Will D.C.’s Business Lobby Undermine the District’s Paid Family Leave Program?

Two city council members have proposed an alternative plan that claims to offer workers the same benefits while lowering the payroll tax employers will have to pay.

A national poll last year found that 72 percent support paid family leave. Shutterstock

The D.C. Universal Paid Leave Act faces an uncertain future, as some District officials propose alternatives while the city’s business lobby continues to oppose the popular policy.

City council members Mary M. Cheh (D-Ward 3) and Jack Evans (D-Ward 2) have introduced an alternative paid leave bill that claims to offer the same benefits while changing the way they’re funded, the Washington Post reported.

The current bill, which passed in December and is pending a mandatory 30-day congressional review, relies on a 0.62 percent payroll tax to provide private part-time and full-time D.C. workers—including those living outside the District—two weeks of personal medical leave, six weeks to care for sick relatives, and eight weeks of paid leave following childbirth, adoption, or a new foster-care arrangement. The District would reimburse all private-sector workers on leave between 50 and 90 percent of their weekly paycheck, depending on their salary.

The alternate bill proposed Tuesday would split employers into two groups and require each to fund benefits differently. Large employers, or those with more than 50 workers, would pay a 0.2 percent payroll tax and be allowed to create their own benefit programs. Small businesses, on the other hand, would operate under a government-run program and pay a 0.4 percent tax, WAMU reported.

Some paid leave supporters have said the alternative proposal stems from backdoor deals and aggressive business lobbying.

Records show beer conglomerate Anheuser-Busch lobbied the D.C. Council on a paid-leave bill, though it’s unclear which side it lobbied for, according to WAMU reporter Martin Austermuhle. Officials from American University, an opponent of the policy that passed in December, met with Cheh to discuss the bill, Austermuhle reported.

Jacob Feinspan of Jews United for Justice, one of the organizations participating in the D.C. Paid Family Leave Coalition, told WAMU that he thought the business lobby was trying to “undermine the democratic process.”

“We expect to be moving towards a program, and not for there to be a backroom effort to reopen the whole debate,” Feinspan said.

Jaime Contreras, vice president of 32BJ Service Employees International Union, said in a statement on behalf of the D.C. Paid Family Leave Coalition that the council has given working families another reason not to trust politicians by “caving to industry lobbyists and missing a critical opportunity to reduce D.C.’s shamefully high health and income inequality.”

Cheh said last year that the Universal Paid Leave Act had major flaws, but she voted for the measure after the failure of an “employer mandate” alternative she pushed.

Evans, who also supported the employer mandate model, which was promoted by a university consortium and the D.C. Chamber of Commerce, voted against the bill in December.

Cheh told the Post that council members will have plenty of time to change the funding mechanism for the paid leave program because of the current bill’s long implementation period. The $250 million program, which is set to be managed by an internal District agency, is scheduled to debut in 2020.

Council member Elissa Silverman (I-At Large) told the Post that Cheh and Evans’s proposal would require setting up an entirely new bureaucracy.

Silverman, who introduced the paid leave bill with David Grosso (I-At Large) in October 2015, told WAMU that the alternative proposal’s lower tax rate would result in lower benefits for workers.

Other paid leave alternatives that could be introduced in city council this year include a measure requiring that a third-party contractor run the program instead of a District agency.

Council Chair Phil Mendelson (D) hinted last week that he was open to altering the bill, after D.C. Mayor Muriel Bowser returned it to council members unsigned.

Although Mendelson championed the paid leave policy last year, Cheh said he promised her he would consider changes to the bill if she promised not to vote to sustain a potential veto from Bowser, WAMU reported.

D.C. Fiscal Policy Institute Senior Policy Analyst Ilana Boivie said in a blog post this week that any alternative funding structure, like the proposal from Cheh and Evans, should be carefully studied. The institute, Boivie said, plans to assess new paid leave bills to see they can ensure that all people—including those who work for low wages—have the same access to benefits and whether the programs are “financially predictable and administratively manageable for employers of all sizes.”

A national poll conducted by the Associated Press and NORC Center for Public Affairs Research last year showed overwhelming bipartisan support for paid leave. Released in May 2016, the poll found that 72 percent of those surveyed support paid family leave. That support was stronger among women, Democrats, and people ages 40-to-64.