On August 9, 2019, the D.C. Office of Employment Services (DOES) took another step toward full implementation of D.C.’s Universal Paid Leave Amendment Act of 2016 (UPLA) by issuing proposed benefits regulations. In a recent post, we discussed generally the paid leave benefits eligible employees can receive from DOES under UPLA starting July 1, 2020 for new child bonding (8 weeks), to care for a family member with a serious health condition (6 weeks), or for the employee’s own serious health condition (2 weeks), up to a maximum of 8 weeks per year, and we explained the employer payroll tax collection process currently underway to fund the new program. The proposed benefits regulations address a number of benefits administration issues, including how employees will file claims for benefits, how employers will be notified of claims, how DOES will calculate benefits amounts, and the process for appealing claims denials.
In this post, we focus on one topic of particular interest to employers: what the proposed benefits regulations say about the interaction between UPLA benefits and employers’ own paid leave policies when they overlap. The proposed regulations make clear that employers are free to amend their own leave policies to account for UPLA benefits. However, the devil is in the details, and tricky coordination issues are left unresolved by the proposed rules.
Here are the key takeaways:
Employer leave policies do not impact the amount of UPLA benefits. DOES will not consider the availability of employer-provided paid leave benefits when calculating benefits available under UPLA. This leaves open the possibility that employees will be entitled to paid leave benefits from both the employer and DOES for the same time period. The DOES benefit will be calculated based on a formula that considers the employee’s average weekly wages from 4 of the last 5 quarters preceding the leave (the quarter with the lowest total earnings is excluded). The benefit amount will be a percentage of the employee’s average weekly wages, up to 90% for lower earning employees and a lower percentage for higher earning employees. For 2020, the DOES benefit may not exceed $1,000 a week.
Employers are permitted to coordinate their paid leave benefits with UPLA benefits, but the regulations provide no guidance on how to coordinate. The proposed regulations allow employers to coordinate their own paid leave benefits with UPLA benefits and state that employers may amend their existing or future policies at any time as they see fit. However, the proposed rules provide no guidance on how coordination is to be achieved. Coordination is generally understood to include rules to avoid duplication of benefits, including rules to avoid more than full pay (or some other level of intended pay) in a given week through means such as offsets, deductions, or sequencing.
Some of the proposed regulations will facilitate coordination of benefits. Except in emergencies, the proposed regulations require the employee to notify the employer in advance, in writing, of the need to use UPLA paid leave benefits, the type of leave benefits being requested, and their anticipated duration. DOES will notify the employer within 3 business days that a claim has been filed (and will request information from the employer). DOES is also required to inform the employer when a claim is approved, the start date, expected end date, whether the leave benefits will be continuous or intermittent, and if intermittent, the scheduled dates. DOES will not disclose to employers the amount of UPLA benefits the employee is receiving, but employers are permitted to require employees to disclose the amount as a condition of receiving employer paid leave benefits.
Some of the proposed rules may create practical difficulties for smooth coordination. DOES benefits may not begin for some time after a qualifying event, whereas employer paid leave might start sooner. Delays in DOES benefits will occur because, under the proposed regulations, employees may not submit UPLA claims until after the qualifying leave event, even when the need for leave is foreseeable, and DOES will not award benefits for leave taken before a claim is filed (except in exigent circumstances such as physical or mental incapacity). (Note that there is also a 7 day waiting period after the qualifying event during which no UPLA benefits apply). In addition, it will take DOES time to process claims. The proposed regulations state that initial claim determinations will be made within 10 business days, although this time period will be extended if additional information is needed to make the determination, and benefits payments will not begin until 10 business days after a claim is approved. Furthermore, if DOES denies a claim and the employee succeeds in getting the denial reversed on appeal, the employee may receive a DOES award after employer leave benefits have already been provided.
Employer policies may not interfere with employees’ UPLA rights. In coordinating employer and UPLA benefits, employers should bear in mind that the UPLA prohibits interference with an employee’s exercise or attempted exercise of rights to benefits provided in the Act.
The proposed benefits regulations are open for comments until September 9, 2019. It is possible that the final regulations will address coordination further. DOES is also continuing to offer paid leave webinars, during which additional guidance may be provided. See the Office of Paid Family Leave website for further details. Employers should begin reviewing their leave policies to determine whether to make revisions before UPLA benefits become available on July 1, 2020.