March 31, 2023
You might have heard that the United States has one of the worst paid family leave policies in the entire world. And in fact, the United States is the only industrialized nation that does not legally mandate at least some form of paid maternity and/or paternity leave after the birth of a child. In the entire United Nations, only seven countries, including Micronesia and Papua New Guinea, can claim this statistic. But DC Paid Family Leave is better than most U.S. programs.
This, of course, even though American women are estimated to lose $274,044 in lifetime wages because of a lack of paid leave. Not to mention that paid family leave (for both men and women) benefits physical health, mental well-being and the stability of the entire family.The good news is that where the federal government has failed, state and local governments have stepped in. At least in some places. Currently, eleven states and the District of Columbia have passed laws that mandate some form of paid family and medical leave. If you are employed by a company that is based in Washington D.C., you fall into this lucky category.
Family leave is time off to care for yourself or a family member for the following reasons:
In the United States, the Family and Medical Leave Act (FMLA), passed in 1993, allows up to 12 weeks of unpaid family or medical leave. This is paltry compared to most countries around the world. Indeed, over 120 countries provide paid family leave and health benefits. But again, not the United States.
The federal government in the United States has been slow to change this. Although President Biden built four weeks of federally mandated paid parental leave into his Build Back Better Act, the legislation ultimately died in the House of Representatives in 2021 after failing to pass in the Senate.
In the void, state governments have stepped in. To date, the District of Columbia has one of the most generous family leave policies available. The program is called DC Paid Family Leave.
Here’s a truth – what happened with the Maryland Prepaid College Trust is exceedingly rare. Additionally, the Maryland Prepaid College Trust is covered by the Maryland Legislative Guarantee. This law states that if the Trust ever experiences a financial shortfall, the Governor is required to include funds in the state budget to pay your full benefit.
Moreover, the tax benefits and return rate of investing in a 529 plan far outweigh the risk of an accounting error, or any other sort of issue with the account. To learn why, read on below.
If you live in Washington D.C., you are lucky compared to people in most states. Not so much as compared to other countries. In Norway, for example, parents can take up to 49 weeks of paid family leave, with 15 weeks reserved for each parent.
Why are you lucky? Because on July 1, 2020, the District of Columbia began administering taxes to all private sector employers to cover the DC Paid Family Leave benefit. The benefit covers twelve weeks of paid leave off in a calendar year. (Or 14 weeks if you also need prenatal care.)
To break it down, the benefit covers up to:
You can receive family leave benefits for multiple types of events in a calendar year. (For example, a sick grandmother and a new baby.) You just can’t receive more than the allotted 12 weeks off.
The maximum amount you can receive from the benefit is $1,049 a week. Your payment is determined by your average weekly wage. This wage is determined by averaging the highest-paid 4 our of 5 financial quarters immediately preceding the family leave event and dividing it by 52.
To estimate your payment, use this DC Paid Family Leave benefits calculator.
The qualifying requirements for DC Paid Family Leave are pretty simple. You must:
If you are self-employed, you can also qualify for DC Paid Family Leave as long as you:
If you are not sure if any of these qualifications, you can answer a questionnaire on the DC Paid Family Leave website. Either that, or ask your employer, who is mandated by law to require an answer.
People of all genders can apply for the program. In fact, if you are a new parent raising a child with another person, both parents can apply for the program. Woman, man, non-binary, queer, it doesn’t matter. Every person is entitled to the benefit.
Some parents like to take that time off together, in order to really cherish the time together with a new child. Others take their leave at different times in order to maximize savings on childcare. Given that Washington D.C. is the most expensive place in the United States for childcare – the average cost of a nanny in the District is $855 per week – the latter might be the most financially prudent option. In the three years since it was first enacted, DC Paid Family Leave has made an enormous impact on the lives of families in the area. According to the DC Department of Employment Services (DOES) January 2021 report, more than 80% of those who applied for the program identified as Black, Hispanic, Asian or multi-racial. Additionally, over 40% of those who applied have incomes of less than $50. Time will tell if the program addresses longstanding racial, economic, and health disparities, but so far, things look hopeful.
Unfortunately, if you are unemployed at the time of your family event or receiving long-term disability payments, you do not qualify for the paid family leave program. Additionally, if you are receiving unemployment compensation benefits, you do not qualify for paid family leave payments.
The short answer: as soon as possible. You cannot apply for benefits until the event has occurred. But if you wait more than thirty days after a qualifying event – for example, the arrival of a child – then you will only qualify to request benefits for leave in the future. If you file a claim within 30 days of the event, however, you can request benefits for dates you were on leave in the past.
In layman’s terms, you can recover in the hospital, get home, and in the first few weeks with your newborn, request payment for the weeks that you were giving birth and adjusting.
It’s worth repeating that you can apply for multiple Paid Family Leave events in a single year, you just cannot exceed twelve weeks of benefits in any given year. That is, unless you are granted 2 weeks of prenatal leave for a total of 14 weeks of benefits. Only people who are pregnant and need to receive medical care for their pregnancies can receive prenatal leave – sorry cisgender men!
Additionally, parents have a full year to apply for benefits. Which means that if your partner gave birth on August 1, 2023, you have until July 31, 2024 to take your leave. This also applies if you assumed guardianship for a sibling’s child or adopted or fostered a child. But if you don’t take it within the year, you lose the benefit.
Before things get crazy – and trust me, even diaper changes get crazy with a newborn – it would benefit you to get your paperwork organized so that you can apply for leave soon after the birth.
Here’s the information you’ll need:
Additionally, for paid parental leave you will need one of the following forms of proof:
For prenatal leave you need:
Even though this article is primarily aimed at new parents, it’s worth knowing what you need for the other types of leave – family and medical – covered by the program.
For a family leave claim, you will need two different types of documents:
And finally, for a medical leave claim, you need:
It’s important to note that you cannot receive compensation for work performed while receiving benefits from DC Paid Family Leave. You cannot claim, for example, that you are on paternity leave, get a check, and actually still go into your job every day, where you also receive a check. If you do this, your employer will report the wages, and you will get in trouble.
However, you are allowed to receive any maternity or paternity leave payments from your employer or their insurance company on top of the payments from DC Paid Family Leave. You are also allowed to collect payments for paid vacation or sick days that you are using as part of your leave.
In all cases, you must give your employer ten days notice that you are taking the leave mandated by DC Paid Family Policy. It’s a really good idea to do this in writing – for example, in an email to your supervisor. The email should include how long you expect to be on leave and the schedule. If you plan on taking your paid leave in chunks – for example, two weeks after the birth, and then 10 weeks when your partner goes back to work – then make sure you outline this in the document.
There are many reasons why you might need paid family leave even while working. For example, maybe you work two different jobs. One of them is in DC, and the other is in Maryland. Maryland’s paid family leave policy does not go into effect until October 1, 2023, so you might not be covered for that job. The days you normally work in DC are covered by DC Paid Family Leave, and you can get compensation for them through the policy.
Or maybe you went back to work soon after the birth of your child but are struggling to find full-time childcare. (And trust me, this is normal.) Your mother-in-law can watch your child three days a week, but you need to stay home for two days a week. As long as you have not yet been paid out for a full 12 weeks of leave, and are within a year of your child’s birth, you can still claim benefits for the days you cannot work. This is known as “intermittent leave,” and should be marked on your application to the program.
The other type of leave, known as “continuous leave,” does not allow you to receive wages for work.
Here’s some bad news – district government and federal employees are actually excluded from applying for DC Paid Family Leave.
But there’s a silver lining. On October 1, 2020, the Federal Employee Paid Leave Act (FEPLA) was passed. It mandates that federal employees are entitled to 12 weeks of paid parental leave following the birth or placement of a child. Similar to DC Paid Family Leave, the leave must be taken within 12 months of the birth. Before taking the leave, employees are obligated to sign a contract stating that they will return to work for at least 12 weeks when the leave concludes.
In short, federal employees can’t use DC Paid Family Leave, but they do have their own comparable program.
Absolutely! Even if you have really great health insurance, you can expect to pay $2,167 for a c-section and $2,147 for a vaginal birth as a DC resident. (These are out of pocket costs.)
And not to scare you, but, again, DC has the highest average cost of childcare in the United States. On average, you can expect to spend $24,243, or $2,020 per month, on childcare for your infant when you go back to work.
With everything else you have to pay for – yes, you should probably open a 529 or Roth IRA to begin saving for college soon after the birth of your child – you may be thinking to yourself, how will we survive financially, even with paid family leave?
You can start by putting away a little bit extra every month for extraneous costs after the birth in a high-yield savings account.
Ultimately, however, you should return to the basics. Make a budget, figure out where you have extraneous spending, and then put that spending into an account to prepare for your child’s first year of life.
Then, let the bonding commence.
What questions do you still have about DC Paid Family Leave, and family leave in general? I encourage you to send me an e-mail at email@example.com with anything else you would like to know. You also can subscribe to my finance podcast for Millennials to learn more how you can maximize the time you have with your family.
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Hi, I’m Kevin. I’m the founder of Illumint and a financial advisor in Washington, DC. I specialize in financial planning for Millennials like you. As a Millennial father and Certified Financial Planner™, I empower our peers to invest with confidence and flexibility. If you’re new to Illumint, I’m glad you’re here – you now have access to the leading college finance blog for Millennial parents. I encourage you to read, watch, or listen to the ideas I share about exchanging your money for memories with your kids. And then when you’re ready, please send me your thoughts & questions!
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