July 1.
In the area of the country where I live, DMV means one of two things. The dreaded Department of Motor Vehicles, where waits can be long enough to keep one engaged (and enraged) all day long. But, it also means the DC, Maryland, and Virginia region. And, that means on 1 July, it’s the time when many a rule changes forever.
This year, employers practices haven’t been tampered with unless one has DC employees.
We can start with the minimum wage. DC will now require all employees to be paid a minimum of $ 14 an hour. (It goes up a buck next 1 July to $ 15 an hour.)
But, more importantly, tipped workers who have ridiculous low wages (somehow our governments expect them to become millionaires off the tips they make) will now get their wages supplemented by any DC employer to ensure they, too, make $ 14 an hour. (In DC, the tipped worker wage was $ 4.45 an hour. In Maryland, that minimum wage is $ 3.63 an hour, while in Virginia, one only has to pay tipped workers $ 2.13 an hour!)
Now, for the other, pretty controversial change. But, first, a little .history.
In 2016, DC enacted probably the most liberal paid leave law in the US. This provided employees 8 weeks of paid parental leave, 6 weeks of paid family leave, and 2 weeks of paid personal medical leave.
Who must comply with this law? Under the DC Unemployment Compensation Act, it means any employer that has 1 or more employees in DC. Oh, wait- it means if you have any employee that spends 50% or more of his/her time working in DC (even if the employer doesn’t have an office in DC, including the fact that one may have remote workers in DC).
And, now, effective 1 July, this means a new 0.62% payroll tax is imposed on the gross wages of each employee- including bonuses, commissions, etc. Given how unemployment taxes are paid and filed, this means the employers will file their forms no later than 31 October of this year. (Like all other taxes, there will be penalties and interest for non-payment, late filing, etc.)
Oh, and here comes the real kicker. No employee will be able to claim any such benefits until 2020. So, the next four quarters where payments by employers will be made are only establishing a treasury from which those covered will be able to draw starting on or after 1 July 2020.
Wow! Starting with the second issue, the rhetorical question is, “How can this be fair?” Build up the treasury fund? I get it… but if I paid into it and had to take leave in 6 months and am NOT eligible, I would be ticked!
And as for the minimum wage for servers – yikes! That can only mean price increases in restaurants and a whole slew of reporting issues (“How much were your cash tips tonight?” How can that be proved without violating civil rights and such…). I am glad I am not there in DC!
Paul Taubman recently posted..How to Choose Safe, Free Plugins
I am totally with you on the first paragraph, Paul.
Servers rarely make their money in cash nowadays- their tips are included on the credit card bill, so it’s no longer a question that must be asked of them- it’s money the employers collect and divvy out.
Nothing so constant as change, huh? However, it’s when the change impacts our life that we really pay attention to it. Thank you for the update.
Lori Ferguson recently posted..Laugh Together to Connect
At least, the rest of the US did not have such dramatic a change, Lori…
I do learn a lot from reading your blog, Roy, including the minimum wage situation you describe here. It is all quite interesting…. hmm.
Barb recently posted..Should You Ditch the Sales Funnel?
Glad I can provide an edifying read, Barb. Thanks for visiting!
First I had heard of any of this. In New York State we have a sort of paid family leave through insurance each employer must carry. This sounds even more complex.
So, the employer must obtain the insurance- but can collect 0.126% from the employees to cover part (or all) of the costs. In DC, the employer pays all the premiums.
Very informative article.
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Great work. Thanks for posting !! Keep Blogging
Thank you so much, John!
And, I plan to do so!