Dear Members of the District of Columbia City Council,
On behalf of National Taxpayers Union’s (NTU) members, I strongly urge you to oppose the “Universal Paid Leave Act of 2015” (UPLA), which would amend the D.C. Medical Leave Act of 1990. UPLA was introduced earlier this month by Councilman David Grosso and Councilwoman Elissa Silverman. The legislation was the result of a study funded by the United States Department of Labor to determine ways of implementing paid-leave. Simply put, the bill raises the costs of doing business in the District of Columbia and creates disincentives to the hiring and promotion of women in the workplace.
If enacted, UPLA would allow employees in D.C. to take up to four months of paid leave for the birth of a child or for illness. During the leave period, employees would be eligible to receive their full salaries up to $1,000 per week, then 50 percent of their weekly salary after that up to $3,000 per week. This scheme would be funded through a payroll tax on employers of between 0.6 percent and 1 percent of each employee’s annual salary.
The District of Columbia is prohibited by federal law from imposing taxes on the largest employer in the city, the federal government. As a result, employees of the federal government would be responsible for paying the tax on their own.
While the intentions of UPLA are noble, the unintended consequences of the plan would be significant. First, UPLA would raise costs on city businesses and the city government. As the Washington Post’s Editorial Board stated, “[UPLA] is not grounded in reality and would end up hurting the District and its workers by driving up costs and driving jobs away.” Capital is mobile and price-sensitive; companies thinking about locating to the District might reconsider such a move in light of UPLA.
Not only would the plan hurt businesses, it could hurt the very people it is designed to help. Diana Furchtgott-Roth, Director of Economics21 at the Manhattan Institute and former Chief of Staff to the Council of Economic Advisers, recently wrote in MarketWatch, “Higher taxes discourage women from entering the workforce, because a larger share of their paycheck goes to the government. Higher business costs discourage women from being hired. If a firm can choose a man who does not come with the cost of four months’ paid leave, men are more likely to be hired.”
UPLA would be the most generous paid-leave law in the entire United States – far more than New Jersey’s and California’s, which provide up to six weeks of paid leave. UPLA would be paid for with lower wages, fewer employees and a declining tax base. Accordingly, NTU urges you to oppose UPLA.
Federal Affairs Manager, National Taxpayers Union