We're used to thinking of generous paid leave for new parents as something only workers at fancy startups (like Vox Media, with up to 12 weeks of paid leave and a ton of job openings) or Europeans suffering under the jackboot of socialism enjoy. But Washington, DC, could be poised to leapfrog the rest of the country and adopt a benefits scheme that is practically Spanish (though nowhere near French or Swedish) in terms of its generosity.
That's thanks to a bill introduced into the DC Council today with the provisional support of a majority of council members. The DC Chamber of Commerce is opposed, and neither approval nor mayoral signoff is a sure thing. But it looks likely that new DC parents will soon get a guaranteed 16 weeks of paid leave — and a somewhat obscure Obama administration initiative will have played a key role in getting it done.
All workers in DC would get 16 weeks of paid leave
The legislation, as described by Tina Reed at the Washington Business Journal, would offer 16 weeks of paid leave on the following basis:
- 100 percent of average weekly pay up to $1,000 a week
- 50 percent of average weekly pay above that
- A maximum benefit of $3,000 per week
The sliding scale is an effort to balance two considerations. On the one hand, the council wants the policy to operate as a real social insurance measure that will be widely used by middle-class people rather than a narrow welfare benefit for the poor. On the other hand, making benefits fully proportional to earnings would make the program much more expensive without doing anything to help the people most objectively in need of help.
The highest-income workers who would receive the lowest replacement rate are, presumably, thought to be the kinds of workers who are likely to have jobs that carry their own leave benefits.
All non-federal employers would pay higher taxes
The program will essentially be financed by a progressive payroll tax that, according to Aaron Davis at the Washington Post, would start at a 0.6 percent rate and rise to a 1 percent rate for the highest-paid employees, with two twists to comply with unique circumstances applying to the District of Columbia.
The tax will be levied on employers rather than on employees, because federal law prevents the District from implementing any kind of commuter tax on Virginians and Marylanders working in DC.
But the largest employer in the District of Columbia is the federal government, and, constitutionally speaking, DC can't tax the federal government. So federal employees who live in the District will pay a tax and will be eligible for benefits. But federal employees living in Maryland and Virginia cannot be taxed on either the employer or the employee side, so they will be exempt from the program.* Freelancers and the self-employed would also be eligible to participate on a voluntary basis.
This is much more generous than other major proposals
The DC program, if implemented, would be significantly more generous than the six-week programs currently in place in California and New Jersey.
It would also be much more generous than the FAMILY Act that Democrats in Congress have been pushing. That bill would offer 12 weeks at 66 percent of normal salary with a maximum benefit of $1,500 a week, with costs that are, naturally, more modest as a result.
Obama's paid leave strategy is bearing fruit
The DC program is in part the result of a federal grant the city received from the Department of Labor, which has begun handing out cash to interested states and cities to help assist in the design of paid family leave proposals.
That initiative is part of a deliberate strategy by President Obama to do what he can to nudge the country in the direction of adopting a comprehensive paid leave strategy, given the reality that a GOP-controlled Congress is obviously not going to agree to a giant new tax and set of business regulations. The actual amount of money involved is modest, but every dollar counts when it comes to state and local governments, which often lack extensive in-house support for technical policy analysis and where policymakers legitimately worry about the possibility of adverse economic effects.
The District of Columbia, whose local economy is dominated by the federal government and related industries and whose downtown office district is legally prohibited from adding more jobs and office space, is probably better situated for a general leave program than a place like Detroit or Denver would be.
* Correction: An earlier version of this article stated that federal employees residing in Maryland or Virginia could participate in the program on a voluntary basis. This is not the case, as allowing voluntary participation would create a serious adverse selection problem.