DC Paid Family Leave Tax is Here

As many of you are aware, the District of Columbia began collecting tax from District employers on July 1, 2019 under the District of Columbia’s Paid Family Leave program. This will begin providing paid leave benefits to employees, employed more than 50% of their work time in the District, on July 1, 2020.

The District’s paid family leave provides up to:

• 8 weeks to bond with a new child;
• 6 weeks to care for a family member with a serious health condition, and
• 2 weeks to care for an employee’s own serious health condition.

This post addresses the tax and immediate employer requirements. Qualification for benefits and benefit payments will be discussed in a future blog posting.

Briefly, any business, regardless of size, including labor unions, other nonprofit organizations and multi-employer benefit plans, and performing services in the District, that also pays unemployment taxes for its employees must pay paid family leave taxes. The paid family leave tax is a quarterly paid tax of 0.62% of “covered employee” wages which, like Medicare Tax withholding, is not subject to any limitations.

A “covered employee” is a part-time or full-time employee spending more than 50% of their time providing services to their employer within the District. Thus employers located outside of the District whose employees perform services over 50% or more of the time in the District while working for the particular employer, must pay the tax.

The first collection of paid family leave tax began on July 1^st with contributions based on gross or total wages paid to “covered employees” during the period April 1, 2019-June 30, 2019 and is reported on the Employer Quarterly Contribution & Wage Report, Form UC-30 (DOES) submitted for D.C. unemployment taxes. Note that there are no exemptions for employers providing their own paid leave benefits. Employers were required to post notices (English and Spanish notices attached) of the paid leave benefit in workplaces beginning on July 1^st and payroll records, including social security numbers, pay period dates, wages and dates of employment must be kept for no less than three years. Presumably, your organizations are already maintaining this information required for other payroll purposes.

The Paid Family Leave program is administered by the DC Department of Employment Services through the Office of Paid Family Leave (OPFL). The OPFL website may be reached through the following link:https://dcpaidfamilyleave.dc.gov/. The website provides a variety of information about both the paid family leave tax, including rules, sample notices, remittance instructions, a Toolkit (attached) and webinars. Please, contact Rich Ruvelson at [email protected] by filling out the form below with any questions that you might have.