District of Columbia Council Approves Paid Family Leave

Legal Alert

December 27, 2016

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On December 20, 2016, the District of Columbia Council in a 9-4 vote approved one of the nation’s most generous paid family and medical leave laws. The Universal Paid Leave Amendment Act of 2016 (the “Act”) establishes a paid family and medical leave system for private sector employees within the District of Columbia.

The Act provides for (1) up to eight weeks of paid leave to care for a newly born or adopted child, (2) six weeks of paid leave to care for a sick family member, and (3) up to two weeks of paid leave for a personal illness. To qualify, an individual must be a private sector employee who is employed by a private employer in the District of Columbia. Controversially, this means that residents of other states who work for private employers in the District of Columbia are eligible for paid leave under the Act.

Covered employees will be eligible to receive up to ninety percent of their weekly pay, with a weekly cap of $1,000. Consequently, the Act comes at a great expense to employers. Currently, it is estimated that the Act will cost employers roughly $250 million a year to cover its costs. To fund the increased costs of paid leave, the Act creates a Universal Paid Leave Fund and requires employers to contribute 0.62% of covered employees’ annual salary to the fund. Collection of the 0.62% employer contribution must begin by March 1, 2019, with paid leave under the Act beginning in 2020.

Although District of Columbia Mayor Muriel Bowser has expressed skepticism about the Act, the Council’s 9-4 passage makes it largely immune from a potential veto. However, the Act must go to Congress for approval. Unless Congress intervenes, the Act will soon become law with benefits beginning in 2020.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice. If you have any questions regarding these issues, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.