D.C. Enacts Paid Family Leave but Lacks Funding for Implementation

Near the end of last year, the District of Columbia city council approved a measure providing paid family leave benefits for private-sector workers. After making it through a congressional review period, the new law took effect on April 7. 

Under the Universal Paid Leave Amendment Act, employees are entitled to 90 percent of their regular pay while taking covered leave, and the money would come from employer contributions equal to 0.62 percent of employees’ wages. 

According to the fiscal impact statement accompanying the measure, however, there are insufficient funds in the D.C. budget to get the law up and running anytime soon. The district lacks an existing system, such as a temporary disability insurance program, that paid family leave could be grafted onto, which means that a new system must be created and implemented.

Funding for paid family leave isn't exactly a simple issue. Here are examples of four state programs that differ from the D.C. law:

  • California’s paid family leave program provides partial wage replacement for up to six weeks when workers need time off to care for a seriously ill child, spouse, grandparent, grandchild, sibling, parent or domestic partner or to bond with a new child. The program is funded through the temporary disability insurance taxes withheld from employees' wages and paid to the state. Employers can require employees to take up to two weeks of earned but unused vacation leave before receiving paid family leave benefits.
  • New Jersey allows eligible employees to use up to six weeks of family leave insurance benefits within a 12-month period. Benefits also are available up to 42 days in a 12-month period for leave taken on an intermittent basis to care for family members with serious health conditions. Family leave insurance benefits are financed through employee payroll deductions; employers don’t make contributions for these benefits. Employers can require employees to use up to two weeks of paid sick leave, paid vacation leave or other leave at full pay, and the amount of family leave insurance benefits available to workers can be reduced by the amount of such leave taken.
  • Employers in Rhode Island that are covered under the state’s temporary disability insurance provisions must allow employees to receive temporary caregiver insurance benefits when they take leave to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law, grandparent or to bond with a new child. Employees can use up to four weeks of temporary caregiver insurance benefits within a benefit year.
  • Effective Jan. 1, 2018, New York will offer a paid family leave system under which employers will insure their payment of benefits, and employees will fund the insurance with contributions made via payroll deductions. At the outset, the law provides up to eight weeks of paid family leave annually, and the benefit amount will be 50 percent of the employee's or New York's average weekly wage, whichever is lower. The leave and benefit amounts will increase over three years until they top out at 12 weeks and 67 percent in 2021.

The D.C. law goes beyond these states’ programs in providing employees with 90 percent of their regular wages and requiring employers to foot the bill. Under the measure, eligible employees can receive up to two weeks annually for their own serious health condition, up to six weeks for a family member's serious health condition and up to eight weeks for reasons related to the birth of a child or legal placement of a child with them. Across the three categories, employees are limited to a combined total of eight weeks of paid family leave benefits per year. 

The Universal Paid Leave Amendment Act will clearly offer a generous new entitlement for private-sector workers in the District of Columbia, but here’s the big question: When will the district be able to set up the infrastructure needed to launch its paid family leave program?

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