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D.C. Paid Leave Law May Change Hill Staff Income Taxes

Hill staff who are District residents may face new taxes under a proposed paid leave law. (CQ Roll Call File Photo)

Hill staffers who are District residents could see a new line on their tax forms if D.C.’s proposed paid leave plan becomes law: a special tax for residents whose employers, such as the federal government, are not paying into D.C.’s Family and Medical Leave Fund.  

The additional tax would not be more than 1 percent of a individual's salary, according to Jeffrey Hayes, a study director with the Institute for Women's Policy Research, who has studied the costs and benefits of paid leave for workers, employers and communities. Hayes added that the proposal anticipates contributions will drop below 1 percent once the program is up and running, and that evidence suggests it is possible to have a self-sustaining family and medical leave insurance system at that level. Contrary to initial information provided about the nascent proposal, District residents who are employed by the federal government, including on Capitol Hill , do not need to opt-in to receive the 16 weeks paid family and medical leave. Rather, up to 1 percent of a district resident’s income would be collected as part of an income tax calculation if their employer, such as the federal government, is not making a contribution.  

The proposed legislation includes specific language in Sec. 106 (d) that requires each resident of D.C. to contribute to the fund “in a manner and form prescribed by the Mayor,” which could be either as part of the income tax collection or as a separate line in an employee's paycheck.  

Employees whose employers pay into the fund would not be required to pay the additional tax. A spokesperson for D.C. Councilmember Elissa Silverman, a co-author of the legislation, had explained that this was because of the limits of taxation: The D.C. government could not lawfully levy a tax on the federal government. Self-employed individuals are the only group of employed D.C. residents who have the option to opt-out.  

“The coverage will be universal for all District residents and anyone who works primarily in D.C. in the private sector,” Silverman's legislative director, Ari Weisbard, said. “Only federal workers who live outside the District won’t be covered, because the Congress doesn’t allow the District to tax them or their employer.  

The proposed D.C. law would offer up to 16 weeks paid family and medical leave to all District residents and residents from other states who work for a private D.C. company. While the law would dramatically alter the landscape on paid leave, it also has the potential to widen the paid leave disparities in places like Capitol Hill, which lacks a coordinated paid leave plan and relies on ad hoc leave policies.  

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