Advocacy Breakfast Wrap Up: Universal Paid Leave Act
This morning a group of 20 CHAMPS Members sat down with D.C. Councilmember Elissa Silverman to discuss the Universal Paid Leave Act. The legislation, co-authored by Silverman and Councilmember David Grosso was passed by D.C. Council in December 2016. After long voicing “grave concern” for the legislation D.C. Mayor Muriel Bowser allowed the bill to become law without her signature. The bill is currently under congressional review with projected law date of April 7, 2017. Now amid pressure from many in the business community (including the D.C. Chamber of Commerce) some district officials are revisiting the legislation. Silverman broke down the basics for us this morning and drew broad stroke comparisons to the alternative bills now being offerred. Here’s the rundown…
From Councilmember Silverman
- Paid Family Leave is a practice in every industrialized country except the United States. When you have a life changing event such as personal or family illness or welcoming a new child into the home workers are not only given time off, but there is some system in place for compensation during the time away.
- Currently 1 in 7 Americans has Paid Family Leave due to private employer practices or state enacted legislation such as that in California, New Jersey and Rhode Island. Many other states are considering such legislation as well.
- Our conversation this morning is not to debate the merits of Paid Family Leave, but instead to educate about the passed legislation and review the alternatives now being proposed.
- Paid Family Leave has been shown to be a benefit to employers. This benefit has been shown to lead to better worker retention and therefore lowered out of pocket and time cost to rehire and retrain. Paid Family Leave creates a more productive work force.
Universal Paid Leave Act Basics (as enacted)
- Will be a district-run program.
- Employers will pay in 0.62% of employee wages.
- Silverman gave an example of costs to employer. Say you have a $1,000,000 yearly payroll. Your employer tax would be $6200 a year. That’s your total out of pocket. When an employee takes leave they apply/receive for the benefits direct with the district run system.
- Eligible persons include anyone employed in D.C. within past 52 weeks except district and federal government employees. Self employed residents may opt-in.
- Benefits will be 2 weeks personal medical, 6 weeks family, and 8 weeks parental leave.
- Wage replacement will be 90% of average weekly wage up to 150% of minimum wage with $1,000 weekly maximum.
- As stands employer tax would begin July 1, 2019 with first benefits payable July 1, 2020.
- Total district administered cost ~$238M annually
Councilmember Mary Cheh’s Alternative – Paid Leave Compensation Act
- CM Cheh recently introduced an alternative bill with some proponents of the current legislation find is a mechanism to delay creating, funding and implementing UPLA.
- Employer mandate for businesses with 50 or more employees; District-run program for businesses with 5-49 employees; Businesses with under 5 employees are exempt
- The biforcated tax rate would be 0.4% for businesses 5-49 and annual payroll under $3.5M and 0.2% for businesses with 50 or more employees or annual payroll over $3.5M.
- Eligible persons exemptions include DC and federal government employees, self employed residents, employees of businesses with 5 or fewer employees, employees engaged in “casual” employment, and real estate salespersons who are independent contractors.
- Similar Qualifying events, Benefit and Wage Replacement
- Total district administered cost ~$50M annually through 2022 and ~$67M annually afterwards.
CHAMPS will continue to educate and update members on this key legislation and program enactment. Earlier blog posts on this issue can be accessed through the Paid Leave Act tag.