In a nail-biter of a contest, one of the most expansive paid family leave bills in country passed in Washington, D.C., today. The new legislation gives eight weeks of paid leave to new parents, and six weeks for those taking care of sick family members, at up to 90 percent of their normal pay (capped at $1000 per week). The program, which advocates have been pushing for nearly two years, will be administered by a social insurance program controlled by the city and funded by a 0.62 percent increase to employer payroll taxes. A last minute threat to the bill emerged earlier this week in the form of an amendment that would have taken the responsibility of administering and paying for the leave away from the city and put it in the hands of individual businesses. In a heated battle, council members voted against this amendment.
The D.C. bill is especially generous in terms of who has access to leave, how much time they can take, and how much money they will receive during that time. In California, where employees are guaranteed up to only 55 percent of their wages, some working class parents can’t afford to take advantage of the program. However, the D.C. bill does fall short of other plans in terms of personal medical leave. lt only offers two weeks of paid leave for personal injuries or illnesses—less than other city and state programs—which advocates say was an attempt to keep costs down.
“It is the most expensive type of leave because it is the one people need most,” Rebecca Ennen, deputy director for development and communication at Jews United for Justice and media coordinator for the DC Paid Family Leave coalition, said over the phone. “Two-thirds of leaves are personal medical leaves. Every story that gets published about these issues is accompanied by a picture of a baby, but really they are most being used by sick people—those who have to go get chemo at lunch.”
According to Ennen, even though the employer mandate version contained the same terms as the social insurance program she and others supported, it would have been less likely to deliver them. While large businesses would have little problem handling paid leave, small business would have struggled to fund the new requirements on their own. With the employer mandate, business with 70 or fewer workers would have been eligible for a $200-per-employee annual tax credit to help ease the cost of providing leave. But for a small business with, for example, a dozen employees, that would have brought them only $2400 year in extra deductions—hardly enough to cover a single eight-week leave.
Other concerns of Ennen’s about the employer mandate included the ways in which it would have made enforcing the program more difficult. For one, the amendment didn’t include any provisions for making sure businesses are following the rules, nor did it clarify what to do if they didn’t. Also, she was concerned that leaving it up to individual businesses would have given them an incentive to discriminate against women of childbearing age when hiring. Lastly, with the employee mandate, self-employed and contract employees would not have been eligible for paid leave, whereas with the social insurance system they are.
Critiques of the social insurance program said that it would be too expensive, and that most businesses prefer to handle leave on their own. Defenders claimed that it will pay for itself within a few years time. As for its potential effects on employers themselves, a study on the long-term effects of social insurance-funded paid leave program in California found that most businesses believe that they were either unaffected by the program or benefitted from it.
Ultimately, while Ennen is glad that the employer mandate amendment didn’t pass, she said she sees the fact that they convinced everyone that paid leave is necessary was a victory in and of itself.
“It’s pretty amazing that we got to the point where they just said, okay, we’ll just pay it ourselves,” Ennen said.
The current plan is for the social insurance fund to start collecting taxes in 2019 and paying benefits in 2020, a timeline that Ennen finds overly cautious. “I think it may happen faster.”