Last week, about 20 CHAMPS members heard from the Office of Universal Paid Family Leave on the process of implementing the paid leave measure. Associate Director Monnikka Madison introduced the office members and gave us an overview of the paid leave legislation. This was one of the first outreach briefings with the business community that the Office of Paid Family Leave has conducted.
As a reminder, that is:
8 weeks of parental leave
6 weeks of leave to care for a sick family member with a serious health condition;
and 2 weeks of paid medical leave for one’s own health condition.
Timing and Employer Requirements
The act is expected to go into effect as planned on July 1. For employers, collection of the .62% payroll tax would begin July 1 2019, and the system is expected to be similar to the Unemployment Insurance system, where an employer registers through the DOES online portal and pays the payroll tax electronically. An assessment of the employers’ quarterly contributions for each of the employees total wages would begin the quarter before – so April 1 through June 30. Employers would file a Paid Family Leave quarterly wage report through the DOES online portal for the previous quarter.
Employers are required to pay the payroll tax on the employees wages, which includes the cash value of non-monetary benefits, such as paid vacation. Employers do not have to include the cost of a dinner provided for the employer for a group of employees that works late on a project, for example, or a parking benefit.
Employers are also required to provide notice to employees about the paid leave benefit in several ways:
- post a notice in the workplace, which will be provided by DOES
- inform employees at the time of the employee’s hiring, annually to all employees, and at the time that the employer is aware that an employee needs paid leave.
Employers are also required to develop, maintain and keep records for at least 3 years on employees, including paystubs, schedules, and communications with employees regarding paid leave. This is important to the employer and the employee should a claim for paid leave be made.
The key question of which employees are eligible for the benefit (and thus must be included in the .62% payroll tax) is any employee working in the District of Columbia more than 50% of their time for that employer in the quarter preceding. This is the case whether an employee is full-time, part-time, or seasonal. The question of defining whether a seasonal employee is eligible came up several times. OPFL staff noted that the question of seasonal employment is more a question for the seasonal employee for whether they are eligible to claim the paid leave benefit and when, rather than a question for the employer. If the seasonal worker is a covered employee (generally, defined as an employee on whom the employer is required to pay Unemployment Insurance) then the employer has to pay the paid leave payroll tax on that person’s wages for the prior quarter.
In terms of part-time employees, an example used was a restaurant server who worked 10 hours a week. Those 10 hours all occurred in the District of Columbia, so the employer must pay payroll tax on the wages paid to that employee those hours for the preceding quarter.
Another example given was a delivery driver. If that driver spends 50% or more of his or her time in a given quarter in the District of Columbia, the employer must pay the paid family leave payroll tax on that employee. If for the next quarter, the drive spends less than 50% of work time in the District, the employer does not pay the paid family leave payroll tax on those hours.
For employers who do not pay the paid leave payroll tax on a quarterly basis, penalties will accrue. The penalty will be 10% of the total contribution amount due, or $100, whichever is higher. And an interest rate of 1.5% per month will be included.
A question was asked about the responsibility of employees to give notice to employers that they are taking paid leave. The law requires that employees give notice as soon as possible, but does not require notice, nor does it establish a penalty if notice is not given. And through discussion at the briefing, it was clear that some situations, like an employee who breaks a leg or has a serious medical issues like a heart attack, will not be able to give much or any advance notice, while leave for giving birth or adoption of a child would generally be able to be requested in advance.
Questions were also asked on how long it takes for DOES to make a determination on whether a employee can receive paid leave (less than 10 days for a determination), and whether there is a waiting period similar to the one week for Unemployment Insurance (there is).
In addition to the Q and A, CHAMPS members submitted questions and contact information to the staff from the Office of Paid Family Leave, in addition to questions previously submitted. We will send responses to the CHAMPS membership when those are returned to us. We have also asked that the Powerpoint presentation that was shown be made available for distribution to CHAMPS members. While some employer questions couldn’t be answered yet, DOES is beginning an outreach process and is determining if some issues surrounding paid leave will need to be address through regulations, and CHAMPS will also keep members posted on that process.