Agency Update: Effective April 1, 2019, all employers performing services in Washington DC are required to make contributions to the DC Paid Family Leave (PFL). The date of April 1, 2019 was recently made public by the agency. This includes, self-employed individuals who have opted into the paid family leave program, household employers that pay DC SUI, and non-profit organizations.
Key Dates:
- April 1, 2019 – Effective Date – Employers begin recording worker wages
- July 1, 2019 – Employers file wage reports & Q2 PFL Tax Collection begins
- July 31, 2019 – Q2 PFL Tax Deadline
DC Paid Family Leave is an employer tax and employee checks will not be impacted. All employers are required to contribute to DC PFL even if they already offer a PFL plan.
Please click here for more information. To view agency paid family leave notice to employers please click here.
Effective July 1, 2019, all private employers within the District of Columbia are required to make contributions for paid family leave. The Department of Employment Services has released multiple documents on their website for review. Below are details pertaining to this law along with a link to the department’s website.
Effective July 12, 2022, the reduction of short-term disability benefits based on actual or estimated paid leave benefits under DC's Universal Paid Leave Law is prohibited, regardless of the jurisdiction the policy was issued or written.
Covered Employers
Any employer performing services in the District of Columbia, that also pays unemployment insurance taxes for its employees, will be required to pay paid family leave taxes. This also includes non-profit organizations and household employers that pay unemployment insurance tax, as well as self-employed individuals who have opted into the paid family leave program.
Covered Employees
A covered employee is any worker of a covered employer who spends more than 50% of his or her work time for that employer working in the District of Columbia; or whose employment for the covered employer is based in the District and who regularly spends a substantial amount of his or her work time for that covered employer in the District and not more than 50% of his or her work time for that covered employer in another jurisdiction.
Approved Uses & Payment
“Qualifying parental leave event” means events, including bonding, associated with:
- The birth of an eligible individual’s child;
- The placement of a child with an eligible individual for adoption or foster care; or
- The placement of a child with an eligible individual for whom the eligible individual legally assumes and discharges parental responsibility.
“Qualifying family leave event” means the diagnosis or occurrence of a serious health condition of a family member of an eligible individual.
“Qualifying medical leave event” means the diagnosis or occurrence of an eligible individual’s own serious health condition.
Following the occurrence of a qualifying parental leave event, an eligible employee has up to 52 weeks to file a claim for paid leave benefits. Following the occurrence of a qualifying family or medical leave event, an eligible employee has up to 90 days to file a claim for paid leave benefit.
Contribution Rate
The Department of Employment Services, will administer the paid family program. Paid family leave benefits are funded by a quarterly employer payroll tax of 0.62% of their covered employees’ total wages. These quarterly contributions are based on the immediate past quarter of wages paid, in a similar fashion to unemployment insurance tax.
Contributions to the paid family leave program are based on gross or total wages paid to covered employees.
Paid-leave benefits are calculated based on an eligible individual’s average weekly wage; the total wages in covered employment earned during the highest 4 out of 5 quarters (the base period) immediately preceding a qualifying event, divided by 52.
Reporting Requirements
Employers are required to submit quarterly wage reports in a similar fashion to the UC30 wage report that is submitted for unemployment insurance taxes. There will be a separate wage report form for paid family leave that will be provided by the Office of Paid Family Leave.
Employee Notification
Following the receipt of a claim for paid leave benefits, the Office of Paid Family Leave will issue a determination to the applicant within 10 business days. Also, if an individual is determined to be eligible to receive paid leave benefits, the first payment will be received within 10 business days of the determination of eligibility.
Record Keeping Requirements
Employers are required to keep payroll records for a period of not less than 3 years. These payroll records must include the following information: Name and social security number (or individual taxpayer identification number), pay period dates, wages for each pay period, and dates of employment.
Next Steps
We are closely monitoring this law and will provide updates as they come. Please stay tuned for system information as the effective date nears.
For more information, click here.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.
