Due to a surplus in the Universal Paid Leave Fund (the “Fund”), D.C. employees who are covered by the District’s Paid Family Leave (PFL”) program will soon be eligible for the maximum amount of paid family leave benefits permitted under the law.
As discussed in our previous Insight, starting in 2022, under the Universal Paid Leave Emergency Amendment Act of 2021 (“PLEAA”), the District’s Chief Financial Officer (“CFO”) may modify the maximum duration of leave available under the PFL program annually depending upon the projected balance of the Universal Paid Leave Fund. On March 1, 2022, the Acting CFO certified that the Fund has enough money to increase the potential maximum duration of qualifying paid leave available to D.C. employees as follows:
- Up to 2 weeks for prenatal leave (as before);
- Up to 12 weeks for medical leave (increased from 6 weeks);
- Up to 12 weeks for parental leave (increased from 8 weeks);
- Up to 12 weeks for family leave (increased from 6 weeks).
The PLEAA provides that once leave benefits are expanded to the maximum durations allowed, the CFO may also lower the employer contribution payroll tax rate so that employers do not overpay into the Fund. Given the Fund’s surplus, which currently stands at over $400 million, the Acting CFO certified reducing the current payroll tax rate from 0.62% to 0.26%, which is expected to save employers approximately $200 million over the next year.
The increase in paid leave benefits is currently scheduled to take effect on July 1, 2022; however, Mayor Muriel Bowser’s recently published 2023 budget proposal would delay implementation of the expansion of paid leave benefits (but not the reduction to the payroll tax rate) until October 1, 2022. The Council has yet to vote on the mayor’s 2023 budget proposal. We will continue to monitor the budget process and report further if the expansion of paid leave benefits will be delayed until October 1, 2022.
- Member of the Firm