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San Francisco’s Paid Parental Leave Law

1/9/17

By: Julie Marquis

Effective January 1, 2017, the Paid Parental Leave Ordinance (“PPLO”) requires San Francisco businesses provide supplemental compensation to employees who use California Paid Family Leave (“PFL”) benefits for bonding following the birth or adoption of a child. California’s PFL Law provides benefits of up to 55% of an eligible employee’s normal wages for six weeks.  The PPLO requires employers to pay the difference, up to a cap, between the employee’s PFL benefits and total gross weekly wages such that the employee’s PFL benefits and PPLO supplemental compensation equal 100% of the employee’s gross weekly wages during the leave period.

Who is a covered employer?

Businesses with 20 or more employees with at least one employee who works in San Francisco. Employers of 50 or more employees must comply beginning January 1, 2017; those with 35 or more employees must comply beginning July 1, 2017; employers of 20 or more employees must comply beginning January 1, 2018.

Who is an eligible employee?

An employee who:

1. Began employment with a covered employer at least 180 days prior to the start of the leave period;
2. Performs at least eight hours of work per week for the employer in San Francisco;
3. Performs at least 40% of his or her total weekly hours worked for the employer; and
4. Is eligible to receive PFL benefits under the California PFL Law.

What must an eligible employee do to receive benefits?

An eligible employee must complete and submit to his or her employer the San Francisco Paid Parental Leave Form (“PPL Form”) and either provide the employer with a copy of the Notice of Computation form received from the California Employment Development Department (“EDD”), which reflects the employee’s PFL weekly benefit amount, or provide the EDD with permission to share the employee’s PFL weekly benefit amount with the employer. This allows the employer to calculate the amount of supplemental compensation.

What if an employee works for more than one employer?

Where an employee works for more than one covered employer, the amount of supplemental compensation is apportioned between the employers based on the percentage of the employee’s total gross weekly wages received from each employer. Where an employee works for a covered employer and a non-covered employer, the covered employer is responsible only for its percentage of the employee’s total gross weekly wages.

What other requirements must be met to comply with the new law?

Covered employers must post the required PPLO Poster at every work place and job site. Notices must be posted in English and any language spoken by at least 5% of employees at the workplace or job site.  Covered employers must also provide the PPL Form to San Francisco employees, who must complete the form to receive supplemental compensation.  If the employer publishes an employee handbook describing other kinds of personal or parental leave available to its employees, the employer must include a description of the supplemental compensation rights under the PPLO in the next edition of its handbook. Covered employers must also keep records documenting the payment of supplemental parental leave compensation for three years.

Does the PPLO include enforcement provisions?

Yes; the PPLO prohibits retaliation or discrimination against an employee for exercising the right to supplemental compensation. An employer who takes adverse action against an employee within 90 days of the employee’s protected activity must overcome a rebuttable presumption of retaliation. The San Francisco Office of Labor Standards Enforcement may investigate alleged violations and enforce the PPLO administratively through a hearing process, where potential remedies for violations include payment of unlawfully withheld supplemental compensation, plus penalties and interest.  The PPLO also provides a private right of action for violations.

Employers should have a policy addressing the PPLO requirements and train personnel in managing compliance with the policy. For guidance or answers to questions, please contact Julie Marquis at jmarquis@fmglaw.com in FMG’s San Francisco office.