By July 1, 2019, DC employers are required to start making payments to fund the new Paid Family Leave benefits. DC-based employees will be able to claim benefits starting in July 2020. Before then, there is still much work for the DC Department of Employment Services (DOES) to implement this new benefit. As part of the implementation process, DOES has issued proposed regulations and provided a notice to employers and employees. The proposed regulations provide some of the details missing since the law was passed in December 2016.
Does the Act apply to your organization or company?
The Act applies to all employers that have employees working in DC and are required to pay DC unemployment insurance. This includes non-profit employers and employers with only one employee working in DC.
How will the benefit be funded?
Employers will make quarterly contributions at the rate of 0.62% of payroll for all covered employees starting July 1, 2019 to a newly established Fund. The funds will be paid electronically as a payroll tax collected by DOES, Office of Paid Family Leave (OPFL).
Who can benefit?
Individuals are eligible for benefits if they work in DC more than 50% of their time or if their employment is based in DC. Self-employed individuals may also benefit if they opt to pay into the Fund.
How much is the benefit?
Weekly benefits will be paid based on the individual’s average weekly wages. The benefit will be:
- 90% of wages up to 150% of the DC minimum wage based on a 40-hour work week; and
- 50% of wages above 150% of the DC minimum wage; but
- No more than $1,000 per week for claims before October 1, 2021.
When the first benefits are paid in July 2020, the DC minimum wage is scheduled to be $15.00 per hour. For a claim payable in 2020:
- Employees earning up to $900 per week ($15.00 x 40 hours x 150%) would receive a weekly benefit of up to $810 (90% of $900 = $810).
- Employees earning between $900 and $1,280 per week would receive an additional 50% of wages above $900 per week.
- Employees earning more than $1,280 per week will receive the maximum benefit of $1,000 until the cap is adjusted in 2021.
Intermittent leave will be eligible only in whole day increments and benefits will be prorated.
How long is the benefit period?
- Qualified medical leave: Maximum of 2 workweeks per 52-week period for an individual’s own serious health condition.
- Qualified family leave: Maximum of 6 workweeks per 52-week period to care for a family member with a serious health condition.
- Qualified parental leave: Maximum of 8 workweeks per 52-week period to bond with a newborn or a child who has been placed with the individual for adoption, foster care, or legal guardianship.
- Overall cap: Maximum of 8 workweeks of paid benefits in a 52-week period.
- Elimination period: A 1-week period for which no benefits will be paid. Only 1 week within a 52-week period regardless of the number of qualifying events for the individual.
How will claims be processed?
All claims are expected to be processed through a new “user-friendly, online portal”, unless another format is approved by DOES. Claimants will need to submit proof of their qualifying event, their expected dates of leave, and (for family leave) a description of the care or companionship they will be providing.
Claimants will be responsible for supplying the name, address, telephone number, and email address for their employer. Once an employee files a claim, the employer will be notified within 3 business days and will have 2 business days to respond with any corrections to the employment information.
Within 10 business days, a claimant will be notified of the initial determination decisions on claims and the appeals process. The first claim payment from the Fund to the claimant will be made within 10 business days of the eligibility determination.
What are the notice requirements for employers?
Employers will be required to post and maintain a DOES notice in a conspicuous place at each worksite. Employers will also be required to give paid leave notices to new employees when they are hired, to all employees annually, and to an individual employee when the employer learns of the need for eligible leave. While DOES has provided a public notice regarding paid leave (linked above), it does not explain the leave provisions or available benefits. It is expected that DOES will provide a new notice before July 2020.
How will the Act affect our current leave and disability policies?
Even if your current leave or disability policy is more generous than the Act, affected DC employers are required to participate in the Fund.
The proposed regulations do not include an offset rule for amounts received from employer policies, whether employer-paid or through an insured disability contract. Therefore, employer-paid benefits may need to be adjusted to prevent employees from receiving more than 100% of regular pay. However, most insurance policies avoid that issue through provisions that reduce the insured benefit by amounts received from other sources. Keller will work with clients to update their insured and self-insured paid leave policies so that benefits are coordinated or adjusted accordingly.
Please contact your Keller account team with any questions.