Washington, DC’s Mayor Muriel Bowser said this week she will not veto a paid-leave bill that was passed by the DC Council on Dec. 20.

Bowser’s action lets the law take effect without her signature. Bowser said in a letter to the council this week that she continues to have “grave concerns” with the bill and she hopes to work with council members to address its deficiencies. She said the legislation represents “one of the biggest tax increases in DC’s recent history” and extends two-thirds of its benefits to non-DC residents.

The bill will create roughly $250 million in new taxes on local businesses in the District to fund two months of paid time off for workers to care for newborns or adopted children. The bill, which applies to both full and part-time workers, also grants employees six weeks of paid leave to help ailing relatives. Two weeks of leave are available for personal sick leave.

The bill was heavily resisted by DC business leaders, many of whom warned of a long-term drag on the city’s budget and a possible exodus from the city limits for some area businesses.

ASAE and a coalition of Washington, DC-based business and university groups proposed an alternative “Employer Mandate” plan, whereby small and medium-sized organizations would have two years to implement a paid-leave benefit for their employees. ASAE supported the Employer Mandate proposal because it would have preserved the existing employer-employee benefits relationship and would have left the DC government out of managing paid leave benefits. Many DC employers already offer paid leave benefits, but for those smaller organizations that don’t currently offer paid leave, the plan would have created a shared-risk insurance pool through the private insurance market to help offset the cost.

While a veto from Bowser would have sent the law back to the council, DC Council Chairman Phil Mendelson had the votes to override a veto if necessary. The law will still have to survive a review by Congress, as is the case with all DC laws.