonding, to care for an employee’s family member or the employee’s own serious health condition.
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The Universal Paid Leave Amendment Act provides compensation to an employee who takes a leave of absence to perform these functions.
Need Help?
For more information, visit the DC Paid Family Leave website, or contact us online for help or call 800.899.4623.
