The Universal Paid Leave Act Makes The Most Sense For Workers, Employers, And Taxpayers (October 3, 2017)

By: Ilana Boivie, DC Fiscal Policy Institute

The Universal Paid Leave Act (UPLA) passed last year by the DC Council guarantees that people who work in DC can take time off from work, with pay, when they need to be with a new baby, care for an ill relative, or address their own health need. The program, designed in conjunction with national experts, uses a proven “social insurance” model like Social Security, which results in low administrative costs, very limited administrative burden on employers, and a transparent system for both workers and their employers.

Despite UPLA’s many advantages, several bills have been introduced to “repeal and replace” it. Most of the alternatives focus on an “employer mandate,” where employers provide the benefit directly rather than through a public fund. A review of the alternatives shows that an employer mandate undermines each of the advantages of UPLA: easy access to benefits for workers, predictable costs for businesses, and low administrative costs.

UPLA uses a social insurance model, like Social Security and Unemployment Insurance, which has been tested and proven to work. Under UPLA, all private-sector employers in the District will pay a fixed payroll tax into a government-run fund to cover the cost of benefits for their workers. When workers experience a qualifying event—welcoming a new child into their families or addressing their own or a family member’s serious health condition—the employee comes off the company’s payroll, and receives wage replacement from the public fund. The agency administering the fund is responsible for processing claims and paying benefits.