Employment Law Alert – Most D.C. Employees Entitled to Commuter Transit Subsidy Under New Law
October 16, 2015
Most D.C. Employees Entitled to Commuter Transit Subsidy Under New Law
January 1, 2016 will bring about an important change for employers (non-profits included) based in the District of Columbia. By this date, businesses employing 20 employees or more must begin offering commuter benefit transportation subsidies to their employees. The aim of the federally-approved program is to allow employees to reduce their monthly commuting expenses for transit, vanpool, biking and parking, while also reducing single occupancy vehicle use. Under the new law,covered employers – those that have 20 or more employees – must provide at least one of the three transportation benefits listed below:
A benefit program that allows employees to elect to set aside pre-tax funds each month to pay for their “commuter highway vehicle [van pool], transit or bicycling” commuting costs, consistent with Section 132(f)(a)(A), (B), and (C) of the Internal Revenue Code;
An employer-paid benefit program in which the employer supplies, at the employee’s election, a transit pass or reimbursement of vanpool or bicycling costs in an amount at least equal to the purchase price of a transit pass for an equivalent trip; or
Employer-provided transportation at no cost to the employee in a vanpool or bus operated by or for the employer.
Employers can implement a range of offerings based on what works best for company culture and budget. Many companies will be able to offset some or all of the cost of the new requirement through tax savings and/or through reallocation of funds that are currently being used to subsidize parking.
D.C. Council Proposes New PAID Family And Medical Leave Law
The District of Columbia could become the first U.S. city to fund paid family and medical leave for nearly all of its residents. If passed, the proposed Universal Paid Leave Act of 2015 would make all full and part-time workers who reside in D.C. eligible for 16 weeks of paid leave in a 12 month period. This leave could be applied to personal illness, care for an ailing family member or to spend time with a new biological or adopted child.
The program will be funded from a new tax on private D.C. employers, which will pay between 0.6% and 1% of their employees’ salaries into the fund. Employees who make up to $52,000 a year will continue to receive their entire salary during their leave. Employees who earn more than that will be eligible to receive $1,000 per week of leave plus half of their salary in excess of $52,000, up to $3,000 per week. D.C. cannot compel the federal government, or District residents who work in other jurisdictions, to pay this tax. Those same D.C. residents can, however, still participate if they individually opt into the fund by contributing not more than 1% of their annual salaries. Paid leave under the new plan would run concurrently with leave taken under the federal Family and Medical Leave Act and its local D.C. counterpart. If the proposed Act becomes law, all employers with at least one “covered employee”, as defined by the law, will be required to contribute to the Family and Medical Leave Fund established by the D.C. government.
While still in the proposal stage, the general tone of the D.C. Council suggests that the bill’s supporters believe it will be signed into law by Mayor Muriel Bowser within the next 6 months. If that happens, those who live and/or work in D.C. could start taking paid family leave one year later.
A Refresher Course: Maryland’s Parental Leave Act
D.C. is not the only jurisdiction that provides leave to new parents. The Maryland Parental Leave Act (“PLA”), which went into effect October 1, 2014, guarantees limited unpaid leave for new parents working in Maryland.
The PLA applies to all employers that employ between 15 and 49 “eligible employees,” i.e. those employees who qualify under the statutory criteria. Those employees are entitled up to 6 weeks of unpaid leave during any 12-month period for the birth, adoption, or foster placement of a child with the employee. Employers may require employees to substitute their accrued paid leave prior to the commencement of unpaid leave. Any use of accrued paid leave must comply with the Maryland Flexible Leave Act’s requirement that, if the employer has more than one type of paid leave (i.e., sick leave and vacation leave), the employee must be permitted to elect the type and amount of leave to be used.
While employers are not obligated to pay employees for this parental leave, the PLA does impose several obligations on the employer that are very similar to the requirements under the federal FMLA. Those requirements include:
Continuation of Insurance Coverage: The employer must maintain that employee’s coverage for the duration of the leave if the employee is enrolled in the employer’s group health insurance plan.
Job Restoration Rights: At the conclusion of leave, the employer must (with limited exception) restore the employee to the same or equivalent position with equivalent benefits, pay and “other terms and conditions of employment.” Unlike the federal FMLA, however, the PLA mandates that employers may only terminate an employee while he or she is on protected leave “for cause,” a standard left undefined by the law.
Prohibitions on Interference and Retaliation: An employer may not interfere with an employee’s right to take PLA protected leave, nor may an employer retaliate against an employee for pursuing his or her rights under the PLA. The PLA provides eligible employees with a private cause of action that can be used to sue the employer for such violations. If successful, the employee may recover damages in the form of lost wages/salary, employment benefits or lost/denied compensation, plus a mandated court-award of reasonable attorneys’ fees and costs.
Be sure to review your leave policies and procedures to make sure your company is in compliance.
The contents of this Alert are for informational purposes only, and do not constitute legal advice. If you have any questions about this Alert, please contact a member of the Shulman Rogers Employment and Labor Law Group or the Shulman Rogers attorney with whom you regularly work.