On June 21, 2019, the D.C. Department of Employment Services’ (“DOES”) rules on employer contributions under the Universal Paid Leave Amendment Act (the “Act”) went into effect. DOES began collecting the .62% tax on wages of covered employees from covered employers on July 1. Claimants will be able to begin receiving benefits on July 1, 2020. It is expected that DOES will issue proposed rules on claims administration this year.
Employer Registration. Each covered employer with 5 or more covered employees must register through the DOES online portal, and covered employers with fewer than 5 employees may notify DOES that they do not have computer access and request a paper form. Each employer can use the portal to update its information, submit wage reports, and make payments.
Opt-In for Self-Employed Individuals. A self-employed individual may opt into the program during an open enrollment period: the first 90 days of program commencement in 2019, November and December of 2020 and each year thereafter, or within 60 days of beginning self-employment in the District. To opt in, an individual must provide a business license, occupational license, or other documentation that demonstrates self-employment in the District.
Opt-Out of Self-Employed Individuals. A self-employed individual may only opt out during an open enrollment period, and may request removal from the program in certain circumstances. An individual may opt into the program after opting out in an open enrollment period, but is not eligible for benefits after the first year, and is barred from opting in for 5 years if the individual opts out two more times. If an individual opts in after the first open enrollment period for which the individual was eligible, the individual may not opt out for three years.
Wages. For purposes of the Act, “wages” has the same definition as it does under the District’s unemployment compensation law, except that it also includes self-employment income by an individual who has opted in. In general, “wages” means all remuneration for personal services, including gratuities.
Contributions by Covered Employers to the Universal Paid Leave Implementation Fund. Each covered employer must pay an amount equal to 0.62% of wages of each of its covered employees to the Universal Paid Leave Implementation Fund. Payments are due not later than the last day of the month following the close of each calendar quarter. When a covered employee performs services in employment for 2 or more covered employers during the same period, each covered employer must make contributions on the basis of each covered employer’s payments to the covered employee. Late payments are subject to interest and penalties.
Collection Procedures. Collection procedures for failure to timely report wages or pay owed contributions are similar to those applicable to unemployment insurance contributions. If an employer or and self-employed individual disagrees with DOES’s determination of the failure to file a report or pay contributions, an administrative appeal may be filed within 30 days of receiving notice of the failure to file or pay. One administrative appeal is permitted for each report due or contribution owed.
Online Portal. All DOES communications with covered employers and self-employed individuals must be through the online portal, or another format approved by DOES.
Employer Responsibilities. Each covered employer must maintain a DOES-provided paid leave program notice at each worksite in a conspicuous place. A worksite is a single physical location where business is conducted, or if employees are physical dispersed, the location where covered employees report each day. Each covered employer also must provide the notice to employees within 30 days of hiring, annually, and when the employer receives direct notice from the employee that leave for a qualifying event is needed. An employer may establish compliance with this requirement by sending a digital notice to employees, so long as the employer retains email receipts or signed statements acknowledging delivery.
Recordkeeping. Covered employers must keep records required for the program for at least 3 years and make them available to DOES upon request. Records include:
- Name and Social Security or tax identification number of each covered employee
- Beginning and ending dates of each pay period
- Wages paid each pay period
- Method of payment
- Employee earnings
- Dates wages were paid
- Dates of parental, medical, and family leave taken
- Copies of employee notices of leave furnished to employer
- Copies of all written notices given to employees as required by the program
- Documents describing employee benefits
- Records of disputes between the employer and employee regarding the program.
This material is for informational purposes only and should not be relied on for legal advice. For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999.