Pursuant to the Universal Paid Leave Amendment Act of 2016 (“Act”), all covered employers will be required to pay into the paid leave fund established by the Act through quarterly payroll taxes. Benefits from the fund will not begin for another year and will be administered by the government, but the taxes will begin to accrue on July 1, 2019.
Covered employers include “any individual, partnership, general contractor, subcontractor, association, corporation, business trust, or any group of persons who directly or indirectly or through an agent or any other person, including through a temporary services or staffing agency or similar entity, employs or exercises control over wages, hours, or working conditions of an employees and is required to pay unemployment insurance on behalf of its employee.” See Public Notice to District of Columbia Employees and Employees for Paid Family Leave (“Notice”). There are no exemptions or thresholds for business size or revenue. This definition will require employers to pay close attention to joint employer scenarios and will necessitate contractual updates for government contractors that place employees on jobs within the District of Columbia.
Covered employees include all employees that spend 50% or more of their time working for a covered employer in the District of Columbia or that are primarily located in the District and spend no more than 50% of their time working outside of the District. For each such covered employee, employers are required to contribute .62% of gross wages on a quarterly basis. The calculation is based on the prior quarter wages – similar to unemployment tax insurance. See Notice.
Employers are required to submit quarterly wage reports on the form provided by the Office of Paid Family Leave (“Office”), post a notice of rights, and maintain records of contributions for three (3) years. The Office will begin administration and distribution of benefits on July 1, 2020, and employers are not required to participate in that process. The contributions are independent of any employer paid or unpaid time off benefits and may not be offset by any provided or accrued leave; however, employers do have the right to determine whether or not sponsored paid benefits run concurrently with an employee’s use of the Office’s paid benefits. As such, employers are well advised to address the program in their leave policies.
If you have any questions on this topic, please contact us.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
MARYLAND | PENNSYLVANIA | VIRGINIA| NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC