CHAMPS testimony to PFL Roundtable, July 11, 2019
Written Statement of Julie Aaronson, Executive Director of CHAMPS,
the Capitol Hill Association of Merchants and Professionals
July 11, 2019 Public Oversight Roundtable on the Implementation of Law 21-264,
The Universal Paid Leave Amendment Act
DC Council Committee on Labor & Workforce Development
I am submitting a written statement on behalf of CHAMPS, the Capitol Hill Association of Merchants and Professionals. Known as the Capitol Hill Chamber of Commerce, we represent more than 130 retail, entrepreneur, non-profit, restaurant, and professional service businesses on Capitol Hill.
Our membership has tracked the legislation and implementation of DC’s paid family leave law closely. We appreciate the Office of Paid Family Leave (OPFL) meeting with our members in May 2018 to provide an overview of the legislation and outline the steps the office is taking toward implementation. The office provided written responses to our questions and answered subsequent questions that we have raised, but as the July 1, 2019 implementation date approached, several other concerns came to the forefront. Those concerns center on a lack of confidence in OPFL’s communication to the business community.
First, as noted in our letter to DOES OPFL on April 26, 2019, payroll providers and third-party administrators (TPAs) did not have full information on implementation of the Paid Family Leave legislation on April 1st. This resulted in payroll providers being unable to collect PFL on a per-paycheck basis during the initial collection quarter, the same way unemployment insurance is collected and then submitted on behalf of business clients on a quarterly basis. Partway through the quarter TPAs notified clients that collection would occur in one or two withdrawals in late May or June, for payment between July 1 and July 31. At best, the truncated collection period is an inconvenience for small businesses; at worst it creates a cashflow issue for salary-heavy businesses for which July may be one of their slowest months. Why was the online portal system not ready by April 1 so payroll providers could collect the PFL just like unemployment insurance? Or, why did OPFL not communicate to employers that use payroll providers or TPAs that the system would not work the same way as unemployment insurance for the first quarter? CHAMPS asked as early as our May 2018 listening session whether TPAs would be fully engaged on the implementation. We were told that TPAs would be fully engaged in a timely manner.
Second, OPFL sent an email notice to employers on July 1 that PFL payments would be due by July 31, and asked businesses to review an attachment. However, for CHAMPS and several CHAMPS members, no attachment was included. That attachment likely explained the 0.62 percent tax on salary that businesses are liable for. This information would have been a more helpful reminder for businesses on or before April 1, 2019, the first quarter for which taxes were being collected. We understand the tax payment is for the quarter of salary preceding, but a formal communication to the business community from OPFL of the tax rate in advance of the collection period would have been useful.
This rollout left businesses in the dark on fundamental questions about how the initial quarter payments would be collected and paid by TPAs. Businesses understood that PFL would be collected “just like UI,” and the result for this quarter was different. It plays into the narrative that OPFL and DOES are not considering the impact of implemented policies on the business community. It also does not give the business community confidence about the rollout of the benefits portion of PFL.
CHAMPS members have also recently asked questions regarding the specifics of the online payment portal. Specifically, if a business has a PFL credit (overpayment), is there a function to display that refund to the business and then refund it? That scenario was not one that was provided for during the testing when CHAMPS members tested the portal. Some CHAMPS members have struggled to get refunds back for UI overpayments, so making sure this mechanism is planned for and working is important.
As OPFL moves toward the benefits implementation and rollout, CHAMPS wants to reiterate a benefit question we have asked in the past, follow up on other benefit questions, and ask several new questions:
- CHAMPS members at our May 2018 meeting asked whether a “covered employee” needed to meet a certain FTE to gain benefit. The response noted that “The District is in the process of developing further guidance on potential eligibility requirements for the length of time in covered employment.” Has that further guidance been developed on potential eligibility requirements for length of time in covered employment? Please consider minimizing what further action is needed on the part of the employer to track employee time for covered employment.
- CHAMPS members at the May 2018 meeting asked if there is a 1 week waiting period for filing, which would be the same as unemployment insurance. Is there a 1 week waiting period before the benefits begin? Is the benefit retroactive to the date of the injury?
- This question is related to the previous question and focuses on the mechanics of implementing the PFL benefit and how the employee is paid during the up to 10 days in which DOES makes the determination. Will employers need to pay the employee and then be reimbursed if PFL kicks in? If the employee needs to take emergency leave, will the employee take sick leave or PTO until the PFL benefit kicks in? This will be tough as employers and TPAs are not set up to reimburse PTO or sick leave. Also, the reality is that the determination period will likely fall at some point during which an employer will need to record and submit an employee’s hours for payroll. Clarity on this question is needed for both employees and employers.
As we move forward, CHAMPS would like to recommend and work with OPFL on the types of information that would be helpful for businesses well in advance of the benefits implementation. Some of those items include:
- One-page plain language descriptions of the PFL benefit that employers can include in employee handbooks;
- Model language that can be used in employee handbooks and in onboarding information that helps employers accurately fulfill the requirement to inform their employees about their PFL rights;
- Plain language examples of situations that are qualified uses of paid family leave to provide clarity to both employers and employees;
- A list of employer responsibilities and a list of employee responsibilities to clarify the actions of each party before and when an employee seeks to use PFL;
- And plain language explanations of how PFL intersects with Safe and Sick Leave and the Family Medical Leave Act.
Thank you for your consideration of our concerns and additional questions. We look forward to continued engagement with OPFL as implementation of this legislation moves forward.
CHAMPS, Capitol Hill Association of Merchants and Professionals