Money & Business

Associations Offer Alternative to DC Paid-Leave Plan

By / Oct 7, 2016

Citing concerns over funding a paid-leave law through a tax on employers, ASAE and other DC-based associations proposed an employer-mandate alternative for providing the city’s workers with paid family and medical leave.

A coalition of DC associations, including ASAE, on Thursday presented to Mayor Muriel Bowser (D) and the DC Council an alternative to the city’s proposed paid-leave bill that the coalition says will benefit both employers and employees: an employer-mandate model.

Although well intentioned, the paid-leave legislation currently being considered by the council has significant flaws.

The Universal Paid Leave Act of 2016 (Bill 21-214) currently being considered by the DC Council includes a 1 percent tax on employers as the funding mechanism.

“Although well intentioned, the paid-leave legislation currently being considered by the council has significant flaws,” the coalition wrote in a  letter to Bowser and the council [PDF]. The coalition argues that a 1 percent tax on employers will result in slowed growth and prompt employers to move outside of the District. No other paid family and medical leave program in the country is funded this way, the letter notes.

The coalition expressed concern that the council’s bill relies on the DC government to administer leave. In this model, employees would go to the DC government to have leave approved and to secure a portion of their paycheck.

“To attempt to administer the proposed program, the District’s government will have to create a giant, inefficient new bureaucracy, which may or may not prove to have adequate funds to pay out the promised benefits and may or may not be up to the job,” the coalition stated in the letter.

The employer-mandate alternative [PDF] includes full wage replacement for eight weeks for workers who have been employed for at least one year and have worked at least 1,250 hours. Like the council’s plan, the employer mandate would be phased in beginning with large employers. Employers with 50 or more employees would have one year to comply.

Small and medium organizations would have two years to implement the benefit. A shared-risk insurance pool would be created through a private insurance market as an option for small organizations (with fewer than 20 employees) and medium organizations (with between 20-49 employees). The $20 million already allocated by the council would be redirected to subsidize insurance premiums for small and medium organizations.

DC Council Chairman Phil Mendelson (D) has said he plans to move ahead on the Universal Paid Leave Act.

“My commitment is that the council will vote on the package this year,” Mendelson said, according to American University radio station WAMU.

Mary Kate Cunningham

Mary Kate Cunningham is vice president, public policy at ASAE. More »

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