Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street NW Washington, DC tel fax

Transcription

1 Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street NW Washington, DC tel fax Julia E. Judish tel This memorandum provides a brief background on the bill pending before the D.C. Council to establish the Universal Paid Leave Act of 2015, bill no. B (the Bill ) and answers key questions of concern to nonprofit employers. 1. How much paid leave would the Bill provide? Either 16 weeks per 12-month period or 32 weeks per 12-month period. As drafted, the Bill creates ambiguity as to the total amount of paid leave benefits available to eligible employees because it is unclear whether the entitlement the Bill would create of up to 16 weeks of paid family and medical leave benefits per 12-month application period creates separate 16-week entitlements to paid family leave and to paid medical leave as with the D.C. Family and Medical Leave Act ( D.C. FMLA ) or whether the total available paid leave benefits are capped at 16 weeks per 12- month application period, regardless of the reason for which the leave is taken. The paid leave may be taken in a continuous block or may be taken on an intermittent basis, including leave of periods from an hour or more to several weeks. 2. Who would be eligible for the paid leave benefit? The Bill would cover most employed or self-employed individuals who live in the District of Columbia, regardless of work location, and almost all employees who work in D.C., regardless of the location of their residence. D.C. residents who work for the federal government or for an employer outside of D.C. would pay into the universal paid leave Fund individually and would qualify in that manner for universal paid leave under the Bill. The Bill also would create a similar paid leave benefit for employees of the D.C. government. Other than employees of the D.C. government, the following individuals would be eligible for universal paid leave benefits: An individual who works more than 50% of his or her work time within the District; An individual whose employer is a registered business holder in D.C. and who does not spend more than 50% of his or her working time for that employer in a state other than D.C.; 1

2 Any wage-earner who is a resident of D.C. during any calendar week in the year immediately preceding the qualifying event; and A self-employed resident of D.C. who, during any week in the year immediately preceding the qualifying event, earned self-employment income and has not opted out of universal paid leave coverage. The Bill s reach thus extends beyond D.C.-based employers, as it would apply to employers outside the District who have any employees who reside or have resided in D.C. within the prior year. 3. Does the Bill only affect D.C. employers? No. All non-governmental employers in D.C. would be subject to the Bill and required to contribute to the universal paid leave Fund, but the Bill would also create obligations for employers outside of D.C. that employ D.C. residents or individuals who, at any time in the prior 52 weeks, had lived in D.C. and earned wages. Those current and former D.C. residents would have the right to use D.C. s universal paid leave benefits, and even employers with no presence in D.C. would be required to honor that right. The Bill would make it unlawful for any person to interfere with, restrain, or deny the exercise or the attempt to exercise any right provided by the Bill. 4. For what reasons may an individual use universal paid leave under the Bill? Eligible individuals may use the paid leave benefit for their own serious health condition, to care for a family member with a serious health condition, for leave taken for a qualifying exigency of a family member of a service member, or to care for a new child. The Bill would expand the definition of a family member to include a foster child. The Bill would expand the definition of a serious health condition to include pregnancy or a post-partum recovery period that involves inpatient care or continuing treatment or supervision at home by a health care provider or other competent individual. 5. Are small employers exempt from coverage under the Bill? No. Small employers those that employ fewer than 20 employees in the District of Columbia are excluded from coverage under the D.C. FMLA, but the Bill includes no exemption for small employers. Employees could be eligible for universal paid 2

3 leave benefits under the Bill without qualifying for unpaid family or medical leave protection under the D.C. FMLA. 6. Is there a waiting period before employees can take leave under the Bill? No. Title II of the Bill would amend the D.C. FMLA to expand the coverage of that statute s protection to employees who have been employed by the same employer for an unbroken six-month period and have worked for at least 500 hours in the 12 months prior to the request for leave. (Currently, employees must have worked for a covered employer for 12 months and for at least 1,000 hours to be eligible for D.C. FMLA leave.) Because individuals can be eligible for the universal paid leave benefit without D.C. FMLA eligibility, however, this waiting period does not apply to the paid leave benefits established in Title I of the Bill. Under Section 104 of the Bill, benefits would be available to an eligible employee after the first 5 consecutive days in which the individual would otherwise be scheduled to work in the application period. If the individual uses more than five days of family or medical leave benefits during that application period, the individual would retroactively receive benefits for the first five days of absence. In addition, individuals with chronic conditions who take intermittent leave would not be subject to the 5-day qualification period. 7. Can employees or employers opt out of the universal paid leave benefit system? No. The Bill provides that any agreement by an eligible employee to waive his or her universal paid leave rights would be void as against public policy and unenforceable. Only self-employed individuals would be allowed to opt out of the universal paid leave benefit system if the individual elects not to receive coverage either during an annual, 60-day open enrollment period or within 60 days of starting their business. 8. If employees take paid leave that does not qualify for D.C. FMLA protection, do employers have to hold their positions open for them? Yes. Unlike the D.C. FMLA, the Bill does not include a provision requiring reinstatement to the same or an equivalent position upon return from leave. The Bill does, include, however, a very broad prohibition on retaliation for using paid leave benefits that, in practical effect, is comparable to a reinstatement requirement. The Bill s prohibition on transferring or terminating an employee for using the universal paid leave benefit is inflexible. Unlike the Americans with Disabilities Act, the Bill does not include any defense of undue burden if an employer terminates or 3

4 transfers an employee who takes more paid leave than the employer can accommodate or absorb without hiring another employee to perform the absent employee s duties. Unlike the federal FMLA, the Bill does not authorize employers on a temporary basis to transfer employees taking intermittent leave to an alternative position that better accommodates their schedule. Unlike the D.C. FMLA, the Bill does not include any provision that would allow an employer to deny restoration of employment to a key employee on leave if necessary to prevent substantial economic injury to the employer s operations and if the injury is not directly related to the leave that the employee took. Rather, any employment action taken by an employer in response to an employee s use of the paid leave benefit falls within the definition of prohibited retaliation if it is unwanted by the employee. 9. Who would pay for the paid leave benefit? Benefit payments to eligible individuals would be made from a special Family and Medical Leave Fund, to be established by the D.C. government. The Fund would be designed to function in the same manner as unemployment benefits are administered. Covered employers (including employers outside of D.C. who employ covered employees who perform work in D.C.) would be required to pay into the Fund a percentage of the salary of each covered employee, on a sliding scale. At the lower end of the scale, employers would make no contributions for employees earning under $10,000 annually and would have to contribute 0.5% of a covered employee s annual salary for employees earning at least $10,000 but under $20,000 annually. At the higher end of the scale, covered employers would have to contribute 0.8% of the annual salary of covered employees earning at least $50,000 but under $150,000, and would have to contribute 1% of the annual salary of each covered employee earning $150,000 or more. The Bill calls for mandatory contributions by individuals who reside in D.C. but earn wages from a non-covered employer (e.g., the federal government or an employer outside the District that is not registered to do business in D.C.), with the same sliding scale contribution rate applicable to covered employers. Self-employed D.C. residents would also make these contributions unless they opt out of coverage. Under the current Bill language, therefore, a D.C. resident working for a non-covered employer (a Virginia association, for example) would be required to pay into the Fund. 10. How much is the paid leave benefit? The paid leave benefits under the Bill would match 100% of the employee s average weekly wages, up to a cap of $1,000 per week. If the employee earns more than $1,000 per week, the employee would receive $1,000 per week plus 50% of the 4

5 employee s average weekly wages in excess of $1,000, up to a maximum weekly benefit of $3, What penalties and potential liability would apply to violators? Under Section 102 of the Bill, covered employers that violate the requirement to give their covered employees a notice of the universal paid leave rights at hiring and annually thereafter and when the employer is aware of the employee s need for leave would be assessed a civil penalty of $100 for each covered employee to whom the notice was not given. In addition, a covered employer that fails to post in a conspicuous place the notice of rights in English and in all languages in which the Mayor makes the notice available would be assessed a civil penalty of $100 for each day that the employer fails to post the notice of rights. Under Section 113 of the Bill, a covered employee who successfully files an administrative complaint against a covered employer for any violation of the universal paid leave law would be entitled to an order requiring the employer to pay damages of: Any wages, salary, compensation, or benefits denied or lost to the employee as a result of the violation, plus interest; and the greater of: o Liquidated damages equal to the lost compensation, OR o Consequential damages (i.e., damages the employee can show he or she actually suffered) of up to three (3) times the lost compensation, plus any medical expenses not covered by the employee s health insurance. The Bill also provides for the prevailing party to recover reasonable attorney s fees and costs. An employer who can establish that the violation occurred in good faith and based on a reasonable belief that the employer s act or omission was lawful would be able to apply for a reduction in damages. The Bill would both create an administrative procedure for employees to file complaints and would allow any eligible individual to file a civil lawsuit for violations of the Bill in any court of competent jurisdiction. 12. What is the likely impact of the Bill, if enacted? According to Councilmember Grosso, one of the Bills sponsors, nationally only 13% of workers take family medical leave annually. See 5

6 Based on that statistic, D.C. employers are likely to see more than 13% of employees use the universal paid leave benefit, if the Bill becomes law. Many employees who are eligible for unpaid leave benefits do not use their leave entitlements because they cannot afford to take unpaid time off from work. Indeed, this dynamic is part of the rationale for the Bill. With the availability of paid leave, the number of employees who exercise their right to take family leave under the D.C. FMLA is likely to increase. The percentage of employees taking family or medical leave in D.C. is also likely to increase because the Bill expands the number of employees eligible for family and medical leave. Moreover, because paid family and medical leave is not mandated in most jurisdictions in the U.S., D.C.-based employers may find that even more of their employees take advantage of the universal paid leave benefit than anticipated. For example, if an ailing parent needing care has three adult children, one in D.C., one in Maryland, and one in Virginia, the D.C.-based sibling would be the natural first choice to take leave due to the job protection and income replacement available under the Bill. Thus, if the Bill is enacted, D.C. employers are likely to experience disproportionate requests for employee leave, far more so than if universal paid leave were available nationwide. 13. Will the Bill become law? If so, when? If passed by the D.C. Council, the Bill would first have to go through a 30-day Congressional review period before taking effect. During the Congressional review period, Congress would have the opportunity to enact into law a joint resolution disapproving the D.C. legislation. If Congress takes no action (as happens with the vast majority of bills passed by the D.C. Council), the Bill would become law as of its designated effective date. Even if a joint resolution disapproving the legislation passes Congress, however, President Obama would need to approve the joint resolution with the 30-day period to block the D.C. legislation from becoming law. Otherwise, upon the expiration of the 30-day Congressional review period without a joint resolution disapproving the D.C. legislation that is approved by the President, the legislation would become law. Congress cannot modify the Bill; its only option is to disapprove the Bill in its entirety or to take no action and allow it to become law. President Obama has spoken in support of enacting national paid family and medical leave entitlements and recently issued an executive order requiring government contractors to provide paid sick leave to their employees. Moreover, the Bill itself in part springs from the support of the Obama Administration. In 2014, D.C. received a $96,000 grant from the U.S. Department of Labor to study options for expanding paid leave. According to Councilmember Silverman, one of the Bill s sponsors, the Bill 6

7 was developed based on some of the research done for that study. Accordingly, it seems unlikely that President Obama would block this major new initiative. D.C. employers with concerns about any provisions of the Bill would be prudent to seek changes to the language of the Bill before it is passed by the D.C. Council. 14. How can I learn more about the Bill? A copy of the bill is viewable here: Paid-Leave-Actor-of-2015-as-Introduced. The progress of the Bill through the D.C. Council can be tracked on the D.C. Council website, at 7