jonetta rose barras: Paid leave — businesses have it covered

Even before the DC Council-approved Universal Paid Family Leave Act takes effect, there is evidence it could cost more to implement than initially estimated. Equally disconcerting, the law may be superfluous.

A survey conducted by the Department of Employment Services (DOES) between April 6 and May 7 found that 56 percent of the 1,383 respondents provide medical leave while 47 percent offer parental leave and 40 percent offer family leave. Of those providing benefits, 80 percent said they provide them to full-time employees, 25 percent to part-time workers and 1.5 percent to seasonal employees.

Those results appeared in the third DOES progress report, released in July 2018, that tracks the agency’s implementation of the law. The numbers bolster the argument that District leaders may be engaged in an expensive, risky wheel-reinvention exercise that needlessly taxes local businesses while spending exorbitant amounts of public dollars to create another unnecessary plank in government bureaucracy.

Equally troubling, said Vincent B. Orange, president of the DC Chamber of Commerce and former at-large DC Council member, is the fact that people who live outside the District will be the largest beneficiaries of the law. “The business community agrees there should be paid leave,” Orange said. “It is opposed to the $250 million in taxes that will be placed on [it], especially when $160 million of that money will be used to provide benefits to non-District residents.”  

The law, which does not take full effect until 2020, mandates all District-based private-sector businesses provide up to eight weeks of parental leave, six weeks of family leave and two weeks of medical leave for eligible employees. Weekly benefits are capped at $1,000. The money for benefits will be extorted from businesses through a tax of 0.62 percent on employee wages or the annual income of self-employed workers.

At-large Council member Elissa Silverman, one of the law’s architects, dismissed the survey findings. “We don’t know how many days they are providing — it could be five days or two days. We just don’t know.”

Say what? As chair of the Committee on Labor and Workforce Development with oversight of the DOES, isn’t it her responsibility to know what those numbers mean?  

Public policy should not be implemented in a vacuum. Elected officials confronted with new and critical data have an obligation to fully analyze them and determine whether alterations are needed.

Instead of hitting the pause button, however, Silverman and the gang of paid-leave advocates have locked in. “Paid leave is overwhelmingly popular. Every time District residents have said they want it,” Silverman told me. “Working families need help in our city.”

Except only $90 million of the quarter billion dollars to be collected from the business community will be available to District residents, Orange said. Even people who are self-employed and don’t spend their full workday in the District could tap into the benefits fund.

That’s gross injustice, bad public policy or both.

I hadn’t intended to rehash the paid-leave debate, although it likely will be a point of contention in upcoming election forums, featuring candidates for the council’s at-large seat. Silverman, an independent, is running for re-election. She could face several strong opponents including S. Kathryn Allen, who has drawn support from the business community.

I don’t have a candidate in that fight. However, the progress report from DOES has exposed problems with the law and enormous costs associated with its implementation.

District taxpayers will foot the bill for creating an Office of Paid Family Leave, which as planned will consist of multiple divisions in charge of taxes, benefits, benefit control, appeals, physician certifications, a call center and support, according to DOES. The report also indicates that the government will need “systems, software, data, information, document facilities and resources to initiate, manage and administer the PFL program. A fully functioning [computerized] tax system must be available by spring 2019 and be ready to collect taxes on July 1.”

“This is a big project with deadlines to hit,” said Silverman, noting that money to hire 70 new people was placed in the 2019 budget.

However, DOES officials have projected that ultimately the Office of Paid Family Leave will need as many as 124 full-time employees. Don’t think those will be all entry-level jobs. And don’t think the tax on the businesses will cover all administrative costs.

The “OPL will be funded by local and capital funds,” DOES director Unique Morris-Hughes said in an email response to questions about certain details in the report. After full implementation of the law, she said, “not more than 10 percent of the funds deposited will be utilized towards administrative costs.”

None of that seemed to phase Silverman, who ironically pointed to two corporations — Walmart and Hilton Worldwide — to support her argument for paid leave. “Walmart is offering 16 weeks of paid leave to their employees. It’s the right thing to do, but that’s not why businesses do that stuff.

“They do it because it’s in their self-interest,” added Silverman.

That’s the point. Never mind their motivation, businesses have come to understand the importance of offering adequate benefits packages. Shouldn’t the government step out of their way, allowing them to look out for themselves?

jonetta rose barras is a DC-based author and freelance writer. She can be reached at thebarrasreport@gmail.com.