Existing law prohibits an employer from refusing to allow a female employee disabled by pregnancy, childbirth, or a related medical condition to take a leave for a reasonable time of up to 4 months before returning to work. Existing law also prohibits an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes that leave, as specified.

This bill would prohibit an employer employer, as defined, from refusing, as specified, to allow an employee with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to 12 weeks of parental leave to bond with a new child within one year of the childs birth, adoption, or foster care placement. The bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

Existing law prohibits an employer from refusing to allow a female employee disabled by pregnancy, childbirth, or a related medical condition to take a leave for a reasonable time of up to 4 months before returning to work. Existing law also prohibits an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes that leave, as specified.

This bill would prohibit an employer from refusing, as specified, to allow an employee to take up to 12 weeks of parental leave to bond with a new child within one year of the childs birth, adoption, or foster care placement. The bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

Date of Hearing: June 22, 2016

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Roger Hernández, Chair

SBPCA Bill Id:SB 1166

Author:(Jackson) – As Amended Ver:April 21, 2016

SENATE VOTE: 22-14

SUBJECT: Unlawful employment practice: parental leave

SUMMARY: Enacts the "New Parent Leave Act" to, among other things, require an employer of 10 or more employees to allow eligible employees to take up to 12 weeks of job-protected parental leave to bond with a new child. Specifically, this bill:

1. Defines "employer" to mean either of the following:
   1. A person who directly employs 10 or more persons to perform services for a wage or salary.
   2. The state and any political subdivision of the state and cities.
2. Makes it an unlawful employment practice for an employer to refuse to allow an employee, with more than 12 months and at least 1,250 hours of service with the employer, to take up to 12 weeks of parental leave to bond with a new child within one year of the child's birth, adoption or foster care placement.
3. Requires the employer to provide a guarantee of employment in the same or comparable position upon return, as specified.
4. Provides that the employee may utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave.
5. Makes is an unlawful employment practice for an employer to refuse to maintain and pay for continued group health coverage for eligible employees who take parental leave ate the same level and under the same conditions that would have been provided of the employee had continued to work during the duration of the leave.
6. Provides that parental leave taken pursuant to this bill shall run concurrently with leave taken pursuant to the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), and that the aggregate amount of leave (or combination of leaves) shall not exceed 12 workweeks in a 12-month period.
7. Specifies that an employee is entitled to take Pregnancy Disability Leave, in addition to the leave provided in this bill, CFRA, and FMLA, if the employee is otherwise qualified for that leave.

EXISTING LAW:

1. Provides that the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), required to be taken concurrently, entitles eligible workers of employers with 50 or more employees to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family and medical reasons, including time to bond with a new child through birth, adoption or foster care placement, among others.
   2. Guaranteed reinstatement to the same or comparable position.
   3. Continued group health coverage during the duration of the leave under the same terms and conditions.
2. Establishes the Paid Family Leave (PFL) program, within the State Disability Insurance program, as a partial wage-replacement plan funded through employee payroll deductions. Among other things:
   1. PFL provides eligible employees with up to six weeks of wage replacement benefits (approximately 60 percent of lost wages) to care for a seriously ill child, spouse or registered domestic partner, parent, siblings, grandparents, grandchildren, and parents-in-laws or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.
   2. Employers may require that employees take up to two weeks of earned but unused vacation when using PFL. The law does not allow employers to require employees to use sick leave.
   3. PFL does not provide job protection or return to work rights.
   4. PFL does not require continued group health coverage during leave.
3. Establishes that Pregnancy Disability Leave (PDL), under the Fair Employment and Housing Act, requires private employers with five or more employees and public employers to provide up to four months of unpaid, job-protected leave for pregnancy, childbirth or related conditions.
   1. Employees may use accrued vacation and paid sick leave during PDL.
   2. Employees are entitled to reasonable accommodations and reinstatement to the job held before PDL began.
   3. Employers are required to continue health coverage during PDL.

FISCAL EFFECT: According to the Senate Appropriations Committee, the Department of Fair Employment and Housing indicates that it would incur General Fund costs of $248,000 in 2016-17, and $226,000 annually in the out years to implement the provisions of this bill.

COMMENTS: In 1980, California enacted the California Fair Employment and Housing Act (FEHA), which prohibited various employment discrimination practices, and included protections for employees taking pregnancy disability leave (PDL). (AB 3165, Fenton, Ch. 992, Stats. 1980.) PDL allows an employee to take a leave for a reasonable period of time, not to exceed four months, and thereafter return to work, as specified. The employee is entitled to utilize any accrued vacation leave during this period of time, which means that period during which the female employee is disabled on account of pregnancy, childbirth, or a related medical condition. (Gov. Code Sec. 12945.) PDL provides an employee the right to take “intermittent” leave for a pregnancy-related disability, as needed, which can be taken in small increments (hours, days, weeks, or months). For example, a pregnant employee, with the advice of her doctor, has the right to take a few hours of leave each day or on certain days because of severe morning sickness or for a doctor’s appointment, or for other prenatal care. An employee who is taking PDL is entitled to the continuation of her health benefits for the entire duration of her leave, up to four months.

Another protection under FEHA is the Moore-Brown-Roberti Family Rights Act (also known as the California Family Rights Act (CFRA)), which makes it an unlawful employment practice for an employer of 50 or more employees to refuse to grant a request by an employee to take an unpaid family care leave of up to four months unless a refusal is necessary to prevent undue hardship to the employer’s operation. (AB 77 (Moore, Ch. 462, Stats. 1991); SB 193 (Marks, Ch. 580, Stats. 1993).) Family care leave may be taken in one or more periods, as long as it does not exceed a total of four months within a 24 month period from the date the leave commenced. However, when family care leave is taken in conjunction with the maximum pregnancy disability leave, family care leave shall be for no more than one month. To be eligible for family care leave, an employee must have more than one year of continuous service with the employer and must be eligible for other employee benefits. The Department of Fair Employment and Housing enforces CFRA.

In 1993, the federal Family and Medical Leave Act (FMLA), enforced by the United States Department of Labor, was established and requires employers of 50 of more employees to provide unpaid leave of up to 12 weeks annually to employees for similar reasons. Additionally, the FMLA covers the medical condition of the employee, and permits leave for the placement of a child for foster care. Employers covered by the law are required to maintain any pre-existing health coverage during the leave period and, once the leave period is concluded, to reinstate the employee to the same or equivalent job. The federal law also specifies that the FMLA shall not supersede any provision of state or local law that provides greater family or medical leave rights. AB 1460 (Moore, Chapter 827, Statutes of 1993) conformed California’s employment discrimination laws under FEHA to the new requirements under the FMLA.

This bill would establish the New Parent Leave Act under FEHA and make it an unlawful employment practice for an employer, as defined, to refuse to allow an employee to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. This bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

Arguments in Support

According to the author:

"California falls behind Maine, Minnesota, Oregon, Washington State and the District of Columbia in providing job protected parental leave for small business employees. Under current law[,] only those who work for an employer of 50 or more are eligible for job protected parental leave under California law. That leaves many new parents with an impossible choice between the wellbeing of his or her new child and his or her family’s financial security.

While California’s worker funded Paid Family Leave [PFL] program provides employees with partial wage replacement while caring for a new child, many employees are unable to use this benefit for fear of losing their jobs. In fact, a 2011 field poll found that almost 2 out of 5 employees who were eligible to use PFL, but did not apply for the benefit, chose not to because they feared losing their job or other negative consequences at work.

[This bill] ensures that the California workers who have been paying into the Paid Family Leave insurance program are able to use this benefit for parental leave without risk of losing their job. No one should have to choose between the wellbeing of their new child and their family’s financial security."

The co-sponsors of this bill argue that although new birth mothers who work for a small employer (5-49 employees) are able to take 6-8 weeks of job protected leave to recover from the birth of their child under PDL, new birth fathers and new adoptive parents working for an employer of the same small size have no right to job protected leave when a new baby comes into their lives. Further, the co-sponsors contend that because of the eligibility requirements under these laws, nearly half of the workforce is not covered and employers can punish workers for taking time to care for a new child.

Supporters argue that this bill would drastically improve access to parental leave by providing job protection to more California workers. Supporters assert that this bill would ensure that millions of California workers who have been paying into the PDL insurance program are able to use this benefit for parental leave without risk of losing their job. The need for expanded and equitable access to parental leave in the state cannot be understated. Co-sponsors note that the benefits of parental leave on the health and welfare of the economy and our state’s working families have been well-documented. Research shows that paid family leave, particularly when there is job protection, increases new mothers’ wage growth and future employment rates. Fathers who take parental leave are more engaged with their newborns, promoting greater gender equity at home and at work. In addition, evidence strongly suggests that children enjoy many short- and long-term benefits from parental leave, including better health and higher high school graduation rates.

Arguments in Opposition

Opponents argue that the lack of conformity to the CFRA and FMLA could create an opportunity for an employee to obtain over 24 weeks of protected leave in one year.

Opponents note that last year, Governor Brown vetoed SB 406 (Jackson, 2015) based, in part, on the fact that the bill would “in certain circumstances, require employers to provide employees up to 24 weeks of family leave in a 12 month period. I am open to legislation to allow workers to take leave for additional family members that does not create this anomaly.” Opponents contend that this bill also creates that anomaly of 24-weeks of protected leave in a 12 month period.

Opponents note that while the bill attempts to address this issue by stating that the total amount of leave an employee can receive under this bill, CFRA, and FMLA is 12 weeks in a 12-month period, that this does not fix the situation. Opponents assert that California cannot preempt or limit the application of federal law under FMLA, and this bill appears to nullify any limitation on total leave taken as set forth in another section of the bill as it explicitly states an employee is entitled to take CFRA or FMLA leave, assuming the employee is qualified for that leave.

Opponents also assert that this bill exposes employers to costly litigation and cited to a study by an insurance provider that estimated the cost for a small to mid-size employer to defend and settle a single plaintiff discrimination claim was approximately $125,000. Opponents contend that this amount, especially for a small employer, reflects the financial risk associated with defending a lawsuit under FEHA, such as the litigation that would be created by this bill, and the ability to leverage an employer into resolving or settling the case regardless of merit.

REGISTERED SUPPORT / OPPOSITION:

Support

9 to 5

Alliance for Community Empowerment

American Association of University Women

American Civil Liberties Union of California

Breastfeed LA

California Asset Building Coalition

California Black Health Network

California Child Care Resource & Referral Network

California Commission on the Status of Women and Girls

California Domestic Workers Coalition

California Edge Coalition

California Employment Lawyers Association (co-sponsor)

California Hunger Action Coalition

California Immigrant Policy Center

California Labor Federation, AFL-CIO

California Latinas for Reproductive Justice

California Partnership

California Rural Legal Assistance Foundation

California Teachers Association

California Women’s Law Center

California Work and Family Coalition

Career Ladders Project

Center for Popular Democracy

Center for WorkLife Law at UC Hastings

Child Care Law Center

Children’s Hospital Los Angeles

Common Sense Kids Action

Consumer Attorneys of California

Courage Campaign

Employment Lawyers Association

Equal Rights Advocates (co-sponsor)

First 5 California

Healthy Communities, Inc.

Legal Aid Society – Employment Law Center (co-sponsor)

Los Angeles County Professional Peace Officers Association

Maternal and Child Health Access

Mexican American Legal Defense and Educational Fund

Mujeres Unidas y Activas

National Association of Social Workers, California Chapter

National Association of Working Women

National Council of Jewish Women California

Organization of SMUD Employees

Our Family Coalition

Parent Voices

Raising California Together

San Diego Court Employees Association

San Luis Obispo County Employees Association

Service Employees International Union

Stronger California Advocates Network

The Opportunity Institute

Tradeswomen, Inc.

UFCW Western State Council

Voices for Progress

Western Center on Law and Poverty

Women’s Foundation of California

3 individuals

Opposition

Agricultural Council of California

Associated Builders and Contractors of California

California Ambulance Association

California Association of Joint Powers Authorities

California Chamber of Commerce

California Civil Justice Association

California Farm Bureau Federation

California Hotel and Lodging Association

California Landscape Contractors Association

California League of Food Processors

California Manufacturers & Technology Association

California Professional Association of Specialty Contractors

California Restaurant Association

California Retailers Association

California State Association of Counties

Civil Justice Association of California

Culver City Chamber of Commerce

Greater Conejo Valley Chamber of Commerce

League of California Cities

National Federation of Independent Business

Southwest California Legislative Counsel

Western Carwash Association

Western Growers Association

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091

 THIRD READING  

Bill No: SB 1166

Author:

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-1, 4/13/16

AYES: Mendoza, Jackson, Leno, Mitchell

NOES: Stone

SENATE JUDICIARY COMMITTEE: 4-2, 4/19/16

AYES: Jackson, Leno, Monning, Wieckowski

NOES: Moorlach, Anderson

NO VOTE RECORDED: Hertzberg

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16

AYES: Lara, Beall, Hill, McGuire, Mendoza

NOES: Bates, Nielsen

SUBJECT:

SOURCE: California Employment Lawyers Association

Equal Rights Advocates

Legal Aid Society – Employment Law Center

DIGEST: This bill prohibits an employer, of 10 or more employees, from refusing to allow an eligible employee to take up to 12 weeks of job protected parental leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. This bill also prohibits an employer from refusing to maintain and pay for the employee’s continued group health coverage during the duration of the leave.

ANALYSIS:

Existing law:

1. Provides that the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), required to be taken concurrently, entitles eligible workers of employers with 50 or more employees to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family and medical reasons, including time to bond with a new child through birth, adoption or foster care placement, among others.
   2. Guaranteed reinstatement to the same or comparable position.
   3. Continued group health coverage during the duration of the leave under the same terms and conditions.
2. Establishes the Paid Family Leave (PFL) program, within the State Disability Insurance program, as a partial wage-replacement plan funded through employee payroll deductions. Among other things:
   1. PFL provides eligible employees with up to six weeks of wage replacement benefits (approximately 60 percent of lost wages) to care for a seriously ill child, spouse or registered domestic partner, parent, siblings, grandparents, grandchildren, and parents-in-laws or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.
   2. Employers may require that employees take up to two weeks of earned but unused vacation when using PFL. The law does not allow employers to require employees to use sick leave.
   3. PFL does not provide job protection or return to work rights.
   4. PFL does not require continued group health coverage during leave.
3. Establishes that Pregnancy Disability Leave (PDL), under the Fair Employment and Housing Act, requires private employers with five or more employees and public employers to provide up to four months of unpaid, job-protected leave for pregnancy, childbirth or related conditions.
   1. Employees may use accrued vacation and paid sick leave during PDL.
   2. Employees are entitled to reasonable accommodations and reinstatement to the job held before PDL began.
   3. Employers are required to continue health coverage during PDL.

This bill establishes a new parental leave right to bond with a new child either through birth, adoption or foster care placement. Specifically, this bill:

1. Prohibits an employer from refusing to allow an employee, with more than 12 months and at least 1,250 hours of service with the employer, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.
2. Defines “employer” as a person who directly employs 10 or more persons or the state and any political or civil subdivision of the state and cities.
3. Requires employers to provide a guarantee of employment in the same or comparable position upon return, as specified.
4. Provides that the employee can utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave.
5. Requires employers to pay for continued group health coverage for eligible employees who take parental leave at the same level and conditions.
6. Specifies that this leave shall run concurrent with CFRA and FMLA, as specified, and the aggregate amount of leave – or combination of leaves – cannot exceed 12 work weeks in a 12-month period.
7. Specifies that an employee is entitled to take Pregnancy Disability Leave, in addition to the leave provided in this bill, CFRA and FMLA, if he or she is otherwise qualified.

Background

California has several medical leaves under which an employee may be able to take time off of work to care for his or her illness, that of specified family members or for the bonding with a new child through birth, adoption or foster care. Below is a brief summary of some of the leaves and their eligibility requirements.

Parental Leave Policies in Other States. The United States is currently the only

developed country in the world that does not have any government sponsored paid

maternity or paternity leave law for employees to take time off to care for their

loved ones. Availability of such a leave is left at the discretion of each state and its

policies and employer practices. According to the U.S. Department of Labor, only

12 percent of private-sector workers have access to paid family leave through their

employers. Access is particularly low among low-wage workers, Hispanics and

African Americans. Many businesses have voluntarily adopted leave policies, a

trend most recently seen in corporate America with companies like Microsoft

offering up to 20 weeks of fully paid parental leave. [NOTE: Please see the policy

committee analysis for more information on leave policies in other states.]

San Francisco. The Paid Parental Leave for Bonding with New Child Ordinance was passed by the San Francisco Board of Supervisors and signed by Mayor Lee on April 21, 2016. The ordinance requires employers to help provide fully paid family leave for new parents. In conjunction with the PFL program, granting a 60% wage replacement for up to six weeks, the San Francisco ordinance would require businesses with more than 20 employees to plug that gap by paying the remaining 40% of their employees’ wages. The law takes effect January 1, 2017, with a gradual phase in for smaller businesses.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, the Department of Fair Employment and Housing indicates that it would incur General Fund costs of $248,000 in 2016-17, and $226,000 annually in the out years to implement the provisions of this bill.

SUPPORT: (Verified 5/27/16)

California Employment Lawyers Association (co-source)

Equal Rights Advocates (co-source)

Legal Aid Society – Employment Law Center (co-source)

Alliance for Community Empowerment

American Association of University Women

American Civil Liberties Union of California

Breastfeed LA

California Asset Building Coalition

California Black Health Network

California Child Care Resource & Referral Network

California Commission on the Status of Women and Girls

California Domestic Workers Coalition

California Edge Coalition

California Hunger Action Coalition

California Immigrant Policy Center

California Labor Federation, AFL-CIO

California Latinas for Reproductive Justice

California Partnership

California Rural Legal Assistance Foundation

California Teachers Association

California Women’s Law Center

California Work and Family Coalition

Career Ladders Project

Center for Popular Democracy

Center for WorkLife Law

Child Care Law Center

Children’s Hospital Los Angeles

Common Sense Kids Action

Consumer Attorneys of California

Courage Campaign

Employment Lawyers Association

Equal Rights Advocates

Healthy Communities, Inc.

Los Angeles County Professional Peace Officers Association

Maternal and Child Health Access

Mexican American Legal Defense and Educational Fund

Mujeres Unidas y Activas

National Association of Social Workers, California Chapter

National Association of Working Women

National Council of Jewish Women California

Organization of SMUD Employees

Our Family Coalition

Parent Voices

Raising California Together

San Diego Court Employees Association

San Luis Obispo County Employees Association

Service Employees International Union

Stronger California Advocates Network

The Opportunity Institute

Tradeswomen, Inc.

Voices for Progress

Western Center on Law and Poverty

Women’s Foundation of California

9 to 5

3 individuals

OPPOSITION: (Verified 5/27/16)

Agricultural Council of California

Associated Builders and Contractors of California

California Ambulance Association

California Association of Joint Powers Authorities

California Chamber of Commerce

California Farm Bureau Federation

California Hotel and Lodging Association

California Landscape Contractors Association

California League of Food Processors

California Manufacturers & Technology Association

California Professional Association of Specialty Contractors

California Restaurant Association

California Retailers Association

California State Association of Counties

Civil Justice Association of California

Greater Conejo Valley Chamber of Commerce

League of California Cities

National Federation of Independent Business

Western Carwash Association

Western Growers Association

ARGUMENTS IN SUPPORT: Proponents argue that while California is one of only four states to offer paid family leave for new parents, it remains impossibly out of reach for most low-wage earners and those who work for small employers. They believe that this bill will drastically improve access to parental leave by addressing one of its biggest barriers — job protection. According to the author, a field poll found that almost two out of five employees who were eligible to use PFL, but did not apply, chose not to because they feared losing their job or other negative consequences at work.

Proponents further argue that the existing CFRA and FMLA only cover employees who work for larger companies with 50 or more employees, leaving over 40% of California’s workforce ineligible for job protected leave because their employer is too small. This bill ensures that workers who have been paying into the PFL program are able to use this benefit without fear of losing their job.

ARGUMENTS IN OPPOSITION: Opponents argue that this bill will overwhelm small businesses with as few as 10 employees by requiring them to provide 12-weeks of protected parental leave, with the threat of costly litigation for violations. They argue that while small employers must provide their employees with PDL, they are not subject to FMLA or CFRA because large employers are the ones likely capable of accommodating such an absence.

Further, they argue that this bill creates a new, separate and independent leave than that of CFRA and FMLA. To the extent that it is interpreted through case law or regulation differently, that lack of conformity could create the opportunity for two 12-week leave of absences for employers with 50 or more employees. While the bill tries to address this issue, they argue that the problem remains because California cannot preempt or limit the application of federal law under FMLA.

Opponents also argue that this bill labels an employer’s failure to provide the 12-week leave as an “unfair employment practice,” a label that exposes an employer to costly litigation. An aggrieved employee could pursue a claim against the employer seeking: compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees. According to opponents, it costs a small to mid-size employer approximately $125,000 to defend and settle a single claim – a cost they believe reflects the financial risk small employers face.

Prepared by:

5/28/16 16:46:00

**** END ****

SENATE COMMITTEE ON

Senator , Chair

Session

() -

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 1166 would (1) establish the New Parent Leave Act, making it an unlawful employment practice for specified employers to refuse to allow specified employees to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement, and (2) prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

Fiscal Impact:

The Department of Fair Employment and Housing (DFEH) indicates that it would incur General Fund costs of $248,000 in 2016-17, and $226,000 annually in the out years to implement the provisions of the bill.

Background:

In 1980, California enacted the California Fair Employment and Housing Act (FEHA), which (1) prohibits various employment discrimination practices, and (2) includes protections for employees taking pregnancy disability leave (PDL). PDL allows an employee to take a leave for a reasonable period of time, not to exceed four months, and thereafter return to work, as specified. The employee is entitled to utilize any accrued vacation leave during this period of time, which means that period during which the female employee is disabled on account of pregnancy, childbirth, or a related medical condition. PDL provides an employee the right to take “intermittent” leave for a pregnancy-related disability, as needed, which can be taken in small increments (hours, days, weeks, or months). For example, a pregnant employee, with the advice of her doctor, has the right to take a few hours of leave each day or on certain days because of severe morning sickness or for a doctor’s appointment, or for other prenatal care. An employee who is taking PDL is entitled to the continuation of her health benefits for the entire duration of her leave, up to four months.

Additionally, under FEHA is the California Family Rights Act (CFRA, enforced by DFEH), which makes it an unlawful employment practice for an employer of 50 or more employees to refuse to grant a request by an employee to take an unpaid family care leave of up to four months unless a refusal is necessary to prevent undue hardship to the employer’s operation. Family care leave may be taken in one or more periods, as long as it does not exceed a total of four months within a 24 month period from the date the leave commenced. However, when family care leave is taken in conjunction with the maximum pregnancy disability leave, family care leave shall be for no more than one month. To be eligible for family care leave, an employee must have more than one year of continuous service with the employer and must be eligible for other employee benefits.

In 1993, the federal Family and Medical Leave Act (FMLA), enforced by the United States Department of Labor, was . It requires employers of 50 of more employees to provide unpaid leave of up to 12 weeks annually to employees for similar reasons. Additionally, FMLA covers the medical condition of the employee, and permits leave for the placement of a child for foster care. Employers covered by the law are required to maintain any pre-existing health coverage during the leave period and, once the leave period is concluded, to reinstate the employee to the same or equivalent job. The federal law also specifies that FMLA shall not supersede any provision of State or local law that provides greater family or medical leave rights. AB 1460 (Moore, Chapter 827, Statutes of 1993) conformed California’s employment discrimination laws under FEHA to the new requirements under the FMLA.

Proposed Law:

This bill would, among other things, do the following:

• Establish the New Parent Leave Act and make it an unlawful employment practice under FEHA for an employer, as defined, to do either of the following:
  • Refuse to allow an employee, with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, upon request, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement, and provide:
    • if, on or before the commencement of this parental leave, the employer does not provide a guarantee of employment in the same or a comparable position upon the termination of the leave, the employer would be deemed to have refused to allow the leave; and
    • the employee would be entitled to utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave; and
  • Refuse to maintain and pay for coverage for an eligible employee who takes parental leave pursuant to this section under a group health plan, as defined, for the duration of the leave, not to exceed 12 weeks over the course of a 12-month period, commencing on the date that the parental leave commences, at the level and under the conditions that coverage would have been provided if the employee had continued to work in his or her position for the duration of the leave.
• Define “employer” to mean either: (1) any person who directly employs 10 or more persons to perform services for a wage or salary, or (2) the State, and any political or civil subdivision of the state and cities.
• Require that parental leave run concurrently with leave taken pursuant to CFRA and the FMLA, except for leave taken for a disability on account of pregnancy, childbirth, or related medical condition.
• Specify that the aggregate amount of leave taken pursuant to this bill, CFRA, or the FMLA, or any combination of these laws, except for leave taken for a disability on account of pregnancy, childbirth, or related medical conditions, shall not exceed 12 workweeks in a 12 month period.
• Entitle an employee to take, in addition to leave provided pursuant to this bill, CFRA, and the FMLA, leave provided pursuant to PDL if the employee is otherwise qualified for that leave.

Related Legislation:

SB 406 (Jackson, 2015) would have expanded various provisions of law related to unpaid family and medical leave under the California Family Rights Act (CFRA). The bill was vetoed by the Governor.

Staff Comments:

DFEH anticipates that the bill would generate about 400 additional complaints per year, requiring three new positions (investigators) at a cost of $248,000 in 2016‐17, and $226,000 annually in the out-years. DFEH would not receive any additional federal funds for this work because its work share agreement with the Equal Employment Opportunity Commission excludes CFRA complaints (to which this bill pertains) and anything else not covered by the Civil Rights Act of 1964.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: SB 1166 (Author:Jackson)

Version: February 18, 2016

Hearing Date: April 19, 2016

Fiscal: Yes

Urgency: No

Consultant: TMW

SUBJECT

Unlawful employment practice: parental leave

DESCRIPTION

This bill would establish the New Parent Leave Act and make it an unlawful employment practice for an employer, who employs 10 or more employees, to refuse to allow an employee, with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. This bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

(This analysis reflects author’s amendments to be offered in Committee.)

BACKGROUND

In 1980, California enacted the California Fair Employment and Housing Act (FEHA), which prohibited various employment discrimination practices, and included protections for employees taking pregnancy disability leave (PDL). (AB 3165, Fenton, Ch. 992, Stats. 1980.) PDL allows an employee to take a leave for a reasonable period of time, not to exceed four months, and thereafter return to work, as specified. The employee is entitled to utilize any accrued vacation leave during this period of time, which means that period during which the female employee is disabled on account of pregnancy, childbirth, or a related medical condition. (Gov. Code Sec. 12945.) PDL provides an employee the right to take “intermittent” leave for a pregnancy-related disability, as needed, which can be taken in small increments (hours, days, weeks, or months). For example, a pregnant employee, with the advice of her doctor, has the right to take a few hours of leave each day or on certain days because of severe morning sickness or for a doctor’s appointment, or for other prenatal care. An employee who is taking PDL is entitled to the continuation of her health benefits for the entire duration of her leave, up to four months.

Another protection under FEHA is the Moore-Brown-Roberti Family Rights Act (also known as the California Family Rights Act (CFRA)), which makes it an unlawful employment practice for an employer of 50 or more employees to refuse to grant a request by an employee to take an unpaid family care leave of up to four months unless a refusal is necessary to prevent undue hardship to the employer’s operation. (AB 77 (Moore, Ch. 462, Stats. 1991); SB 193 (Marks, Ch. 580, Stats. 1993).) Family care leave may be taken in one or more periods, as long as it does not exceed a total of four months within a 24 month period from the date the leave commenced. However, when family care leave is taken in conjunction with the maximum pregnancy disability leave, family care leave shall be for no more than one month. To be eligible for family care leave, an employee must have more than one year of continuous service with the employer and must be eligible for other employee benefits. The Department of Fair Employment and Housing enforces CFRA.

In 1993, the federal Family and Medical Leave Act (FMLA), enforced by the United States Department of Labor, was established and requires employers of 50 of more employees to provide unpaid leave of up to 12 weeks annually to employees for similar reasons. Additionally, the FMLA covers the medical condition of the employee, and permits leave for the placement of a child for foster care. Employers covered by the law are required to maintain any pre-existing health coverage during the leave period and, once the leave period is concluded, to reinstate the employee to the same or equivalent job. The federal law also specifies that the FMLA shall not supersede any provision of State or local law that provides greater family or medical leave rights. AB 1460 (Moore, Chapter 827, Statutes of 1993) conformed California’s employment discrimination laws under FEHA to the new requirements under the FMLA.

This bill would establish the New Parent Leave Act under FEHA and make it an unlawful employment practice for an employer, as defined, to refuse to allow an employee to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. This bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

This bill was heard by the Senate Labor and Industrial Relations Committee on April 13, 2016, and passed out on a vote of 4-1.

CHANGES TO EXISTING LAW

Existing law, the federal Pregnancy Discrimination Act (PDA), generally prohibits discrimination in employment on the basis of pregnancy, childbirth, or related medical conditions. (42 U.S.C. 2000e-2; 42 U.S.C. 2000e(k).)

Existing law, the federal Family and Medical Leave Act (FMLA), prohibits employers with at least 50 employees from failing to maintain and pay for group health plan coverage, as specified, for leave taken by the employee for the birth of a child for a period of up to 12 workweeks. An employer may recover the group health plan premium from the employee in the event the employee fails to return from leave, as specified, and the failure to return from leave is not a result of a pregnancy or child birth related condition or other circumstances beyond the control of the employee. (29 U.S.C. Sec. 2614(c).)

Existing law, the Fair Employment and Housing Act (FEHA), generally prohibits discrimination in employment on the basis of pregnancy, childbirth, or related medical conditions. (Gov. Code Sec. 12940.) Unless otherwise specified, FEHA applies to employers with five or more employees. (Gov. Code Sec. 12926(d).)

Existing law, the pregnancy disability leave law (PDL), generally prohibits employers with at least five employees from refusing to allow female employees to take a leave of absence due to a pregnancy, childbirth, or related medical condition not to exceed four months. (Gov. Code Sec. 12945.)

Existing law, the Moore-Brown-Roberti Family Rights Act (the California Family Rights Act (CFRA)) prohibits employers with at least 50 employees from failing to maintain and pay for group health plan coverage, as specified, for leave taken by the employee for the birth of a child for a period of up to 12 workweeks. An employer may recover the group health plan premium from the employee in the event the employee fails to return from leave, as specified, and the failure to return from leave is not a result of a pregnancy or child birth related condition or other circumstances beyond the control of the employee. (Gov. Code Sec. 12945.2(f).)

This bill would establish the New Parent Leave Act and make it an unlawful employment practice under FEHA for an employer, as defined, to do either of the following:

• refuse to allow an employee, with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, upon request, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement, and provide:
  • if, on or before the commencement of this parental leave, the employer does not provide a guarantee of employment in the same or a comparable position upon the termination of the leave, the employer would be deemed to have refused to allow the leave; and
  • the employee would be entitled to utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave; and
• refuse to maintain and pay for coverage for an eligible employee who takes parental leave pursuant to this section under a group health plan, as defined, for the duration of the leave, not to exceed 12 weeks over the course of a 12-month period, commencing on the date that the parental leave commences, at the level and under the conditions that coverage would have been provided if the employee had continued to work in his or her position for the duration of the leave.

This bill would define “employer” to mean either: (1) any person who directly employs 10 or more persons to perform services for a wage or salary; or (2) the state, and any political or civil subdivision of the state and cities.

This bill would require that parental leave to run concurrently with leave taken pursuant to CFRA and the FMLA, except for leave taken for a disability on account of pregnancy, childbirth, or related medical condition.

This bill would specify that the aggregate amount of leave taken pursuant to this bill, CFRA, or the FMLA, or any combination of these laws, except for leave taken for a disability on account of pregnancy, childbirth, or related medical conditions, shall not exceed 12 workweeks in a 12 month period.

This bill would entitle an employee to take, in addition to leave provided pursuant to this bill, CFRA, and the FMLA, leave provided pursuant to PDL if the employee is otherwise qualified for that leave.

COMMENT

1. Stated need for the bill

The author writes:

California falls behind Maine, Minnesota, Oregon, Washington State and the District of Columbia in providing job protected parental leave for small business employees. Under current law[,] only those who work for an employer of 50 or more are eligible for job protected parental leave under California law. That leaves many new parents with an impossible choice between the wellbeing of his or her new child and his or her family’s financial security.

While California’s worker funded Paid Family Leave program provides employees with partial wage replacement while caring for a new child, many employees are unable to use this benefit for fear of losing their jobs. In fact, a 2011 field poll found that almost 2 out of 5 employees who were eligible to use PFL, but did not apply for the benefit, chose not to because they feared losing their job or other negative consequences at work.

SB 1166 (Jackson) ensures that the California workers who have been paying into the Paid Family Leave insurance program are able to use this benefit for parental leave without risk of losing their job. No one should have to choose between the wellbeing of their new child and their family’s financial security.

2. Providing new job protected parental leave

This bill would establish new FEHA protections under the New Parent Leave Act (NPLA) and make it an unlawful employment practice for an employer of 10 more employees to refuse to allow an employee to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Additionally, this bill would provide that:

• if, on or before the commencement of this parental leave, the employer does not provide a guarantee of employment in the same or a comparable position upon the termination of the leave, the employer would be deemed to have refused to allow the leave; and
• the employee would be entitled to utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave.

Notably, for an employee to qualify for this leave of absence, he or she must have worked for the employer for more than 12 months and have at least 1,250 hours of service with the employer during the previous 12-month period, which is the same requirement as a leave of absence taken under CFRA.

Co-sponsors argue that although new birth mothers who work for a small employer (5-49 employees) are able to take 6-8 weeks of job protected leave to recover from the birth of their child under PDL, new birth fathers and new adoptive parents working for an employer of the same small size have no right to job protected leave when a new baby comes into their lives. Further, co-sponsors contend that because of the eligibility requirements under these laws, nearly half of the workforce is not covered and employers can punish workers for taking time to care for a new child.

Supporters argue that this bill would drastically improve access to parental leave by providing job protection to more California workers. Supporters assert that this bill would ensure that millions of California workers who have been paying into the PDL insurance program are able to use this benefit for parental leave without risk of losing their job. The need for expanded and equitable access to parental leave in the state cannot be understated. Co-sponsors note that the benefits of parental leave on the health and welfare of the economy and our state’s working families have been well-documented. Research shows that paid family leave, particularly when there is job protection, increases new mothers’ wage growth and future employment rates. (Council of Economic Advisors, The Economics of Paid and Unpaid Leave (June 2014) <https://www.whitehouse.gov/sites/default/files/docs/leave_report_final.pdf> [as of Apr. 10, 2016].) Fathers who take parental leave are more engaged with their newborns, promoting greater gender equity at home and at work. (Michelle J. Budig, The Fatherhood Bonus and the Motherhood Penalty: Parenthood and the Gender Gap in Pay <www.thirdway.org/report/the-fatherhood-bonus-and-the-motherhood-penalty-parenthood-and-the-gender-gap-in-pay> [as of Apr. 10, 2016].) In addition, evidence strongly suggests that children enjoy many short- and long-term benefits from parental leave, including better health and higher high school graduation rates. (Sakiko Tanaka, The Economic Journal Volume 115, Parental leave and child health across OECD countries (June 2005) <onlinelibrary.wiley.com/doi/10.1111/j.0013-0133.2005.00970.x/abstract> [as of Apr. 10, 2016]; Pedro Carneiro, Katrine V. Løken and Kjell G. Salvanes, Journal of Political Economy, Vol. 123, No. 2 A Flying Start? Maternity Leave Benefits and Long-Run Outcomes of Children (Apr. 2015). <www.jstor.org/stable/10.1086/679627?seq=1#page_ scan_tab_contents> [as of Apr. 10, 2016].)

3. Requiring employer-paid health insurance coverage for parental bonding

Existing federal and state law, the FMLA and CFRA, respectively, require group health insurance to be maintained by an employer for an employee on a leave of absence to care for or bond with a newly born, foster, or adopted child. The FMLA applies to all public agencies, including local, state, and federal employers, local education agencies (schools), and private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year. The general definition of employer under FEHA means an employer with five or more employees. (Gov. Code Sec. 12926(d).) However, CFRA, which is included under FEHA, specifically applies to private employers with 50 or more part-time or full-time employees, including non-profit religious organizations. Covered employers also include the State of California and any of its political and civil subdivisions, and cities and counties, regardless of the number of employees.

This bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes leave under the NPLA. This bill would apply to a private employer who is employing 10 or more employees, as well as the state and local agency employers covered under CFRA. This bill would limit the duration of the required coverage to 12 weeks over the course of a 12-month period, commencing on the date that the parental leave commences, at the level and under the conditions that coverage would have been provided if the employee had continued to work in his or her position for the duration of the leave.

Arguably, a lack of medical coverage during parental bonding leave discourages and prevents new parents from taking leave to bond with their new children. Accordingly, both the FMLA and CFRA require group health plan coverage to continue during that family bonding leave. However, for employees of employers with less than 50 employees, they are left to make the difficult decision of whether they can afford to go without health coverage during the parental leave or whether they will have to sacrifice parental bonding to maintain their health coverage. This bill would provide the same group health insurance coverage required under CFRA and FMLA, but extend the required coverage to employees of small employers while the employee is on new parent bonding leave.

4. Oppositions’ concerns

Opponents of the bill contend that it will overwhelm small businesses with as few as five employees by allowing an employee who has only worked for the employer one day to receive 12 weeks of protected parental leave, with the threat of costly litigation for violating this leave. Opponents note that small employers with only five employees were specifically excluded from FMLA and CFRA; these protected leaves of absence only apply to employers with 50 or more employees because only large employers are the only ones likely capable of accommodating such an extensive amount of time off (up to 28 weeks/7 months). Notably, the author’s amendments agreed to in the Senate Labor and Industrial Relations Committee make the bill applicable to an employer of 10 or more employees.

Opponents also contend that because this bill does not impose the requirements under CFRA and FMLA that an employee work for one year and at least 1,250 hours before taking a 12-week protected leave of absence. Rather, this bill would make an employer with only five employees, or an employer with 500 employees, automatically have to provide an employee with a 12-week leave of absence, no matter the limited hours or the time worked for the employer, which is simply too significant for California employers to manage.

Opponents also argue that the lack of conformity to the CFRA and FMLA one year and 1,250 hours worked requirements could create an opportunity for an employee to obtain over 24 weeks of protected leave in one year. Opponents provide the example that an employee who has only worked 800 hours could take the 12 weeks of leave under this bill, return to work for another 450 hours, and then take another 12 weeks of leave under CFRA and FMLA. However, the author’s amendments would mirror the CFRA work requirements, which should resolve this concern.

Opponents note that last year, Governor Brown vetoed SB 406 (Jackson, 2015) based, in part, on the fact that the bill would “in certain circumstances, require employers to provide employees up to 24 weeks of family leave in a 12 month period. I am open to legislation to allow workers to take leave for additional family members that does not create this anomaly.” Opponents contend that this bill also creates that anomaly of 24-weeks of protected leave in a 12 month period.

Opponents note that while the bill attempts to address this issue by stating that the total amount of leave an employee can receive under this bill, CFRA, and FMLA is 12 weeks in a 12-month period, opponents argue that this does not fix the situation. Opponents assert that California cannot preempt or limit the application of federal law under FMLA, and this bill appears to nullify any limitation on total leave taken as set forth in another section of the bill as it explicitly states an employee is entitled to take CFRA or FMLA leave, assuming the employee is qualified for that leave.

Opponents also argue that this bill is an unprecedented mandate; they were unable to identify any other state that imposes such an extensive leave of absence on employers with only five employees who have worked only one day for the employer. Opponents point to a 2013 study for the National Conference of State Legislatures, which reported that over 40 states impose only a 12-week leave of absence on employers with 50 or more employees with the same hours worked requirement as FMLA and CFRA. Opponents note that of the remaining states that differ, all have an employee size threshold or hours worked requirement, or both, that is significantly higher than proposed under this bill.

Opponents also assert that this bill exposes employers to costly litigation and cited to a study by an insurance provider that estimated the cost for a small to mid-size employer to defend and settle a single plaintiff discrimination claim was approximately $125,000. Opponents contend that this amount, especially for a small employer, reflects the financial risk associated with defending a lawsuit under FEHA, such as the litigation that would be created by this bill, and the ability to leverage an employer into resolving or settling the case regardless of merit.

5. Author’s amendments

This bill was approved by the Senate Labor and Industrial Relations Committee on April 13, 2016. Due to procedural timing constraints, the author agreed in that Committee to take the following amendments in this Committee.

Author’s amendments:

1. On page 2, in line 2, after “employer” insert “, as defined in subdivision (d), ”
2. On page 2, in line 3, after “employee,” insert “with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period,”
3. On page 2, below line 37, insert:

(d) “Employer” means either of the following:

(1) Any person who directly employs 10 or more persons to perform services for a wage or salary.

(2) The state, and any political or civil subdivision of the state and cities.

Support: 9 to 5; Alliance for Community Empowerment; American Association of University Women; American Civil Liberties Union of California; BreastfeedLA; California Asset Building Coalition; California Black Health Network; California Domestic Workers Coalition; California Hunger Action Coalition; California Labor Federation, AFL-CIO; California Latinas for Reproductive Justice; California Immigrant Policy Center; California Women’s Law Center; California Work and Family Coalition; Career Ladders Project; Center for Popular Democracy; Center for WorkLife Law, UC Hastings; Child Care Law Center; Children’s Hospital Los Angeles; First 5 Santa Clara County; Healthy Communities, Inc.; Mujeres Unidas y Activas; National Association of Social Workers – California Chapter; National Council of Jewish Women (CA Edge Coalition); Parent Voices; Raising California Together; Stronger California Advocates Network; The Opportunity Institute; Tradeswomen, Inc.; Voices for Progress; Western Center on Law and Poverty; Women’s Foundation of California; 2 Individuals

Opposition: Agricultural Council of California; Associated Builders and Contractors of California; California Ambulance Association; California Association of Joint Powers Authorities; California Chamber of Commerce; California Farm Bureau Federation; California Hotel and Lodging Association; California League of Food Processors; California Manufacturers & Technology Association; California Professional Association of Specialty Contractors; California Restaurant Association; California Retailers Association; California State Association of Counties; Civil Justice Association of California; National Federation of Independent Business; Western Carwash Association; Western Growers Association

HISTORY

Source: California Employment Lawyers Association; Equal Rights Advocates; Legal Aid Society – Employment Law Center

Related Pending Legislation: None Known

Prior Legislation:

SB 406 (Jackson, 2015) would have expanded various provisions of law related to unpaid family and medical leave under the California Family Rights Act (CFRA). SB 406 was vetoed by Governor Brown because he believed the expansion provided in the bill created a disparity between California's law and the FMLA, and, in certain circumstances, could require employers to provide employees up to 24 weeks of family leave in a 12 month period.

SB 299 (Evans, Chapter 510, Statutes of 2011) prohibited employers from refusing to maintain and pay for insurance coverage, as specified, for the duration of maternity leave up to four months, as specified, and authorized employers to recover insurance premiums from the employee if the employee fails to return from maternity leave, provided that the employee’s failure to return from maternity leave is not due to leave taken under CFRA, for a health condition that entitles the employee leave, or for another circumstance beyond the control of the employee.

AB 592 (Lara, 2011) prohibited employers from interfering with or restraining an employee’s exercise of pregnancy disability leave or rights under PDL or CFRA.

AB 1460 (Moore, Chapter 827, Statutes of 1993) See Background.

SB 193 (Marks, Chapter 580, Statutes of 1993) See Background.

AB 77 (Moore, Chapter 462, Statutes of 1991) See Background.

AB 3165 (Fenton, Chapter 992, Statutes of 1980) See Background.

Prior Vote: Senate Committee on Labor and Industrial Relations (Ayes 4, Noes 1)

**************

SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Tony Mendoza, Chair

2015 - 2016 Regular

Bill No: SB 1166 Hearing Date: April 13, 2016

Subject: Unlawful employment practice: parental leave

KEY ISSUES

Should the Legislature establish a parental leave policy requirement for businesses of five or more employees that allows workers to take up to 12 weeks of unpaid leave to bond with a new child within one year of the child’s birth, adoption or foster care placement?

Should this parental leave policy include a guarantee of employment upon the employee’s return?

Should employers be required to pay for continued group health coverage during the duration of the employee’s parental leave?

ANALYSIS

Existing law:

1. The California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), required to be taken concurrently, entitles eligible employees of covered employers (employers with 50 or more employees) to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family and medical reasons, including that of bonding with a newborn, child adoption or foster care placement, among others.
   2. Guaranteed reinstatement to the same or comparable position upon the return of the employee from his/her leave.
   3. Continued group health coverage during the duration of the leave under the same terms and conditions as if the employee had not taken the leave.

(Government Code §12945.2)

1. Establishes the State Disability Insurance (SDI) program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the Disability Insurance and Paid Family Leave programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child.
   1. The Paid Family Leave program (PFL):
      • Provides eligible employees (those paying into SDI) with up to 6 weeks of wage replacement benefits to care for a seriously ill child, spouse or registered domestic partner, parent, siblings, grandparents, grandchildren, and parents-in-laws or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.

(Unemployment Insurance Code §3301)

• • • Provides wage replacement equal to one-seventh of the employee’s weekly benefit amount for each full day during which he or she is unable to work (a wage replacement of approximately 55 percent of lost wages).
    • Employers may require that employees take up to two weeks of earned but unused vacation when using PFL. The law does not allow employers to require employees to use sick leave.
  1. SDI does not provide job protection or return to work rights.
  2. SDI does not require continued group health coverage during the leave.

1. Pregnancy Disability Leave (PDL), under the Fair Employment and Housing Act, requires private employers with five or more employees and public employers to provide up to four months of unpaid, job-protected leave for pregnancy, childbirth or related conditions.
   1. Employees may use accrued vacation and paid sick leave during PDL.
   2. Employees are entitled to reasonable accommodations and reinstatement to the job held before PDL began.
   3. Employers are required to continue the employee’s health coverage during PDL.
   4. Prohibits employers from refusing to allow an eligible employee to take PDL leave and thereafter return to work.

(Government Code §12945)

This Bill would establish a new parental leave right of specified employees to bond with a new child either through birth, adoption or foster care placement.

Specifically, the bill would:

1. Prohibit an employer of five or more employees from refusing to allow an employee, upon request, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.
2. Require the employer to provide a guarantee of employment in the same or comparable position upon return, or otherwise be deemed to have refused to allow the leave.
3. Provide that the employee can utilize accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the period of parental leave.
4. Require the employer to pay for continued group health coverage for an eligible employee who takes parental leave for the duration of the leave at the level and under the conditions that coverage would have been provided had the employee continued to work.
5. Specify that this parental leave shall run concurrently with CFRA and FMLA, except for leave taken for a disability on account of pregnancy, childbirth, or related medical condition (PDL), and the aggregate amount of leave – or combination of leaves – cannot exceed 12 work weeks in a 12 month period.
6. Specify that an employee is entitled to take Pregnancy Disability Leave, in addition to the leave provided in this bill, CFRA and FMLA, if he or she is otherwise qualified.

COMMENTS

1. Background on California Medical Leaves:

California has several medical leaves under which an employee may be able to take time off of work to care for his or her illness, that of specified family members or for the bonding with a new child through birth, adoption or foster care. However, each medical leave is unique and may or may not be available to all employees. Below is a brief summary of some of the leaves and their eligibility requirements.

2. Need for this bill?

As described above, California employees may be entitled to several medical leaves depending on the size of their employer and the reason for the leave. While CFRA and FMLA provide for up to 12 weeks per year of unpaid job protected leave for an employee who takes time for bonding or care, these protections are only available to employees of businesses with 50 or more workers. Employees of smaller businesses are entitled to take Paid Family Leave and receive a partial wage replacement; however, PFL does not offer any job protection which limits a worker’s financial ability to take the leave.

Studies have shown that paid family leave policies have positive impacts on infant and maternal health, as well being associated with greater labor force attachment and long-term productivity. A 2014 White House report by the Council of Economic Advisers, titled “The Economics of Paid and Unpaid Leave”, reported the following:

“Paid leave policies can help business recruit talented workers who plan to stay with a firm after having children. In a survey of two hundred human resource managers, two-thirds cited family-supportive policies, including flexible schedules, as the single most important factor in attracting and retaining employees. Paid leave has been shown to increase the probability that women continue in their job after having a child, rather than quitting permanently, saving employers the expense of recruiting and training additional employees. A review of 27 separate case studies found that the median cost of replacing an employee was 21 percent of that employee’s annual salary – a substantial cost that can be reduced with family-friendly leave policies.”

Although California’s Paid Family Leave program is available to all employees paying into the fund, the reality is that without a guarantee of a job upon their return, most employees do not take advantage of the program. A report from the Senate Office of Research entitled California’s Paid Family Leave Program found that bonding leave claims ranged from no claims to 10.2 claims per 1,000 people by county since the program started. Additionally, since 2009, the proportions of bonding claims filed were as follows: 94.3% were to bond with a new biological child; bonding with adopted and foster children made up less than 1% each (.35 percent and .31 percent, respectively). Lastly, since 2004, the average bonding leave taken by women is 5.17 weeks, while the average taken by men has been 3.81 weeks.

The author and proponents believe this bill is needed to ensure that no worker has to choose between the wellbeing of their new child and their family’s financial security. This bill would establish a new parental leave right for employees to bond with a new child either through birth, adoption or foster care placement with the protection of a job upon his/her return and a guarantee of continued group health coverage during the duration of the leave. The existing PFL program provides leave for this purpose, but it is not job protected and does not require continued health coverage. The author believes that these protections are necessary to encourage people to take the time necessary to bond with their new family members.

3. Parental Leave Policies in Other States:

The United States is currently the only developed country in the world that does not have any government sponsored paid maternity or paternity leave law under which employees could take time off to care for their loved ones. Availability of such a leave is left at the discretion of each state and its policies and employer practices. According to the U.S. Department of Labor, only 12 percent of private-sector workers have access to paid family leave through their employers. Additionally, access is particularly low among low-wage workers, Hispanics and African Americans. Many businesses have voluntarily adopted leave policies, a trend most recently seen in corporate America with companies like Microsoft offering up to 20 weeks of fully paid parental leave.

The topic of paid family leave has also been a top priority for the Obama administration, most recently in 2015, the United States Secretary of Labor Tom Perez announced that the Department of Labor Women’s Bureau was awarding $1.55 million in grants to research and analyze how paid family and medical leave programs can be developed and implemented across the country. According to Secretary Perez, “passage of a national paid family and medical leave law is not a question of if, but when. But as is so often the case on important public policy issues, we need states and localities to be the incubators of innovation. It’s their efforts, which we’re funding today, that will pave the way for national reform. These grants will get us closer to a future where working moms and dads can focus on what really matters: time with their families.”

Many States have taken action to address this need by enacting statewide leave policies. Below is a summary of efforts throughout the country.

Paid Leaves

Several states have mandated paid family leave programs including California, New Jersey, Rhode Island and most recently New York. When fully phased in, New York’s paid family leave program will provide the highest number of paid time off between all states – 12 weeks – to help meet the employee’s family needs. Benefits will be phased-in beginning in 2018 at 50 percent of an employee’s average weekly wage, and fully implemented in 2021 at 67 percent of their average weekly wage. This program will be job protected and funded by employees who will be eligible to participate after having worked for their employer for six months. California and New Jersey both cover up to 6 weeks of leave time, while Rhode Island only covers 4 weeks.

Unpaid Leaves

In terms of unpaid family leave rights, the following chart outlines information gathered by the National Conference of State Legislatures and offers a good summary of how California compares to other states.

San Francisco – Parental Leave

On April 5, 2016, the San Francisco Board of Supervisors voted unanimously to approve a measure (File# 160065) that would require employers to help provide fully paid family leave for new parents. In conjunction with California’s existing Paid Family Leave program, granting a 55% wage replacement for up to six weeks, the SF ordinance would require businesses with more than 20 employees to plug that gap by paying the remaining 45% of their employees’ wages. The law, when signed, will take effect January 1, 2017 with a gradual phase in for smaller businesses. Businesses with 35+ employees would be required to comply by July 1, 2017.  Businesses with 20+ employees would have until January 2018. The measure requires another formal vote by the board as well as approval by the Mayor.

4. Double Referral:

This bill has been double referred and, if approved by this committee, it will be sent to the Senate Judiciary Committee for a hearing.

5. Proponent Arguments:

Proponents argue that while California is one of only four states to offer paid family leave for new parents, it remains impossibly out of reach for most low-wage earners and those who work for small employers. They believe that this bill would drastically improve access to parental leave for all workers by addressing one of its biggest barriers — job protection. According to the author, a field poll found that almost 2 out of 5 employees who were eligible to use PFL, but did not apply, chose not to because they feared losing their job or other negative consequences at work [Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy (Ruth Milkman, Eileen Appelbaum (2013)].

Proponents also note that studies have found that the ability to use parental leave is far greater for salaried employees (mainly managers and professionals) and high earners (those earning over $20 per hour plus employer health insurance) than for those in hourly and low-quality jobs. They argue that existing protections for workers who need to take parental leave are woefully inadequate, noting that CFRA and FMLA provide 12 weeks of unpaid leave and job protection, but these laws only cover employees who work for larger companies with 50 or more employees. This leaves over 40% of California’s workforce ineligible for job protected leave because their employer is too small. Proponents argue that this unconscionable exclusion affects these workers, their families, as well as their employers, as many workers simply must quit their jobs and find new employment following the birth of their child.

At a time when financial security and healthcare coverage are so important, the risk of losing one’s job to take leave to care for a new child is simply a risk that many new parents cannot afford to take. This legislation ensures that California workers who have been paying into the Paid Family Leave insurance program are able to use this benefit for parental leave without risk of losing their job. The author argues that no one should have to choose between the wellbeing of their new child and their family’s financial security.

6. Opponent Arguments:

Opponents argue that this measure will overwhelm small businesses with as few as five employees by allowing an employee who has only worked for the employer one day to receive 12-weeks of protected parental leave, with the threat of costly litigation for violations. Opponents argue that while small employers must provide their employees with pregnancy disability leave, they are not subject to FMLA or CFRA because large employers are the ones likely capable of accommodating such an extensive amount of time off. Both CFRA and FMLA require an employee to work for one year and at least 1,250 hours before he or she can take a 12-week protected leave of absence. This bill does not impose this same requirement and such a mandate, they argue, is simply too significant to manage.

Additionally, they argue that this lack of conformity creates an opportunity for an employee to obtain over 24 weeks of protected leave in one year. For example, an employee who has only worked 800 hours could take the 12 weeks of leave under this measure, return to work for another 450 hours, and then take another 12 weeks of leave under CFRA and FMLA. Last year, Governor Brown vetoed SB 406 (Jackson) based, in part, on the fact that the legislation would “in certain circumstances, require employers to provide employees up to 24 weeks of family leave in a 12 month period. I am open to legislation to allow workers to take leave for additional family members that does not create this anomaly.” Opponents believe that this bill creates this anomaly. They note that while the bill tried to address this issue by stating that the total amount of leave an employee can receive under this bill, CFRA and FMLA is 12 weeks in a 12-month period, this does not fix the situation because California cannot preempt or limit the application of federal law under FMLA.

Opponents also argue that this bill labels an employer’s failure to provide the 12-week leave of absence as an “unfair employment practice,” a label that exposes an employer to costly litigation under the Fair Employment and Housing Act (FEHA). An employee who believes the employer did not provide the 12-weeks of protected leave, failed to return the employee to the same or comparable position, or maintain benefits while out on the 12-weeks of leave, could pursue a claim against the employer seeking: compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees. Opponents cite a 2015 study by insurance provider Hiscox regarding the cost of employee lawsuits in California, ranking our state as exposing employers to a 40% higher risk of a discrimination claim than other states given its state specific statute - FEHA. The study estimated that the cost for a small to mid-size employer to defend and settle a single plaintiff discrimination claim was approximately $125,000, an amount which reflects the financial risks for employers.

Lastly, opponents argue that this bill is an unprecedented mandate as they are unable to identify any other state that imposes such an extensive leave of absence on employers with only 5 employees and for employees who have worked only one day for the employer. As set forth in a 2013 study for the National Conference of State Legislatures, over 40 other states impose only a 12-week leave of absence on employers with 50 or more employees with the same hours worked requirement as FMLA and CFRA. Of the remaining states that differ, all have an employee size threshold or hours worked requirement, or both, that is significantly higher than proposed under this bill.

7. Prior Legislation:

AB 908(Gomez) of 2015/16: AB 908, among other things, would revise the formula for determining benefits available pursuant to the State Disability Insurance program and the Paid Family Leave program to increase benefits to workers, as specified. AB 908 was enrolled and is at the Governor’s desk awaiting signature.

SB 406(Jackson) of 2015: SB 406 would have expanded various provisions under the California Family Rights Act (CFRA) to, among others, include care for a child of a domestic partner, sibling, grandparent, grandchild, domestic partner, or parent-in-law. AB 406 was vetoed by Governor Brown.

SB 770 (Jackson) Chapter 350, Statutes of 2013: broadened the definition of family within the Paid Family Leave (PFL) program to allow workers to receive the partial wage replacement benefits while taking care of seriously ill siblings, grandparents, grandchildren, and parents-in-law.

SUPPORT

California Employment Lawyers Association (Co-Sponsor)

Equal Rights Advocates (Co-Sponsor)

Legal Aid Society – Employment Law Center (Co-Sponsor)

Alliance for Community Empowerment

American Assn of University Women

American Civil Liberties Union of California

Breastfeed LA

California Asset Building Coalition

California Black Health Network

California Child Care Resource & Referral Network

California Domestic Workers Coalition

California Edge Coalition

California Hunger Action Coalition

California Immigrant Policy Center

California Labor Federation, AFL-CIO

California Latinas for Reproductive Justice

California Partnership

California Rural Legal Assistance Foundation

California Women’s Law Center

California Work and Family Coalition

Career Ladders Project

Center for Popular Democracy

Center for WorkLife Law

Child Care Law Center

Children’s Hospital Los Angeles

Common Sense Kids Action

Consumer Attorneys of California

Employment Lawyers Association

Equal Rights Advocates

Healthy Communities, Inc.

Mexican American Legal Defense and Education Fund

Mujeres Unidas y Activas

National Association of Social Workers, California Chapter

National Council of Jewish Women California

Parent Voices

Raising California Together

The Opportunity Institute

Tradeswomen, Inc.

Voices for Progress

Western Center on Law and Poverty

Women’s Foundation of California

9 to 5

3-Individuals

OPPOSITION

Associated Builders and Contractors of California

California Association of Joint Powers Authorities

California Chamber of Commerce

California Farm Bureau Federation

California Hotel and Lodging Association

California League of Food Processors

California Manufacturers & Technology Association

California Professional Association of Specialty Contractors

California Restaurant Association

California Retailers Association

Civil Justice Association of California

National Federation of Independent Business

Western Carwash Association

Western Growers Association

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