Client Alert
D.C. Starts Collecting Paid Family Leave Taxes

July 18, 2019

By:

As many of you are aware, in 2016 the District of Columbia passed the Universal Paid Leave Act (“Act”), one of the most liberal paid leave laws in the country.  The Act created a paid leave system funded by employers (including non-profits) for those employees employed in the District.  It provides an employee with eight paid weeks of parental leave to bond with a new child, six weeks of paid family leave to care for a family member with a serious health condition, and two weeks of paid medical leave to care for an employee’s serious health condition.  Employees will be eligible for these benefits starting in July 2020.

However, in order to fund this program, D.C. started collecting taxes from D.C. employers on July 1, 2019.  The tax will equate to .62% of all quarterly wages for each employee who is covered under the Act. This cost cannot be deducted from an employee’s pay. 

D.C. employers will be required to submit wage reports (Form UC-30), which cover both employment insurance and paid family leave taxes.  The first report and payment will be due by July 31, 2019 and will include payroll for the second quarter of 2019 (April, May and June). 

In order to ensure you are prepared for this new law we recommend the following:

• (1) If your payroll vendor reports and pays your D.C. unemployment insurance, make sure it also will be paying the D.C. paid leave tax on your behalf.
• (2) The Act requires that all employers post and maintain a paid leave law notice in a conspicuous place at the workplace.  If you have not already posted this notice, we recommend that you do so now.
• (3) Review your non-profit’s leave and disability policies to ensure they are consistent with the Act.  Additionally, if you currently grant employees paid leave benefits, make sure your policy incorporates the D.C. paid leave.  You do not want a situation where an employee is entitled to receive paid leave from the organization and D.C. that exceeds more than 100% of her regular pay. 

If you have any questions regarding the new D.C. Universal Paid Leave Act, please contact Katie Meyer at kmeyer@gkglaw.com.