The District of Columbia Department of Employment Services, Office of Paid Family Leave (PFL) issued program updates, including proposed regulations to govern paid family leave benefits and guidance on issues arising during the initial quarter that employers were required to begin paying and reporting employer assessments.

The proposed paid family leave benefit regulations are available here. Interested parties may submit written comments by September 9, 2019 by email to DOES.OPFL@dc.gov or by mail to Department of Employment Services, Office of Paid Family Leave, 4058 Minnesota Avenue NE, Washington, DC 20019.

Following are answers to the questions frequently received during the initial quarter:

Question 1: Can my business make a combined payment for taxes owed pursuant to Unemployment Insurance (UI) and Paid Family Leave (PFL)?

Answer: No

An employer must make separate payments to cover their obligations under the District's UI and PFL taxes. For example, a combined UI/PFL payment made under the UI payment portal will only get credited to UI taxes, thereby overpaying UI tax but leaving the PFL unpaid. Note that the UI quarterly return, Form UC-30, must be filed before filing the PFL Form PFL-30 quarterly return. Although UI and PFL taxes are paid separately, the UC-30 is used to report employee total wages for both programs.

Question 2: Is it necessary to include a payment voucher in addition to my tax payment?

Answer: Yes

Employers filing their quarterly PFL leave returns electronically through the Department's Employer Self-Service Portal (ESSP) but choosing not to also pay the PFL assessment electronically using the ACH Debit method, and to instead send a paper check, must include a PFL voucher with their PFL check. Checks must be made payable to DC Treasurer. The voucher is required for the processing of the payment. Employers failing to include a voucher will see a delay in payment processing, which could result in late payment penalties. The Office recommends using the automated payment wizard in the ESSP to generate the voucher.

• Third-Party Agents: Each check payment must match the amount owed on a single voucher; i.e., one check, one voucher.
• Vouchers and check payments must be mailed to the PFL lockbox at: DC Government Paid Family Leave, P.O. Box 98269, Washington, DC 20090.

Small employers with fewer than five employees that are unable to file PFL quarterly returns electronically must mail the paper Form PFL-30 and paper check to the Department's main headquarters address for processing at: Office of Paid Family Leave, Tax Division, Suite 4300A, 4058 Minnesota Avenue NE, Washington DC 20019. Employers filing on paper must not send the forms and payments to the PFL lockbox.

Updated frequently asked questions can be found on the PFL website.

History

As we reported, employers began reporting and paying an employer assessment as of the second quarter 2019, with payments due no later than July 31, 2019, equal to 0.62% of covered employees' gross wages for the quarter. (EY Payroll Newsflash Vol. 20, #079, 6-26-2019.)

Unlike other recently enacted state paid leave programs, the District's PFL program is funded 100% by employers and employers are not allowed to deduct any of the assessment from employee wages. Although the program's effective date was July 1, 2019, employers were required to report gross employee wages from April 1, 2019 through June 30, 2019 (second quarter 2019) and pay 0.62% of these gross wages by July 31, 2019.

Also, although the program bases the definition of employee wages on state UI law, there is no wage limit, as is provided for under UI law (i.e., the $9,000 taxable wage limit for UI tax computation purposes). As a result, District employers pay 0.62% of gross employee wages each quarter.

Employers should download the District's employer's toolkit for further information on determining which of their employees are covered under the program.

Covered employers are required to report and pay electronically using the same ESSP system that they use for filing and paying UI taxes. However, reporting and paying for PFL is separate from UI tax reporting and paying. Businesses with fewer than five workers that do not have computer access may request to file on paper.

Employers are required to post a notice about the PFL program at each worksite in a place that is accessible to all workers. Employers must also send a poster to covered workers who work remotely or predominately telework so that they can hang the posters at their individual worksites. Employers must also provide written or electronic notice to employees upon hiring, annually to all workers, and whenever an employer becomes aware that PFL is needed. See the employer's toolkit for examples of when and where employers should notify employees of the program. Violations of the notice requirements may result in a civil penalty of $100 for each covered worker who did not receive and individual notice and $100 for each day that a covered employer failed to post the notice in a conspicuous place at each worksite.

Beginning July 1, 2020, private sector employees in the District will have access to eight weeks of paid parental leave, six weeks of paid family leave and two weeks of paid medical leave. The weekly benefit amount will be 90% of the worker's average weekly wage, up to a maximum of $1,000 per week.

Self-employed individuals may now opt in to the paid family leave program via ESSP and begin reporting their self-employment income and paying quarterly contributions. Beginning July 1, 2020, these individuals will be able to file for PFL benefits.

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EY Payroll News Flash