On May 25, 2021, DC Mayor Bowser signed B24-0217 into law. Enacted as Emergency Act 24-0082, which is effective immediately and expiring August 23, 2021, the new law prohibits short-term disability policies issued in DC from offsetting or reducing benefits based on DC Paid Family and Medical Leave payments.
Unfortunately, we have no additional guidance at this time as to how this provision will be administered. It is common for either the short-term disability policy or the state PFL program to offset benefits so that the employee does not receive more than 100% of their normal wages while on leave. In DC, an employer cannot interfere with an employee's right to PFML benefits. Thus, DC PFML benefits do not coordinate with short-term disability policies. In other words, DC PFML pays primary. This has resulted in short-term disabilities policies paying secondary to PFML with reduced benefits. However, the new law prohibits this practice.
We will continue to monitor this issue and report any developments. Employers should work with their advisor and short-term disability insurers to make any necessary changes to leave policies, documents and operations.
Emergency Act 24-0082 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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