Vedder Thinking | Articles California Corner: San Francisco Mandates First Employer-Funded Paid Parental Leave
On April 21, 2016, San Francisco Mayor Ed Lee signed a new ordinance making San Francisco the first municipality in the United States to require employers to provide fully paid leave for new mothers and fathers to bond with their newborn or newly adopted child. The law becomes effective January 1, 2017.
California's preexisting Paid Family Leave (PFL) law allows employees to receive 55 percent of their pay for up to six weeks through a state insurance program to bond with a new child. PFL is a partial wage replacement benefit provided by the state; it does not create leave rights for employees, nor does it confer reinstatement rights or job protection.
The new Paid Parental Leave Ordinance significantly increases the rights of new parents, guaranteeing them six weeks of fully paid leave, and requiring employers to make up the remaining 45 percent of a parent's full pay for the additional six weeks that isn't covered by PFL. While the PFL does not guarantee an employee the right to reinstatement upon his or her return from parental leave, the San Francisco measure ensures job protection and makes it illegal to retaliate against an employee for taking parental leave. The Ordinance tracks recent updates to unpaid leave legislation in California by imposing a rebuttable presumption of retaliation. Therefore, employers who deny employees paid leave may be subject to sanctions and penalties including restitution, liquidated damages and injunctive relief, and attorneys' fees, unless they can rebut the presumption of retaliation by clear and convincing evidence.
To be eligible for the new paid leave, employees must (1) have been employed at least 90 days prior to starting leave; (2) be eligible to receive PFL benefits; (3) work at least eight hours per week for the employer within the city of San Francisco; and (4) spend at least 40 percent of their total weekly work hours within the city of San Francisco. Part-time and temporary employees and employees of staffing agencies are expressly covered by the Ordinance. The employer may, in its discretion, apply up to two weeks of the employee's unused vacation leave toward the employee's supplemental compensation for parental leave.
Employers with 50 or more employees, regardless of the employees' location, are required to comply with the new law by January 1, 2017; employers with 35 to 49 employees must comply by July 1, 2017 and employers with 20 to 34 workers have until January 1, 2018. The Ordinance does not apply to federal, state or other municipal governments.
Employers that have employees in San Francisco should check their existing parental leave policies to ensure compliance with the Ordinance; and those that do not have any such leave policy should implement one by the applicable deadline. Given the national dialogue about paid leave, and the history of California legislation serving as a bellwether for trends in this arena, it is likely we will see similar referenda elsewhere on the horizon in the near future.
If you have any questions regarding the topics discussed in this article, please contact Heather M. Sager +1 (415) 749 9510, Ayse Kuzucuoglu at +1 (415) 749 9512, or any of our California Labor & Employment attorneys located in our San Francisco or Los Angeles offices.
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