D.C. employers have plenty of challenges as they navigate workplace rules that seem to change day by day during the pandemic. Nevertheless, the District of Columbia’s Uniform Paid Leave Act “goes live” on Wednesday, July 1, 2020. While the Act and its corresponding regulations provide a road map to the new Paid Family Leave (PFL) program, there are many unknowns. But one thing is certain—most employment policies do not contemplate PFL.
The D.C. Department of Employment Services (DOES) is responsible for administering the PFL program, thus relieving employers of many responsibilities. While it is good news that employers will not be burdened with approving or administering PFL payments, employers do need to take steps to ensure they comply with D.C.’s PFL regulations. In previous posts, we noted that employers must contribute the required PFL payroll tax and provide employees notice of the PFL program. It is also important for employers to review and revise their employee policies and benefits practices not only comply with the PFL requirements but also do not result in unforeseen costs and administrative hassles.
Employers cannot opt out of D.C.’s Paid Family Leave program.
All D.C. employers (and employers who have employees in D.C.) must participate in the D.C. Paid Family Leave program. Similar to unemployment insurance, this is non-negotiable. All covered employers must contribute the .62% payroll tax for all covered employees.
If an employer pays D.C. unemployment insurance tax for an employee, the default assumption is that the employer must also make contributions to D.C.’s Paid Family Leave program for that employee. This presumption is rebuttable but requires an employer to submit documentation to DOES for each quarter that they are requesting the employee be excepted from PFL coverage.
Notably, DOES takes the position that employees that telecommute for D.C. employers may be covered by PFL if the fact that the work is performed elsewhere is not essential to the performance of the work. It remains to be seen how DOES interprets this going forward, especially with the uptick in remote work during the Covid-19 pandemic.
Employers should review their payroll practices and ensure they are paying into the unemployment insurance program for the jurisdiction relevant to each employee. Employers can then confirm they are compliant with the PFL tax.
For more information, check out these resources issued by DOES.
D.C. Paid Family Leave must be managed in context with all other applicable laws and policies.
The paid family leave program only provides (partial) wage replacement for days an employee did not work due to a qualifying event. It does not “approve” the employee’s absence from work—all it does is provide money. Employees (and employers) must still follow all other relevant laws and policies. Employees (and employers) still must comply with the requirements of FMLA, DC FMLA, DC Sick & Safe Leave, and the employer’s leave policies.
For example, although an employer need not seek medical documentation to “approve” PFL (DOES will do so), the employer might need to do so for purposes of FMLA or the employer’s own policies. Similarly, an employer does not need to track an employee’s use of PFL but may need to do so to comply with FMLA or DCFMLA.
Also, PFL does not “accrue.” D.C. employees are entitled to PFL as long as the employee has “some” reporting of wages from a covered employer (or multiple covered employers) in the reporting period. Therefore, in certain circumstances, a D.C. employee that is newly hired at Company A (a D.C. employer) may be eligible for D.C. PFL based on his previous employment with Company B (also a D.C. employer) but that same employee will not yet qualify for D.C. Sick & Safe Leave or Company A’s employer-provided leave. Similarly, DOES may approve an employee’s PFL benefits but the leave will not be protected by the FMLA or DCFMLA.
Finally, employers should revise their policies to specify that PFL, FMLA, and/or DCFMLA leave run concurrently. If not explicitly stated, employees may be able to “stack” leave, resulting in absences of up to 24 consecutive weeks.
Without updated policies, employees could “double dip” and receive both D.C. Paid Family Leave benefits and employer-provided paid leave.
Employers cannot restrict an employee from applying for and receiving D.C. PFL benefits. Thus, an employee can receive both PFL benefits and any pay for which the employee is eligible under the employer’s paid leave policy. This means that employers that do not update their policies will pay twice—first, they will contribute the .62% payroll tax and also pay for the employee’s paid leave per the employer’s policy.
Employers can (and should) modify their own policies so that their leave benefits “top up” or “wrap around” an employee’s PFL benefits. In addition, employers may require that employees apply for and receive D.C. PFL to qualify for employer-paid leave and/or take employer-provided leave concurrently with their D.C. PFL benefits. Most paid leave policies are not currently written to account for another source of pay during employer-paid leave.
We encourage employers to review their policies to coordinate and integrate them with D.C. PFL Employers should consult with legal counsel and their short-term disability plan administrators to ensure their policies meet the company’s needs and comply with D.C.’s groundbreaking Paid Family Leave program.
We will provide further updates as DOES provides further guidance.