The District of Columbia Universal Paid Leave Act of 2016 has been “on the horizon” for D.C.-area businesses for over three years. While the employee-end of the law will not start until 2020 – the requirements for employers start in less than a month.

Starting on July 1, 2019, covered employers will need to begin paying a tax of .62 percent of quarterly gross wages to the District’s Implementation Fund. The tax cannot be deducted from employee wages and therefore must be solely paid by the employer.

The first round of taxes is applicable to all wages paid from April 1 to June 30, 2019. Employers with D.C. employees who opted out of setting aside funds starting in April must be prepared to pay the tax for all three applicable months as of July 1.  A failure to pay may result in an interest penalty of 1.5% that accrues (among other penalties).

All businesses that employ one or more contractor, subcontractor, agent, or employee in D.C. must participate in the Act. Employers’ obligations under the Act also include signage/notice requirements as well as detailed record-keeping (with additional penalties for non-compliance including seizure of accounts). Given the significant penalties for non-compliance (including an employee’s right to sue if an employer fails to offer the leave or discriminates against an employee for using the leave), I recommend consulting with counsel at the outset so that a proactive policy can be implemented.

If you have any questions about this or any other Labor and Employment topics, please contact me at tstringham@offitkurman.com or 703-745-1849

ABOUT THEODORA STRINGHAM

tstringham@offitkurman.com | 703-745-1849

Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

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