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Paid family leave moves forward in D.C. D.C. Council edges closer to adopting generous paid family-leave policy
(about 7 hours later)
A proposal in the District to give employees months of paid time off to care for a new baby, a dying parent or to recover from a personal illness passed a key test this week — even as a new threat to the plan emerged. A D.C. proposal to give employees months of paid time off to care for a new baby or ailing relative or to recover from a personal illness passed a key test this week, even as a new threat to the concept emerged.
In a win for advocates, a controversial plan for how to pay for the benefit — taxing employers — won the backing of a fiscally conservative lawmaker who controls whether the measure moves forward. In a win for advocates, a controversial plan to pay for the benefit by taxing employers won the backing of the D.C. Council Chairman Phil Mendelson (D), who has spent much more time over the past two years focused on tax cuts than on increases.
Mayor Muriel E. Bowser (D), however, grew more openly hostile toward the proposal. She told a meeting of city residents that cost estimates for the legislation are “all over the place,” and chided Council Chairman Phil Mendelson (D) for not including her in deciding details of such a major new District policy. Gaveling to order a final hearing on the legislation Thursday evening, Mendelson said that while details remained to be worked out, he has concluded that paid leave would be a transformative benefit to both employees and employers and is worth a slight tax increase.
Mendelson’s announcement of support marked a surprising reversal for the powerful District lawmaker. “This is a question of what can we do to make the District an attractive place to work, which in turns makes the District an attractive place for businesses,” he said in a hearing room where more than 130 witnesses waited to testify.
Mayor Muriel E. Bowser (D), however, has grown more openly hostile toward the proposal. She told a meeting of city residents that cost estimates for the legislation are “all over the place,” and chided Mendelson for not including her in deciding details of such a major new policy.
[D.C.’s paid leave law would be the most generous in the U.S.][D.C.’s paid leave law would be the most generous in the U.S.]
For the past two years, much of the chairman’s energy has gone to holding together a package of tax cuts for city residents and businesses. But in an interview before a final hearing on the leave bill Thursday, Mendelson said he had become convinced that the issue was worth adding on a new cost to businesses in the city, and, in fact, could make jobs in the District more attractive to employees. “It is a worthy enough idea that I think it merits a payroll tax,” Mendelson said of paid leave. Mendelson’s position, which is now in line with a majority of council members, appears increasingly certain to draw the city’s Democratic-controlled legislature into an uncomfortable conflict with Bowser, a moderate Democrat, over an issue that has resonated on the presidential campaign trail.
His position, which is now in line with a majority of council members, appears increasingly certain to draw the city’s Democrat-controlled legislature into an uncomfortable conflict with Bowser, a moderate Democrat — and in a presidential election year in the nation’s capital. While Bowser maintains that the city needs to weigh carefully the costs of such a new benefit to businesses and to city government, both Hillary Clinton and Sen. Bernie Sanders have struck a more populist message on family leave. Both have signaled support for the measure in the District, which would doublethe paid leave benefits in the few states that offer them. Democratic hopefuls Hillary Clinton and Sen. Bernie Sanders both have signaled support for the District’s proposed family-leave proposal, which includes a longer duration of paid leave to bond with a newborn or for care for a relative than in the few other states that have adopted robust policies.
The question that the council wrestled with Thursday night is how much leave the city would be able to guarantee for the amount of payroll tax it is willing to mandate.
“Those who care about this legislation need to focus on costs,” Mendelson said. “Because in the end it will be defined by what benefits can be paid for ... not what benefits we want to offer.”
[Can D.C. really afford paid leave?][Can D.C. really afford paid leave?]
The question that now remains for the council is how much paid leave the city could guarantee for a 1 percent tax on employers in the city. In an interview, the chairman said a 1 percent payroll tax is the maximum he could support. The District’s chief financial officer and independent researchers say a tax of that size likely would not cover the length of leave, rate of pay and universe of eligible employees outlined in the original bill.
In the interview, Mendelson said 1 percent is the maximum he could support. His decision, however, drew only muted praise from advocates because Mendelson said that he believes the length of leave, the number of employees who could claim the benefit and the pay those employees would receive while away from work would likely all have to be smaller than advocates had originally hoped. That legislation says employees may take up to 16 weeks off and be reimbursed for 100 percent of wages up to $1,000 a week, and 50 percent of wages above that amount, to a maximum weekly benefit of $3,000.
Under legislation introduced in the fall, employees in the District would be able to take up to 16 weeks of paid time off for the birth of a child, to care for an ailing relative or for a personal medical issue. Employees could also be reimbursed for 100 percent of their pay, up to $3,000 per week. In New Jersey or California, in contrast, individual paid family-leave programs max out at six weeksand about 60 percent of employees’ salaries.
But the District’s chief financial officer and independent researchers cast doubt on whether a 1 percent tax could cover such expenses, especially if many employees take the full 16 weeks off for personal medical reasons. In a new draft of the leave legislation that Mendelson released this week, he proposed scaling back the duration of employees’ leave to 12 weeks, and reducing the percentage of pay that high-income earners could recoup.
In a new draft of the leave legislation that Mendelson released this week, he proposed scaling back the duration of employees’ leave to 12 weeks, as well as reducing the percentage of pay that high-income earners could recoup. The bill would use a pool of money the city would collect from employers to reimburse workers 90 percent of their wages up to twice the minimum wage, and 50 percent of wages above that, to a maximum of $1,500 per week.
The District program would reimburse minimum-wage workers at 100 percent. Wages up to twice the minimum wage, or up to $46,000 annually, would be reimbursed at 90 percent. Above that, pay would be reimbursed at 50 percent, up to a maximum of $1,500 a week. That would mean that under the city’s escalating minimum wage next year, workers would get 90 percent of their first $920 in weekly wages and 50 percent on the next $1,344. Someone making almost $118,000 a year would max out the benefit, recouping roughly 66 percent of their pay for the duration of their leave.
Under Mendelson’s version, the city would not attempt to have federal employees participate in the system. Advocates had wanted to compel federal employes to participate and pay the 1 percent salary cost themselves. But under Mendelson’s version, the city would not attempt to have federal employees participate. Mendelson said it was unclear how the city would monitor federal employees’ leaves, and it would create two classes of employees.
Advocates had wanted to compel federal employes to participate and to pay the 1 percent salary cost themselves. But Mendelson said it was unclear how the city would monitor federal employees’ leaves, and it would create two classes of employees. Mendelson would also restrict the chronic and mental illnesses that could be used as a rationale for taking leave and to care for others. In addition, employees would have to prove they have a legal relationship — meaning they are married to, the parent of or the guardian of — the person for whom they are caring.
Under his plan, aides said the benefit could be a unique attraction to private-sector jobs in the city, potentially helping the city to further diversify its workforce. Some business leaders at the hearing said they welcomed Mendelson’s efforts to begin to limit benefits but cautioned that more study was needed. “Because the true cost of the program is unknown, so is the true cost to business,” said Kathy Hollinger, president of the Restaurant Association Metropolitan Washington.
Mendelson would also restrict the chronic and mental illnesses that could be used as a rationale for taking leave and to care for others, and employees would have to prove they are taking care of someone with whom they have a legal relationship. Workers who had lost their jobs or missed deaths of loved ones countered that without paid leave, workers would continue to pay the largest, emotional costs.
Critics said that could limit adult workers’ ability to take time off to care for ailing parents and complicate leave for gay and lesbian workers. Authors of the bill pushed to keep the benefit as broad as possible. “My fear is the more we narrow it, the more we will have to come back and fix it,” said Council member David Grosso (I-At large).
Business leaders remain opposed to the payroll tax and say they want to see at least some shared cost of the benefit between employees and employers. They also say the city has yet failed to explain how many critical jobs could be filled on short notice if every employee can potentially take extended family leave at once. Bowser wants a task force led by her office to study the issue, but the council has shown no sign it will allow that.
Bowser this week renewed a call for a task force to study the issue and for her office to be more involved in deciding the policy. It is not clear if the council will wait to do so.
If the plan passes the council, Bowser would be faced with a decision on whether to sign a leave bill with benefits that would run twice as long and reimburse at a higher rate than either New Jersey or California. Family leave programs in those states max out at six weeks of paid leave and at about 60 percent of employees’ salaries.