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By: Kacie Manisco
The United States is the only developed country in the world that does not provide paid parental leave. In addition, unless an employer is covered under the Family Medical Leave Act (“FMLA”) or the California Family Rights Act (“CFRA”) – meaning the employer has at least 50 employees within a 75 mile radius – there is no law that requires a California employer to provide any baby bonding parental leave, paid or unpaid (though employees who suffer pregnancy-related disabilities may be entitled to leave for those disabilities under California’s Pregnancy Disability Leave law.) Of course, many California employers voluntarily provide maternity leave (and in some cases paternity leave) despite that they are not legally required to do so.
Under California’s Paid Family Leave Law, (“PFLL”) employees who take leave after the birth or adoption of a child are eligible to receive wage replacement benefits of up to 55% of their normal wages for six weeks. The PFLL benefit is administered by California’s Employment Development Department (“EDD”). Keep in mind, PFLL is a misnomer, as this law does not actually entitle employees to the leave itself. Rather, PFLL entitles employees to the wage replacement benefit when they are otherwise granted a leave.
On April 21, 2016, San Francisco Mayor Ed Lee signed an ordinance making San Francisco the first U.S. City to mandate fully paid parental leave for covered employees. Like the PFLL, this ordinance does not require employers grant the parental leave itself; rather, it requires employers supplement the wage replacement benefit new parents receive from the EDD pursuant to the PFLL.
Supplemental Compensation Under San Francisco’s Paid Parental Leave Law
San Francisco’s new ordinance requires covered employers to provide “supplemental compensation” in an amount such that the PFLL compensation, plus the supplemental compensation, equals 100% of the employee’s gross weekly wage. Accordingly, the ordinance will require employers to pay the remaining 45% of the employee’s weekly wages during the six week period that the employee is receiving PFLL benefits.*
A “covered employee” entitled to supplemental compensation under San Francisco’s new ordinance is an employee:
Who began employment with the employer at least 180 days prior to the start of the leave period;
Who performs at least eight hours of work per week for the employer in San Francisco;
At least 40% of whose total weekly hours worked for the employer are in San Francisco; and
Who is eligible to receive wage replacement benefits under PFLL for the purposes of bonding with a new child.
Covered Employers and Employer Phase-In
“Covered employers” are businesses with 20 or more employees located anywhere, so long as at least one employee works in San Francisco. The new law will go into effect on January 1, 2017 for covered employers with more than 50 employees, July 1, 2017 for covered employers with more than 35 employees, and on January 1, 2018 for covered employers with at least 20 or more employees.
Posting & Record Keeping Requirements
Covered employers must conspicuously post an Office of Labor Standards Enforcement (“OLSE”) notice informing employees of their rights at each workplace or job site where any covered employee works. Notices must be posted in English, Spanish, Chinese, and any language spoken by at least five percent of employees at the workplace or job site.
Covered employers must also keep records documenting any supplemental parental leave compensation paid for three years.
Protection from Retaliation
The ordinance protects employees from discrimination and retaliation for exercising their rights to supplemental parental leave compensation. A covered employer that takes adverse action against an employee within 90 days of the employee engaging in a protected activity (i.e., filing a complaint or cooperating with an investigation) must overcome a rebuttable presumption of retaliation.
Enforcement and Relief for Violations
San Francisco’s OLSE has authority to investigate alleged violations and enforce the ordinance administratively through a hearing. Potential relief for violations may include payment of unlawfully withheld supplemental compensation, as well as penalties and interest. The law further provides a private right of action for violations.
While the United States is the only developed country in the world that does not provide paid parental leave, San Francisco’s legislation is the first step in bringing the country up to speed with all other industrialized nations that have paid leave laws. San Francisco’s new ordinance is one of several recent pro-employee initiatives in the State of California, including recently signed legislation that will gradually increase the state minimum wage to $15.00 per hour by the year 2022 (by comparison, the Federal minimum wage rate is currently $7.25).
*On April 11, 2016, California Governor Jerry Brown signed into law a Bill, taking effect January 1, 2018, that will increase the amount of wage replacement benefits paid to employees under the PFLL from the current level of 55%, to 70% for low-income workers and to 60% for all other workers. Accordingly, San Francisco employers will be required to provide supplemental compensation at a lesser rate of 30%-40% in 2018.