THIRD READING  

Bill No: SB 135

Author: Jackson (D), et al.

Amended: 3/25/19

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 4-1, 4/24/19

AYES: Hill, Jackson, Mitchell, Pan

NOES: Morrell

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SUBJECT: Paid family leave

SOURCE: California Employment Lawyers Association

First 5 California

Legal Aid at Work

DIGEST:

This bill makes several changes related to the Paid Family Leave (PFL) Program and the California Family Rights Act (CFRA). Specifically, this bill: (1) expands the scope of CFRA by reducing the employee threshold and time of service requirement to prohibit employers with five or more employees from refusing to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer; (2) expands the reasons for which CFRA leave can be taken to grant access to more employees; (3) repeals provisions enacted in 2017 that created the New Parent Leave Act and instead expands the scope of CFRA to cover these provisions; (4) expands the list of individuals for which a worker can take leave under CFRA to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or a designated person; and (5) expands the scope of PFL to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual.

ANALYSIS:

Existing law:

California Family Rights Act

1. Entitles, pursuant to the CFRA and the federal Family and Medical Leave Act (FMLA), required to be taken concurrently, eligible employees of covered employers with 50 or more employees, if the employee worked 1,250 hours in the prior 12 months, to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family care and medical leave reasons.
   2. Guaranteed reinstatement to the same or comparable position.
   3. Continued group health coverage during the duration of the leave.

(Government Code §12945.2)

1. Defines “family care and medical leave” as any of the following:
   1. Leave for reason of the birth of a child of the employee, the placement of a child with an employee in connection with the adoption or foster care of the child by the employee, or the serious health condition of a child of the employee.
   2. Leave to care for a seriously ill parent or spouse.
   3. Leave because of an employee’s own serious health condition.
2. Defines “child” as a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis who is either under 18 years of age or an adult dependent child.
3. Defines “parent” as a biological, foster, or adoptive parent, a stepparent, a legal guardian, or other person who stood in loco parentis to the employee when the employee was a child.
4. Stipulates that eligible employees must have at least 12 months of service with the employer, and at least 1,250 hours of service during those 12 months, to qualify for family care and medical leave under CFRA.
5. Specifies that in any case in which both parents entitled to leave under CFRA are employed by the same employer, the employer shall not be required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents family care and medical leave totaling more than the 12 workweeks. [Government Code §12945.2(q)]

New Parent Leave Act

1. Establishes the New Parent Leave Act which prohibits an employer with 20 or more employees in a 75-mile radius to refuse to grant an employee request to take up to 12 weeks of unpaid leave to bond with a new child within one year of the birth, adoption, or foster care placement of the child if the employee worked 1,250 hours in the prior 12 months. (Government Code §12945.6)
2. Requires the employer to provide a guarantee of employment in the same or comparable position upon return, as specified, and requires that the employer maintain and pay for continued group health coverage for employees during the duration of the parental leave.
3. Specifies that in any case in which both parents entitled to leave are employed by the same employer, the employer is not required to grant leave allowing leave that totals more than the 12 weeks. The employer may, but is not required to, grant simultaneous leave to both employees.
4. Specifies that the New Parent Leave does not apply to an employee who is subject to both CFRA and FMLA (applicable to employers of 50 or more employees).

Paid Family Leave

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 PFL 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.
2. States that PFL provides eligible employees with up to six weeks of wage replacement benefits to take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or (beginning on January 1, 2021) to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. (Unemployment Insurance Code §3301)
3. States that PFL provides wage replacement equal to one-seventh of the employee’s weekly benefit amount for each full day during which the individual is unable to work, a wage replacement of approximately 60-70 percent depending on income. (Unemployment Insurance Codes §2655 and §3301)
4. States that PFL does not provide job protection or return to work rights nor does it require employers to provide continued health coverage during the leave.

Pregnancy Disability Leave

1. States 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. (Government Code §12945)
   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.

This bill:

CFRA Provisions

1. Expands the scope of the CFRA to prohibit employers with five or more employees to refuse to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer.
2. Expands the definition of “family care and medical leave” to include:
   1. Leave for reason of the birth or the placement of a child in connection with the adoption or foster care of a child if an employee has identified the child as their designated person.
   2. Leave to care for a grandparent, grandchild, sibling, domestic partner or designated person who has a serious health condition.
   3. Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified.
3. Expands the definition of “child” under CFRA to include a child of a domestic partner, a child-in-law, or a person to whom the employee stands in loco parentis, however, eliminates the requirement that the child be under the age of 18 years of age or an adult dependent child.
4. Defines “child-in-law” as the spouse or domestic partner of a child.
5. Defines “designated person” as a person identified by the employee at the time the employee requests family care and medical leave, however, an employer may limit an employee to designating only one person per 12-month period.
6. Expands the definition of “parent” to include a parent-in-law, as defined.
7. Provides definitions for “sibling,” “parent-in-law,” “grandchild,” and “grandparent.”
8. Deletes from existing law a provision specifying that, if both parents are employed by the same employer and are entitled to leave, the employer is not required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents leave to be greater than 12 weeks.

New Parent Leave Act

1. Repeals the entire provisions of the New Parent Leave Act enacted in 2017.

PFL Provisions

1. Expands the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of the designated person or child-in-law.
2. Defines “designated person” as a person identified by the employee at the time of the request for PFL benefits, however, an employee may designate only one person within a 12-month period.
3. Deletes provisions under PFL that make an individual ineligible for benefits on any day that another family member is ready, willing, able, and available to provide the required care or participate in the qualified exigency, as specified.
4. Deletes provisions which authorizes an employer to require an employee to take up to 2 weeks of vacation leave before the employee receives PFL benefits.

General Provisions

1. Makes several findings and declarations to the effect that, even tough California has led the way by creating the nation’s first PFL program to address the critical need for working families to be able to bond with a newborn and care for seriously ill family members, the PFL is meaningless if people can lose their jobs for taking it, cannot afford to take it, or the program does not reflect their needs.
2. Makes several changes to existing provisions replacing “his or her” with gender-neutral pronouns per ACR 260 (Low, Resolution Chapter 190, Statutes of 2018) which directed a coordinated effort to revise existing statutes with inclusive language.

Background

California has several medical leaves under which an employee may be able to take time off work. Below is a brief summary of some and their requirements.

(NOTE: Please see Senate Labor, Public Employment and Retirement Committee analysis for more background information on how these leaves are changed under this bill and information on prior legislation.)

PFL Expansion Proposal in State Budget

As part of his 2019 Budget proposal, and to promote affordability and family bonding, Governor Newsom has committed to expand the PFL program with the goal of ensuring that all newborns and newly adopted babies can be cared for by a parent or a close family member for the first six months. The Administration is proposing to expand the maximum duration of a PFL benefit claim from six weeks to eight weeks for all bonding and care-giving claims, effective July 1, 2020. During the year, the Administration will convene a task force to consider different options to increase participation in the program and to phase in this program expansion. 

Comments

The California Labor Federation has taken a support, if amended, position arguing that although they support both the existing PFL program and significant expansions, they believe that if any expansions are to happen, we must explore new ways of financing the program that do not raise taxes on struggling workers or weaken solvency of the entire Disability Insurance system.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• This bill would result in a projected increase in expenditures from the Unemployment Compensation Disability Fund (UCDF), the special fund (whose major fund sources include a tax on workers and earnings from investments) that pays for State Disability Insurance and PFL benefits. The amount is unknown, but depending on the increase in usage, could be in the low hundreds of millions of dollars annually, based on specified the Employment Development Department (EDD) assumptions.
• EDD would incur a one-time implementation cost of $900,000 to develop business requirements for programming efforts, update forms and publications, update manuals and procedures for staff, and market the bill’s changes to new employers (UCDF).
• In addition, EDD would incur information technology costs to implement the provisions of this bill. These costs have not yet been determined, but are likely significant.
• The Department of Fair Employment and Housing indicates that it would incur additional enforcement costs as a result of this bill, the magnitude of which is unknown.

SUPPORT: (Verified 5/16/19)

California Employment Lawyers Association (co-source)

First 5 California (co-source)

Legal Aid at Work (co-source)

A Stronger California

AARP California

ACLU California

Alzheimer’s Association

Bet Tzedek Legal Services

Breastfeed LA
California Teachers Association
Equal Rights Advocates

California Breastfeeding Coalition

California Child Care Resource & Referral Network

California Commission on Aging

California Food Policy Advocates

California Legislative Women’s Caucus

California Partnership to End Domestic Violence

California WIC Association

California Women’s Law Center

California Work & Family Coalition

Child Care Law Center

Children Now

Common Sense Kids Action

Community Medical Centers

Congress of California Seniors

Consumer Attorneys of California

Continuing Development Inc.

Disability Rights California

Disability Rights Legal Center

Eisner Health Clinic

Engineers and Scientists of California Local 20, IFPTE

Equal Rights Advocates

First 5 Del Norte

First 5 El Dorado Commission

First 5 Kern

First 5 Monterey County

First 5 Nevada County

First 5 Santa Clara County

Friends Committee on Legislation of California

Human Impact Partners

Korean Immigrant Workers Alliance

Maternal and Child Health Access

Maternal Mental Health NOW

Mi Familia Vota

NARAL Pro-Choice California

National Council of Jewish Women

Orange County Equality Coalition

Parent Voices

PLUS Paid Leave for the U.S.

Prevention Institute

Santa Clara Valley Medical Center

SEIU California

Siskiyou Breastfeeding Taskforce

Tiburio Vasquez Health Center WIC Program

UCLA Student Health Education & Promotion

USC Family Support Center

Women for: Orange County

OPPOSITION: (Verified 5/16/19)

Auto Care Association

Brea Chamber of Commerce

California Ambulance Association

California Apartment Association

California Attractions and Parks Association

California Chamber of Commerce

California Employment Law Council

California Farm Bureau Federation

California Hospital Association

California League of Food Producers

California Manufacturers and Technology Association

California Pool and Spa Association

California Restaurant Association

California Travel Association

Camarillo Chamber of Commerce

CAWA – Representing the Automotive Parts Industry

El Centro Chamber of Commerce

El Dorado County Chamber Commission

El Dorado Hills Chamber of Commerce

Elk Grove Chamber Commerce

Family Business Association of California

Folsom Chamber of Commerce

Greater Bakersfield Chamber of Commerce

Greater Coachella Valley Chamber of Commerce

Greater Conejo Valley Chamber of Commerce

Greater Riverside Chambers of Commerce

Greater San Fernando Valley Chamber of Commerce

League of California Cities

Murrieta/Wildomar Chamber of Commerce

North Orange County Chamber

Official Police Garages of Los Angeles

Oxnard Chamber of Commerce

Palm Desert Area Chamber of Commerce

Rancho Cordova Chamber of Commerce

Roseville Area Chamber of Commerce

San Gabriel Valley Economic Partnership

Southwest California Legislative Council

Torrance Area Chamber of Commerce

Western Growers Association

ARGUMENTS IN SUPPORT: According to proponents, all Californians should be able to care for themselves, ill family members or bond with their children without the risk of losing their job. They argue that working families are changing with millions of families living with multiple generations under one roof. Families are also living father apart and often unconventionally assembled, so the most obvious caregiver might not be a parent, spouse or child. Therefore, they argue, it is essential that SB 135 is expanding the definition of family to be inclusive so that those who care for others in times of need can take leave without risking their jobs. Additionally, proponents argue that this bill will protect employees by ensuring that Californians who already pay into the PFL and Disability Insurance program are able to use this benefit without risking their job.

ARGUMENTS IN OPPOSITION: Opponents of this bill argue that this bill will significantly harm small employers with as few as five employees by requiring that they provide 12 weeks of a protected leave each year, in addition to existing leaves of absences already required, as well as potentially require larger employers to provide 10 months of protected leave, with the exposure to costly litigation for any alleged violation. According to a coalition letter of employers:

1. SB 135 Will Overwhelm Small Employers in California: If an employer denies, interferes with, or discourages the employee from taking the leave, the employer could be subject to crushing litigation.
2. SB 135 Requires Small Employers to Provide Up to 7 Months of Protected Leave When Pregnancy-Related Leave is Involved: Such an extensive period of time for a small employer with a limited workforce to accommodate such a long amount of protected leave is unreasonable.
3. For Employers with 50 or More Employees, SB 135 Will Expand the Amount of Protected Leave an Employee May Take to Half of a Year: SB 135 reduces the requirements for qualifying for CFRA, which would mean that FMLA and CFRA’s qualifying requirements no longer coincide. This is a significant issue because California cannot preempt or limit the application of federal law under FMLA. Thus, a California employer with 50 or more employees could potentially be required to provide up to 24 weeks of protected leave in one year for a single employee.
4. SB 135 Creates the Potential for Employers to Provide 10 Months of Protected Leave for Larger Employers When Pregnancy-Related Leave Is Involved: Similarly, this bill creates the opportunity for two, separate 12-week leaves of absence, in addition to pregnancy disability leave, thereby creating a potential leave of absence of 10 months.
5. SB 135 Significantly Expands the Scope of Leave beyond Immediate Family Members: SB 135 greatly expands the list of individuals for which a worker can take time off to not only include a child of a domestic partner, a child-in-law, parent-in-law, grandparent, grandchild, or sibling, but also a designated person. Because a “designated person” may not be a family member covered under FMLA, it creates the same burden of layering leaves of absence on an employer who has 50 or more employees.
6. SB 135 Increases Costs and Exposes Employers to Devastating Litigation: Even though the leave under SB 135 is not “paid” by the employer, that does not mean the employer will not endure added costs including if a claim is pursued against the employer, a worker could seek compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees.

The California Hospital Association is opposed arguing that eliminating the minimum hours and shortening the length of service requirements for CFRA would pose a significant challenge for hospitals. If the employee utilized their protected time off as intermittent leave, they could be off work for many months. They argue that when they return they would have to undergo competency testing given the infrequency of their work schedule, thus delaying their return to work, altogether, straining the rest of the workforce.

Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556

5/18/19 12:03:15

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SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 135 (Jackson) - Paid family leave

Bill Summary:

SB 135 would make several specified changes related to the Paid Family Leave Program and the California Family Rights Act. (CFRA).

Specifically, it would (1) reduce the employee threshold for the CFRA from 50 or more employees down to five or more in order to grant leave access to more employees, (2) repeal the New Parent Leave Act (enacted in 2017) and applicable to employers with 20 or more employees, and instead expand the scope of CFRA in order to provide leave rights to more employees, (3) expand the list of individuals for which a worker can take time off under CFRA to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or a designated person, (4) reduce the time threshold an employee must work before being eligible for leave under CFRA from 1,250 hours in a 12-month period to 180 days of service with the employer, and (5) expand the scope of PFL to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual.

Fiscal Impact:

• This bill would result in a projected increase in expenditures from the Unemployment Compensation Disability Fund (UCDF), the special fund (whose major fund sources include a tax on workers and earnings from investments) that pays for State Disability Insurance and Paid Family Leave benefits. The amount is unknown, but depending on the increase is usage, could be in the low hundreds of millions of dollars annually, based on specified EDD assumptions (See Staff Comments).
• The Employment Development Department (EDD) would incur one-time implementation costs of $900,000 to develop business requirements for programming efforts, update forms and publications, update manuals and procedures for staff, and market the bill’s changes to new employers (UCDF).
• In addition, EDD would incur costs information technology costs to implement the provisions of the bill. These costs have not yet been determined, but are likely significant.
• The Department of Fair Employment and Housing (DFEH) indicates that it would incur additional enforcement costs as a result of the bill, the magnitude of which is unknown.

Background:

As highlighted in the bill’s analysis from the Senate Committee on Labor, Public Employment and Retirement, California has several medical leaves under which an employee may be able to take time off work to care for (1) their own personal illness, (2) that of specified family members, or (3) bonding with a new child. The following table summarizes the options and their eligibility requirements.

California State Disability Insurance Program (SDI) was created in 1946 and is administered by EDD. The SDI program covers about 13 million workers. Current law requires coverage for employees working for employers in excess of $100 in a calendar quarter. Exceptions include certain domestic workers and governmental employees. Disability benefits are payable when a covered employee suffers a wage loss and cannot work due to pregnancy or illness/injury not related to their job. Benefits are payable for a maximum for 52 weeks. EDD data indicate that in 2016 there were about 640,000 total claims filed with a total of $5.2 billion in benefits paid. The average benefit amount was $527 with approximately 16.1 average weeks per claim.

As noted in the table, Paid Family Leave (PFL) is established within the SDI program, and provides benefits to individuals who take time off of work to care for a seriously ill child, spouse, parent, or registered domestic partner, bond with a new minor child due to birth, adoption, or foster care placement, or participate in qualifying active duty exigency. California was the first state to implement a PFL benefit, which also covers about 13 million residents in the State. In 2013, PFL was extended to workers who take time off of work to care for a seriously ill parent-in-law, grandparent, grandchild, or sibling. In 2016, about 227,000 PFL claims were filed, 90 percent of which were filed to take time off to bond with a newborn child.

The SDI program is paid for by the proceeds of an employee payroll deduction whose proceeds are deposited into the Disability Insurance (DI) Fund. The DI Fund pays out the DI and PFL benefits. PFL claims are approximately 12 percent of total payments from the DI Fund. The SDI contribution is set at 1.0% of the first $114,967 of wages in 2018. Both the rate and the wage ceiling are adjusted annually by EDD according to a specified formula. At the end of 2018, the DI fund was projected to have reserves of $3.2 billion.

Unlike SDI benefits, income from PFL has been deemed taxable by the Internal Revenue Service. Under PFL, workers can claim a cash benefit set at 60 to 70 percent (depending on income) of "base period" wages for up to 6 weeks. The maximum weekly benefit is currently set at $1,216 and is adjusted every year based on the statewide average weekly wage. The average claim in 2016 paid $585 per week for 5.4 weeks.

Proposed Law:

This bill, regarding CFRA provisions would do the following:

• Expand the scope of the CFRA to prohibit employers with 5 or more employees to refuse to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer.
• Expand the definition of “family care and medical leave” to include:
  • Leave for reason of the birth or the placement of a child in connection with the adoption or foster care of a child if an employee has identified the child as their designated person.
  • Leave to care for a grandparent, grandchild, sibling, domestic partner or designated person who has a serious health condition.
  • Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified.
• Expand the definition of “child” under CFRA to include a child of a domestic partner, a child-in-law, or a person to whom the employee stands in loco parentis, however, eliminates the requirement that the child be under the age of 18 years of age or an adult dependent child.
• Define “child-in-law” as the spouse or domestic partner of a child.
• Define “designated person” as a person identified by the employee at the time the employee requests family care and medical leave, however, an employer may limit an employee to designating only one person per 12-month period.
• Expand the definition of “parent” to include a parent-in-law, as defined.
• Provide definitions for “sibling,” “parent-in-law,” “grandchild,” and “grandparent.”
• Delete from current law a provision specifying that, if both parents are employed by the same employer and are entitled to leave, the employer is not required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents leave to be greater than 12 weeks.

The bill would repeal the entire set of provisions of the New Parent Leave Act, enacted in 2017.

With respect to PFL, the bill would do the following:

• Expand the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of the designated person or child-in-law.
• Define “designated person” as a person identified by the employee at the time of the request for PFL benefits, however, an employee may designate only one person within a 12-month period.
• Delete provisions under PFL that make an individual ineligible for benefits on any day that another family member is ready, willing, able, and available to provide the required care or participate in the qualified exigency, as specified.
• Delete provisions which authorizes an employer to require an employee to take up to 2 weeks of vacation leave before the employee receives PFL benefits.

Related Legislation:

• SB 1123 (Jackson), Chapter 849, Statutes of 2018, expanded the Paid Family Leave Program to include time off to participate in a qualifying exigency related to the covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces of the United States, as specified.
• SB 63 (Jackson), Chapter 686, Statutes of 2017, enacted the New Parent Leave Act prohibiting an employer, of 20 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.
• AB 908(Gomez) Chapter 5, Statutes of 2016, among other things, revised the formula for determining benefits pursuant to the State Disability Insurance program and the Paid Family Leave program to increase benefits to workers providing a wage replacement of approximately 60 to 70 percent, depending on income, as specified.

Staff Comments:

EDD notes that the bill would make three changes to the PFL program. First, the bill would permit workers to take time off to bond with a designated person or care for a seriously ill designated person, as specified. Second, the bill would allow a worker to receive PFL benefits even if another family member is available to provide care or assist with a qualifying exigency. Third, the bill would no longer allow an employer to require a worker to take up to two weeks of vacation before receiving PFL benefits.

The bill would effectively remove the requirement that a worker must have a familial relationship with the person for whom they are bonding with or caring. Therefore, any eligible worker could bond with any child or care for any seriously ill person. Due to this complexity, EDD is unable to provide a precise estimate of the bill’s impact to the SDI fund. Instead, EDD has provided a range of fund estimates, which are subject to change based on program usage.

A 10 percent increase in PFL claims would result in additional PFL benefits paid of approximately $110 million. The amount of additional benefits would remain in that range through the out years of EDD’s forecast. This increase in benefits paid would result in a 0.1 percent increase in the SDI contribution rate in 2022, and a 0.1 percent decrease in the contribution rate in 2024. The EDD estimates this would result in a maximum additional yearly contribution of $138 per worker in 2022, and a maximum yearly contribution reduction of $150 per worker in 2024.

Alternatively, a 25 percent increase in PFL claims would result in additional PFL benefits paid of approximately $300 million. That amount of additional benefits would also remain in that range through the out years of EDD’s forecast. This increase in benefits would result in a 0.1 percent increase in the SDI contribution rate in 2022.

EDD’s estimated one-time implementation costs for this bill, not including information technology programming, would be $900,000. This includes costs needed to develop business requirements for programming efforts, updating forms and publications, updating manuals and procedures for staff, and marketing these changes to new employers. A majority of these costs relate to changes to EDD’s Optical Character Recognition PFL application form, which this bill would require.

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SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Jerry Hill, Chair

2019 - 2020 Regular

Bill No: SB 135 Hearing Date: April 24, 2019

SUBJECT: Paid family leave.

KEY ISSUES

Should the employee threshold for the California Family Rights Act (CFRA) be reduced from 50 or more employees to employers of 5 or more in order to grant leave access to more employees?

Should the Legislature repeal the New Parent Leave Act, enacted in 2017 and applicable to employers with 20 or more employees, and instead expand the scope of CFRA in order to provide leave rights to more employees?

Should the list of individuals for which a worker can take time off under CFRA be expanded to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or a designated person?

Should the time threshold an employee must work before being eligible for leave under CFRA be reduced from 1,250 hours in a 12-month period to 180 days of service with the employer?

Should the Legislature expand the scope of the Paid Family Leave (PFL) program to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual?

ANALYSIS

Existing law – California Family Rights Act:

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 with 50 or more employees, if the employee worked 1,250 hours in the prior 12 months, to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family care and medical leave reasons.
   2. Guaranteed reinstatement to the same or comparable position upon return.
   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. Defines “family care and medical leave” as any of the following:
   1. Leave for reason of the birth of a child of the employee, the placement of a child with an employee in connection with the adoption or foster care of the child by the employee, or the serious health condition of a child of the employee.
   2. Leave to care for a parent or a spouse who has a serious health condition.
   3. Leave because of an employee’s own serious health condition, as specified.
2. Defines “child” as a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis who is either under 18 years of age or an adult dependent child.
3. Defines “parent” as a biological, foster, or adoptive parent, a stepparent, a legal guardian, or other person who stood in loco parentis to the employee when the employee was a child.
4. Stipulates that eligible employees must have at least 12 months of service with the employer, and at least 1,250 hours of service during those 12 months, to qualify for family care and medical leave under CFRA.
5. Specifies that in any case in which both parents entitled to leave under CFRA are employed by the same employer, the employer shall not be required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents family care and medical leave totaling more than the 12 workweeks. [Government Code §12945.2(q)]

Existing law – New Parent Leave Act:

1. Establishes the New Parent Leave Act which prohibits an employer with 20 or more employees in a 75-mile radius to refuse to grant an employee a request to take up to 12 weeks of unpaid leave to bond with a new child within one year of the birth, adoption, or foster care placement of the child if the employee worked 1,250 hours in the prior 12 months. (Government Code §12945.6)
2. Requires the employer to provide a guarantee of employment in the same or comparable position upon return, as specified, and requires that the employer maintain and pay for continued group health coverage for employees during the duration of the parental leave at the same level and conditions.
3. Specifies that in any case in which both parents entitled to leave are employed by the same employer, the employer is not required to grant leave allowing the parents parental leave that totals more than the 12 weeks. The employer may, but is not required to, grant simultaneous leave to both employees.
4. Specifies that the New Parent Leave does not apply to an employee who is subject to both CFRA and FMLA (applicable to employers of 50 or more employees).

Existing law – Paid Family Leave (PFL):

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 (PFL) 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.
2. PFL provides eligible employees with up to 6 weeks of wage replacement benefits to take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or (beginning on January 1, 2021) to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. (Unemployment Insurance Code §3301)
3. PFL provides wage replacement equal to one-seventh of the employee’s weekly benefit amount for each full day during which the individual is unable to work, a wage replacement of approximately 60-70 percent depending on income. (Unemployment Insurance Codes §2655 and §3301)
4. PFL does not provide job protection or return to work rights nor does it require employers to provide continued group health coverage during the leave.

Existing law – Pregnancy Disability 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. (Government Code §12945)
   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.

This bill, regarding CFRA provisions:

1. Expands the scope of the California Family Rights Act (CFRA) to prohibit employers with 5 or more employees to refuse to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer.
2. Expands the definition of “family care and medical leave” to include:
   1. Leave for reason of the birth or the placement of a child in connection with the adoption or foster care of a child if an employee has identified the child as their designated person.
   2. Leave to care for a grandparent, grandchild, sibling, domestic partner or designated person who has a serious health condition.
   3. Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified.
3. Expands the definition of “child” under CFRA to include a child of a domestic partner, a child-in-law, or a person to whom the employee stands in loco parentis, however, eliminates the requirement that the child be under the age of 18 years of age or an adult dependent child.
4. Defines “child-in-law” as the spouse or domestic partner of a child.
5. Defines “designated person” as a person identified by the employee at the time the employee requests family care and medical leave, however, an employer may limit an employee to designating only one person per 12-month period.
6. Expands the definition of “parent” to include a parent-in-law, as defined.
7. Provides definitions for “sibling,” “parent-in-law,” “grandchild,” and “grandparent.”
8. Deletes from existing law a provision specifying that, if both parents are employed by the same employer and are entitled to leave, the employer is not required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents leave to be greater than 12 weeks.

This bill, regarding New Parent Leave Act:

1. Repeals the entire provisions of the New Parent Leave Act enacted in 2017.

This bill, regarding PFL provisions:

1. Expands the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of the designated person or child-in-law.
2. Defines “designated person” as a person identified by the employee at the time of the request for PFL benefits, however, an employee may designate only one person within a 12-month period.
3. Deletes provisions under PFL that make an individual ineligible for benefits on any day that another family member is ready, willing, able, and available to provide the required care or participate in the qualified exigency, as specified.
4. Deletes provisions which authorizes an employer to require an employee to take up to 2 weeks of vacation leave before the employee receives PFL benefits.

This bill:

1. Makes several findings and declarations to the effect that, even tough California has led the way by creating the nation’s first paid family leave program to address the critical need for working families to be able to bond with a newborn and care for seriously ill family members, the paid family leave is meaningless if people can lose their jobs for taking it, cannot afford to take it, or the program does not reflect their needs.
2. Makes several changes to existing provisions replacing “his or her” with gender-neutral pronouns per ACR No. 260 of 2018 which directed a coordinated effort to revise existing statutes with inclusive language.

COMMENTS

1. Background:

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

This bill repeals and incorporates provisions from various leaves to expand the scope of CFRA to prohibit employers with 5 or more employees (reducing the threshold from 50 to 5) from refusing to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee has at least 6 months (180 days, reduced from the current 1,250 hour requirement) of service with the employer. The bill would also expand the list of individuals for which a worker can take CFRA time off to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or designated persons, as defined.

The bill would repeal the recently chaptered New Parent Leave Act (NPL), enacted in 2017 by SB 63 (Jackson), but would instead incorporate its requirements into CFRA provisions.

This bill would also add into CFRA a current PFL requirement that beginning on January 1, 2021, authorizes an employee to take PFL to participate in a qualifying exigency related to the covered active duty or call to active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified. This particular change extends job protection provisions in CFRA to these workers.

This bill also expands the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual.

2. Need for this bill?

Fifteen years ago, California enacted the nation’s first Paid Family Leave Program, providing six weeks of partial wage replacement to bond with a newborn or care for a seriously ill family member. However, there is no job protection directly associated with PFL, leaving far too many Californians struggling with the impossible choice of whether to care for their newborn or loved one or jeopardize their jobs and economic security. The author argues that, unfortunately, our laws that provide job-protection to individuals using PFL have strict eligibility requirements and are limited to only those working for large employers, leaving over half the workforce without return-to-work rights.

Studies have shown that paid family leave policies have positive impacts on infant and maternal health, as well as being associated with greater labor force attachment and long-term productivity. According to the author,

“Research has increasingly made clear that the first months and years of an infant’s life are crucial to success: over 80% of a child’s total brain development happens in the first three years, and frequent, nurturing interactions are key to strong early brain development. In addition, evolving workplaces and family structures also necessitate changes to California’s leave laws. With more women in the workplace and more two-income families, it is vital for men and women to be able to take job-protected time off to care for newborns or seriously ill family members and utilize their Paid Family Leave benefits to do so.

California’s families also do not look the same as they did decades ago. In 2016, a record 64 million people, or 20 percent of the U.S. population, lived with multiple generations under one roof, and California has the second highest percentage of multigenerational families in the U.S. In addition, up to 40 percent of infants in California are born into single-parent families, making it vital to expand the circle of caregivers who can care for a child to achieve Governor Gavin Newsom’s articulated goal of six months of individual care for newborns. An aunt or grandparent, for instance, may be an important source of loving, individual care during the first months of a newborn’s life…Sometimes, the most obvious caregiver for a seriously ill person may be a roommate or long-time neighbor.”

The author believes that SB 135 will ensure that nearly all Californians who pay into the Paid Family Leave Program can use it without losing their jobs; that more newborns can receive individual care for their first six months of life, an essential time for early brain development; and that California’s leave laws reflect the state’s diverse, multigenerational families and caregiving needs.

3. PFL Expansion and Other States:

The United States is the only developed country in the world without a paid parental leave policy. According to the National Conference of State Legislatures, four states - California, New Jersey, New York and Rhode Island - currently provide for paid family leave. Washington D.C. enacted a paid family leave measure in February 2017 that will take effect on July 1, 2020. The State of Washington passed a measure to create a paid family leave program in July 2017, benefit payments will commence at the start of 2020. California offers up to six weeks under the PFL program, Washington will provide up to 12 weeks beginning in 2021, New York currently offers 10 weeks and is increasing that to 12 in 2021, Massachusetts will offers up to 12 weeks beginning in 2021, Rhode Island provides four weeks, and New Jersey offers six weeks.

As part of his 2019 budget proposal, and to promote affordability and family bonding, Governor Newsom has committed to expand California’s Paid Family Leave program with the goal of ensuring that all newborns and newly adopted babies can be cared for by a parent or a close family member for the first six months. During the year, the Administration will convene a task force to consider different options to increase participation in the program and to phase in this program expansion. 

4. Staff comment:

The changes proposed with this bill would reduce the employer size and service time requirements under CFRA, in addition to expanding the list of individuals for which a worker can take time off to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or designated persons. These changes would result in the CFRA provisions and the federal FMLA provisions no longer coinciding for purposes of concurrent applicability.

The make-up of families has changed and the need for our leave laws to adjust to these changes is timely and necessary. As discussions on this bill and efforts to expand our leave programs continue, the committee may want to consider the following questions:

• What is the impact of CFRA and FMLA’s provisions no longer running concurrently?
• Regarding the ability to designate a person for leave, should there be clear guidelines around who this designated person should be?
• Should an employee be able to take Paid Family Leave to care for a roommate?
• Should an employee be able to designate that roommate’s child as their designated person?
• What is the impact of these changes on small employers?

5. Proponent Arguments:

According to proponents, all Californians should be able to care for themselves, ill family members or bond with their children without the risk of losing their job. They argue that working families are changing with millions of families living with multiple generations under one roof. Families are also living father apart and often unconventionally assembled, so the most obvious caregiver might not be a parent, spouse or child. They note that about 34.2 million Americans provide unpaid care to an adult age 50 or older a year and about 15% of the caregivers are a friend, neighbor or another non-relative. (Caregiving in the U.S., National Alliance for Caregiving and AARP, 2015) Therefore, they argue, it is essential that SB 135 is expanding the definition of family to be inclusive so that those who care for others in times of need can take leave without risking their jobs.

Proponents also argue that this bill will protect employees by ensuring that Californians who already pay into the Paid Family Leave and Disability Insurance program are able to use this benefit without risking their job. They note that low-wage workers earning $24,000 or less amount to almost 40% of all eligible PFL recipients in California, but they represent only 24% of actual claimants. In fact, they argue, only 37% of eligible workers in such “low quality” jobs who were aware of PFL took advantage of it. (Ruth Milkman & Eileen Appelbaum, Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy, 2015) Proponent argue that SB 135 will simplify leave laws by bringing wage replacement and job protection laws in close alignment. Overall, proponents argue that SB 135 gives newborns a greater chance to receive their strongest developmental start, while ensuring our leave laws reflect the reality of California’s working families today.

The California Labor Federation has taken a support, if amended, position on the bill arguing that they support both the existing PFL program, as well as significant expansions of its major provisions. However, they believe that if any expansions are to happen, we must explore new ways of financing the program that do not raise taxes on struggling workers or weaken solvency of the entire Disability Insurance system. They also argue that we must consider separating PFL from the DI fund and consider a system whereby employers fund any tax increase required by these PFL expansions.

6. Opponent Arguments:

Opponents of the measure argue that this bill will significantly harm small employers with as few as 5 employees by requiring these employers to provide 12 weeks of a protected leave of absence each year, in addition to existing leaves of absences already required as well as potentially require larger employers to provide 10 months of protected leave, with the exposure to costly litigation for any alleged violation. According to a coalition letter of employers, this bill will overwhelm employers as follows:

1. SB 135 Will Overwhelm Small Employers in California: This proposed leave is “protected,” meaning the employer has no discretion to deny or modify it to accommodate the employer’s business operations or other employees’ who may be out of work on other leave of absences. If an employer denies, interferes with, or discourages the employee from taking the leave, the employer could be subject to crushing litigation.
2. SB 135 Requires Small Employers to Provide Up to 7 Months of Protected Leave When Pregnancy-Related Leave is Involved: California already requires employers with 5 or more employees to provide up to 4 months of protected leave for an employee who suffers a medical disability because of pregnancy. SB 135 will add another 12-weeks of leave for the same employee, thereby creating a total of 7 months of protected leave for pregnancy. Such an extensive period of time for a small employer with a limited workforce to accommodate such a long amount of protected leave is unreasonable.
3. For Employers with 50 or More Employees, SB 135 Will Expand the Amount of Protected Leave an Employee May Take to Half of a Year: SB 135 reduces the requirements for qualifying for CFRA, which would mean that FMLA and CFRA’s qualifying requirements no longer coincide. Just like FMLA, in order to qualify for CFRA, the employee must have worked for the employer for 1,250 hours over the 12 months preceding the date the leave would commence. This means that CFRA and FMLA leave normally run together, so the total time taken is a maximum of 3 months. However, SB 135 eliminates the threshold number of hours and reduces the 12-month requirement to 180 days. This is a significant issue because California cannot preempt or limit the application of federal law under FMLA. In other words, simply because the employee already took leave under CFRA does not negate their ability to then qualify for FMLA leave as well.

An employee could work any number of hours in a 180-day period prior to taking CFRA leave (which would not trigger FMLA), and upon returning to work, the employee would still have the opportunity to qualify for another 12-week protected leave of absence under FMLA once he or she reaches the 1,250 hours worked threshold. Thus, a California employer with 50 or more employees could potentially be required to provide up to 24 weeks of protected leave in one year for a single employee.

1. SB 135 Creates the Potential for Employers to Provide 10 Months of Protected Leave for Larger Employers When Pregnancy-Related Leave Is Involved: Similarly, employers with 50 or more employees already have to provide up to 4 months of PDL/FMLA plus + 3 months child bonding leave under CFRA/FMLA. While employees who work 1,250 hours over a 12-month period currently receive this benefit through either FMLA or CFRA, SB 135 expands the potential 7-month leave to those that only work for 180 days but fewer than 1,250 hours. An employee could work any number of hours in a 180-day period prior to taking PDL/CFRA (which would not trigger FMLA) and upon returning to work; the employee would still have the opportunity to qualify for another 12-week protected leave of absence under FMLA once the 1,250 hours worked threshold is reached. This bill creates the opportunity for two, separate 12-week leaves of absence, in addition to pregnancy disability leave, thereby creating a potential leave of absence of 10 months.
2. SB 135 Significantly Expands the Scope of Leave Beyond Immediate Family Members: SB 135 greatly expands the list of individuals for which a worker can take time off to not only include a child of a domestic partner, a child-in-law, parent-in-law, grandparent, grandchild, or sibling, but also a designated person. Because a “designated person” may not be a family member covered under FMLA, it creates the same burden of layering leaves of absence on an employer who has 50 or more employees. Specifically, if an employee identifies a best friend as a “designated person” to take 12 weeks of protected leave, that best friend is not a covered member under FMLA. Accordingly, the employee could take leave under SB 135 for 3 months, return to work, and then take another 3 months off under FMLA for the employee’s or family member’s medical condition.
3. SB 135 Increases Costs and Exposes Employers to Devastating Litigation: Even though the leave under SB 135 is not “paid” by the employer, that does not mean the employer will not endure added costs. While on leave, the employer will have to: (1) maintain medical benefits while the employee is on leave; (2) pay for a temporary employee to cover for the employee on leave, usually at a higher premium given the limited duration of employment; or (3) pay overtime to other employees to cover the work of the employee on leave. The cost of overtime is higher given the increase of the minimum wage, which will add to the overall cost especially for small employers.

Additionally, 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, could pursue a claim against the employer seeking compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees.

1. California Already Imposes Numerous Family Friendly Leaves of Absence on Employers: California is already recognized by the National Conference of State Legislatures as one of the most family friendly states given its list of programs and protected leaves of absence, including: paid sick days, school activities leave, kin care, paid family leave program, pregnancy disability leave, and the California Family Rights Act. This list is in addition to the leaves of absence required at the federal level. Imposing another 12-week leave of absence is simply too much for employers to bear, especially small employers.

The California Hospital Association writes in opposition arguing that eliminating the minimum hours and shortening the length of service requirements for CFRA would pose a significant challenge for California hospitals, as it would provide protected time off to an employee who may have only worked for 24 shifts. If the employee utilized their protected time off as intermittent leave, they could be off work for many months. They argue that when they return they would have to undergo competency testing given the infrequency of their work schedule, thus delaying their return to work, altogether, straining the rest of the workforce.

7. Prior Legislation:

SB 1123 (Jackson), Chapter 849, Statutes of 2018, expanded the Paid Family Leave Program to include time off to participate in a qualifying exigency related to the covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces of the United States, as specified.

SB 63 (Jackson), Chapter 686, Statutes of 2017, enacted the New Parent Leave Act prohibiting an employer, of 20 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.

AB 908(Gomez) Chapter 5, Statutes of 2016, among other things, revised the formula for determining benefits pursuant to the State Disability Insurance program and the Paid Family Leave program to increase benefits to workers providing a wage replacement of approximately 60 to 70 percent, depending on income, as specified.

SB 406(Jackson) of 2015, would have expanded various provisions under 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, expanded the scope of PFL to include time off to care for seriously ill siblings, grandparents, grandchildren, and parents-in-law.

SUPPORT

California Employment Lawyers Association (Co-Sponsor)

First 5 California (Co-Sponsor)

Legal Aid at Work (Co-Sponsor)

A Stronger California

AARP California

ACLU California

Alzheimer’s Association

Bet Tzedek Legal Services

Breastfeed LA
California Teachers Association
Equal Rights Advocates

California Breastfeeding Coalition

California Child Care Resource & Referral Network

California Food Policy Advocates

California Legislative Women’s Caucus

California Partnership to End Domestic Violence

California WIC Association

California Women’s Law Center

California Work & Family Coalition

Child Care Law Center

Children Now

Common Sense Kids Action

Community Medical Centers

Congress of California Seniors

Consumer Attorneys of California

Continuing Development Inc.

Disability Rights Legal Center

Eisner Health Clinic

Equal Rights Advocates

First 5 El Dorado Commission

First 5 Nevada County

First 5 Santa Clara County

Friends Committee on Legislation of California

Human Impact Partners (HIP)

Korean Immigrant Workers Alliance

Maternal and Child Health Access

Maternal Mental Health NOW

Mi Familia Vota

NARAL Pro-Choice California

Orange County Equality Coalition

Parent Voices

PLUS Paid Leave for the U.S.

Prevention Institute

Santa Clara Valley Medical Center

SEIU California

Siskiyou Breastfeeding Taskforce

Tiburio Vasquez Health Center WIC Program

UCLA Student Health Education & Promotion

USC Family Support Center

Women for: Orange County

OPPOSITION

Auto Care Association

Brea Chamber of Commerce

California Ambulance Association

California Association of Hospitals and Health Systems

California Chamber of Commerce

California Employment Law Council

California Farm Bureau Federation

California Hospital Association

California League of Food Producers

California Manufacturers and Technology Association

Camarillo Chamber of Commerce

CAWA – Representing the Automotive Parts Industry

El Centro Chamber of Commerce

El Dorado Hills Chamber of Commerce

Family Business Association of California

Greater Bakersfield Chamber of Commerce

Greater Coachella Valley Chamber of Commerce

Greater Conejo Valley Chamber of Commerce

League of California Cities

Murrieta/Wildomar Chamber of Commerce

North Orange County Chamber

Official Police Garages of Los Angeles

Palm desert Area Chamber of Commerce

Rancho Cordova Chamber of Commerce

San Fernando Valley Chamber of Commerce

San Gabriel Valley Economic Partnership

Southwest California Legislative Council

Torrance Area Chamber of Commerce

Western Growers Association

-- END --

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Jerry Hill, Chair

2019 - 2020 Regular

Bill No: SB 135 Hearing Date: April 10, 2019

SUBJECT: Paid family leave.

KEY ISSUES

Should the employee threshold for the California Family Rights Act (CFRA) be reduced from 50 or more employees to employers of 5 or more in order to grant leave access to more employees?

Should the Legislature repeal the New Parent Leave Act, enacted in 2017 and applicable to employers with 20 or more employees, and instead expand the scope of CFRA in order to provide leave rights to more employees?

Should the list of individuals for which a worker can take time off under CFRA be expanded to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or a designated person?

Should the time threshold an employee must work before being eligible for leave under CFRA be reduced from 1,250 hours in a 12-month period to 180 days of service with the employer?

Should the Legislature expand the scope of the Paid Family Leave (PFL) program to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual?

ANALYSIS

Existing law – California Family Rights Act:

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 with 50 or more employees, if the employee worked 1,250 hours in the prior 12 months, to:
   1. Take up to 12 workweeks of unpaid, job-protected leave during a 12-month period for specified family care and medical leave reasons.
   2. Guaranteed reinstatement to the same or comparable position upon return.
   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. Defines “family care and medical leave” as any of the following:
   1. Leave for reason of the birth of a child of the employee, the placement of a child with an employee in connection with the adoption or foster care of the child by the employee, or the serious health condition of a child of the employee.
   2. Leave to care for a parent or a spouse who has a serious health condition.
   3. Leave because of an employee’s own serious health condition, as specified.
2. Defines “child” as a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis who is either under 18 years of age or an adult dependent child.
3. Defines “parent” as a biological, foster, or adoptive parent, a stepparent, a legal guardian, or other person who stood in loco parentis to the employee when the employee was a child.
4. Stipulates that eligible employees must have at least 12 months of service with the employer, and at least 1,250 hours of service during those 12 months, to qualify for family care and medical leave under CFRA.
5. Specifies that in any case in which both parents entitled to leave under CFRA are employed by the same employer, the employer shall not be required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents family care and medical leave totaling more than the 12 workweeks. [Government Code §12945.2(q)]

Existing law – New Parent Leave Act:

1. Establishes the New Parent Leave Act which prohibits an employer with 20 or more employees in a 75-mile radius to refuse to grant an employee a request to take up to 12 weeks of unpaid leave to bond with a new child within one year of the birth, adoption, or foster care placement of the child if the employee worked 1,250 hours in the prior 12 months. (Government Code §12945.6)
2. Requires the employer to provide a guarantee of employment in the same or comparable position upon return, as specified, and requires that the employer maintain and pay for continued group health coverage for employees during the duration of the parental leave at the same level and conditions.
3. Specifies that in any case in which both parents entitled to leave are employed by the same employer, the employer is not required to grant leave allowing the parents parental leave that totals more than the 12 weeks. The employer may, but is not required to, grant simultaneous leave to both employees.
4. Specifies that the New Parent Leave does not apply to an employee who is subject to both CFRA and FMLA (applicable to employers of 50 or more employees).

Existing law – Paid Family Leave (PFL):

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 (PFL) 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.
2. PFL provides eligible employees with up to 6 weeks of wage replacement benefits to take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or (beginning on January 1, 2021) to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. (Unemployment Insurance Code §3301)
3. PFL provides wage replacement equal to one-seventh of the employee’s weekly benefit amount for each full day during which the individual is unable to work, a wage replacement of approximately 60-70 percent depending on income. (Unemployment Insurance Codes §2655 and §3301)
4. PFL does not provide job protection or return to work rights nor does it require employers to provide continued group health coverage during the leave.

Existing law – Pregnancy Disability 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. (Government Code §12945)
   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.

This bill, regarding CFRA provisions:

1. Expands the scope of the California Family Rights Act (CFRA) to prohibit employers with 5 or more employees to refuse to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer.
2. Expands the definition of “family care and medical leave” to include:
   1. Leave for reason of the birth or the placement of a child in connection with the adoption or foster care of a child if an employee has identified the child as their designated person.
   2. Leave to care for a grandparent, grandchild, sibling, domestic partner or designated person who has a serious health condition.
   3. Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified.
3. Expands the definition of “child” under CFRA to include a child of a domestic partner, a child-in-law, or a person to whom the employee stands in loco parentis, however, eliminates the requirement that the child be under the age of 18 years of age or an adult dependent child.
4. Defines “child-in-law” as the spouse or domestic partner of a child.
5. Defines “designated person” as a person identified by the employee at the time the employee requests family care and medical leave, however, an employer may limit an employee to designating only one person per 12-month period.
6. Expands the definition of “parent” to include a parent-in-law, as defined.
7. Provides definitions for “sibling,” “parent-in-law,” “grandchild,” and “grandparent.”
8. Deletes from existing law a provision specifying that, if both parents are employed by the same employer and are entitled to leave, the employer is not required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents leave to be greater than 12 weeks.

This bill, regarding New Parent Leave Act:

1. Repeals the entire provisions of the New Parent Leave Act enacted in 2017.

This bill, regarding PFL provisions:

1. Expands the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of the designated person or child-in-law.
2. Defines “designated person” as a person identified by the employee at the time of the request for PFL benefits, however, an employee may designate only one person within a 12-month period.
3. Deletes provisions under PFL that make an individual ineligible for benefits on any day that another family member is ready, willing, able, and available to provide the required care or participate in the qualified exigency, as specified.
4. Deletes provisions which authorizes an employer to require an employee to take up to 2 weeks of vacation leave before the employee receives PFL benefits.

This bill:

1. Makes several findings and declarations to the effect that, even tough California has led the way by creating the nation’s first paid family leave program to address the critical need for working families to be able to bond with a newborn and care for seriously ill family members, the paid family leave is meaningless if people can lose their jobs for taking it, cannot afford to take it, or the program does not reflect their needs.
2. Makes several changes to existing provisions replacing “his or her” with gender-neutral pronouns per ACR No. 260 of 2018 which directed a coordinated effort to revise existing statutes with inclusive language.

COMMENTS

1. Background:

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

This bill repeals and incorporates provisions from various leaves to expand the scope of CFRA to prohibit employers with 5 or more employees (reducing the threshold from 50 to 5) from refusing to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee has at least 6 months (180 days, reduced from the current 1,250 hour requirement) of service with the employer. The bill would also expand the list of individuals for which a worker can take CFRA time off to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or designated persons, as defined.

The bill would repeal the recently chaptered New Parent Leave Act (NPL), enacted in 2017 by SB 63 (Jackson), but would instead incorporate its requirements into CFRA provisions.

This bill would also add into CFRA a current PFL requirement that beginning on January 1, 2021, authorizes an employee to take PFL to participate in a qualifying exigency related to the covered active duty or call to active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified. This particular change extends job protection provisions in CFRA to these workers.

This bill also expands the scope of PFL provisions to include time off to care for a seriously ill designated person or child-in-law, as defined, or to bond with a designated person or child-in-law within one year of the birth or placement of that individual.

2. Need for this bill?

Fifteen years ago, California enacted the nation’s first Paid Family Leave Program, providing six weeks of partial wage replacement to bond with a newborn or care for a seriously ill family member. However, there is no job protection directly associated with PFL, leaving far too many Californians struggling with the impossible choice of whether to care for their newborn or loved one or jeopardize their jobs and economic security. The author argues that, unfortunately, our laws that provide job-protection to individuals using PFL have strict eligibility requirements and are limited to only those working for large employers, leaving over half the workforce without return-to-work rights.

Studies have shown that paid family leave policies have positive impacts on infant and maternal health, as well as being associated with greater labor force attachment and long-term productivity. According to the author,

“Research has increasingly made clear that the first months and years of an infant’s life are crucial to success: over 80% of a child’s total brain development happens in the first three years, and frequent, nurturing interactions are key to strong early brain development. In addition, evolving workplaces and family structures also necessitate changes to California’s leave laws. With more women in the workplace and more two-income families, it is vital for men and women to be able to take job-protected time off to care for newborns or seriously ill family members and utilize their Paid Family Leave benefits to do so.

California’s families also do not look the same as they did decades ago. In 2016, a record 64 million people, or 20 percent of the U.S. population, lived with multiple generations under one roof, and California has the second highest percentage of multigenerational families in the U.S. In addition, up to 40 percent of infants in California are born into single-parent families, making it vital to expand the circle of caregivers who can care for a child to achieve Governor Gavin Newsom’s articulated goal of six months of individual care for newborns. An aunt or grandparent, for instance, may be an important source of loving, individual care during the first months of a newborn’s life…Sometimes, the most obvious caregiver for a seriously ill person may be a roommate or long-time neighbor.”

The author believes that SB 135 will ensure that nearly all Californians who pay into the Paid Family Leave Program can use it without losing their jobs; that more newborns can receive individual care for their first six months of life, an essential time for early brain development; and that California’s leave laws reflect the state’s diverse, multigenerational families and caregiving needs.

3. PFL Expansion and Other States:

The United States is the only developed country in the world without a paid parental leave policy. According to the National Conference of State Legislatures, four states - California, New Jersey, New York and Rhode Island - currently provide for paid family leave. Washington D.C. enacted a paid family leave measure in February 2017 that will take effect on July 1, 2020. The State of Washington passed a measure to create a paid family leave program in July 2017, benefit payments will commence at the start of 2020. California offers up to six weeks under the PFL program, Washington will provide up to 12 weeks beginning in 2021, New York currently offers 10 weeks and is increasing that to 12 in 2021, Massachusetts will offers up to 12 weeks beginning in 2021, Rhode Island provides four weeks, and New Jersey offers six weeks.

As part of his 2019 budget proposal, and to promote affordability and family bonding, Governor Newsom has committed to expand California’s Paid Family Leave program with the goal of ensuring that all newborns and newly adopted babies can be cared for by a parent or a close family member for the first six months. During the year, the Administration will convene a task force to consider different options to increase participation in the program and to phase in this program expansion. 

4. Staff comment:

The changes proposed with this bill would reduce the employer size and service time requirements under CFRA, in addition to expanding the list of individuals for which a worker can take time off to include child-in-laws, grandparents, grandchildren, siblings, domestic partners, parent-in-laws, or designated persons. These changes would result in the CFRA provisions and the federal FMLA provisions no longer coinciding for purposes of concurrent applicability.

The make-up of families has changed and the need for our leave laws to adjust to these changes is timely and necessary. As discussions on this bill and efforts to expand our leave programs continue, the committee may want to consider the following questions:

• What is the impact of CFRA and FMLA’s provisions no longer running concurrently?
• Regarding the ability to designate a person for leave, should there be clear guidelines around who this designated person should be?
• Should an employee be able to take Paid Family Leave to care for a roommate?
• Should an employee be able to designate that roommate’s child as their designated person?
• What is the impact of these changes on small employers?

5. Proponent Arguments:

According to proponents, all Californians should be able to care for themselves, ill family members or bond with their children without the risk of losing their job. They argue that working families are changing with millions of families living with multiple generations under one roof. Families are also living father apart and often unconventionally assembled, so the most obvious caregiver might not be a parent, spouse or child. They note that about 34.2 million Americans provide unpaid care to an adult age 50 or older a year and about 15% of the caregivers are a friend, neighbor or another non-relative. (Caregiving in the U.S., National Alliance for Caregiving and AARP, 2015) Therefore, they argue, it is essential that SB 135 is expanding the definition of family to be inclusive so that those who care for others in times of need can take leave without risking their jobs.

Proponents also argue that this bill will protect employees by ensuring that Californians who already pay into the Paid Family Leave and Disability Insurance program are able to use this benefit without risking their job. They note that low-wage workers earning $24,000 or less amount to almost 40% of all eligible PFL recipients in California, but they represent only 24% of actual claimants. In fact, they argue, only 37% of eligible workers in such “low quality” jobs who were aware of PFL took advantage of it. (Ruth Milkman & Eileen Appelbaum, Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy, 2015) Proponent argue that SB 135 will simplify leave laws by bringing wage replacement and job protection laws in close alignment. Overall, proponents argue that SB 135 gives newborns a greater chance to receive their strongest developmental start, while ensuring our leave laws reflect the reality of California’s working families today.

6. Opponent Arguments:

Opponents of the measure argue that this bill will significantly harm small employers with as few as 5 employees by requiring these employers to provide 12 weeks of a protected leave of absence each year, in addition to existing leaves of absences already required as well as potentially require larger employers to provide 10 months of protected leave, with the exposure to costly litigation for any alleged violation. According to a coalition letter of employers, this bill will overwhelm employers as follows:

1. SB 135 Will Overwhelm Small Employers in California: This proposed leave is “protected,” meaning the employer has no discretion to deny or modify it to accommodate the employer’s business operations or other employees’ who may be out of work on other leave of absences. If an employer denies, interferes with, or discourages the employee from taking the leave, the employer could be subject to crushing litigation.
2. SB 135 Requires Small Employers to Provide Up to 7 Months of Protected Leave When Pregnancy-Related Leave is Involved: California already requires employers with 5 or more employees to provide up to 4 months of protected leave for an employee who suffers a medical disability because of pregnancy. SB 135 will add another 12-weeks of leave for the same employee, thereby creating a total of 7 months of protected leave for pregnancy. Such an extensive period of time for a small employer with a limited workforce to accommodate such a long amount of protected leave is unreasonable.
3. For Employers with 50 or More Employees, SB 135 Will Expand the Amount of Protected Leave an Employee May Take to Half of a Year: SB 135 reduces the requirements for qualifying for CFRA, which would mean that FMLA and CFRA’s qualifying requirements no longer coincide. Just like FMLA, in order to qualify for CFRA, the employee must have worked for the employer for 1,250 hours over the 12 months preceding the date the leave would commence. This means that CFRA and FMLA leave normally run together, so the total time taken is a maximum of 3 months. However, SB 135 eliminates the threshold number of hours and reduces the 12-month requirement to 180 days. This is a significant issue because California cannot preempt or limit the application of federal law under FMLA. In other words, simply because the employee already took leave under CFRA does not negate their ability to then qualify for FMLA leave as well.

An employee could work any number of hours in a 180-day period prior to taking CFRA leave (which would not trigger FMLA), and upon returning to work, the employee would still have the opportunity to qualify for another 12-week protected leave of absence under FMLA once he or she reaches the 1,250 hours worked threshold. Thus, a California employer with 50 or more employees could potentially be required to provide up to 24 weeks of protected leave in one year for a single employee.

1. SB 135 Creates the Potential for Employers to Provide 10 Months of Protected Leave for Larger Employers When Pregnancy-Related Leave Is Involved: Similarly, employers with 50 or more employees already have to provide up to 4 months of PDL/FMLA plus + 3 months child bonding leave under CFRA/FMLA. While employees who work 1,250 hours over a 12-month period currently receive this benefit through either FMLA or CFRA, SB 135 expands the potential 7-month leave to those that only work for 180 days but fewer than 1,250 hours. An employee could work any number of hours in a 180-day period prior to taking PDL/CFRA (which would not trigger FMLA) and upon returning to work; the employee would still have the opportunity to qualify for another 12-week protected leave of absence under FMLA once the 1,250 hours worked threshold is reached. This bill creates the opportunity for two, separate 12-week leaves of absence, in addition to pregnancy disability leave, thereby creating a potential leave of absence of 10 months.
2. SB 135 Significantly Expands the Scope of Leave Beyond Immediate Family Members: SB 135 greatly expands the list of individuals for which a worker can take time off to not only include a child of a domestic partner, a child-in-law, parent-in-law, grandparent, grandchild, or sibling, but also a designated person. Because a “designated person” may not be a family member covered under FMLA, it creates the same burden of layering leaves of absence on an employer who has 50 or more employees. Specifically, if an employee identifies a best friend as a “designated person” to take 12 weeks of protected leave, that best friend is not a covered member under FMLA. Accordingly, the employee could take leave under SB 135 for 3 months, return to work, and then take another 3 months off under FMLA for the employee’s or family member’s medical condition.
3. SB 135 Increases Costs and Exposes Employers to Devastating Litigation: Even though the leave under SB 135 is not “paid” by the employer, that does not mean the employer will not endure added costs. While on leave, the employer will have to: (1) maintain medical benefits while the employee is on leave; (2) pay for a temporary employee to cover for the employee on leave, usually at a higher premium given the limited duration of employment; or (3) pay overtime to other employees to cover the work of the employee on leave. The cost of overtime is higher given the increase of the minimum wage, which will add to the overall cost especially for small employers.

Additionally, 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, could pursue a claim against the employer seeking compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees.

1. California Already Imposes Numerous Family Friendly Leaves of Absence on Employers: California is already recognized by the National Conference of State Legislatures as one of the most family friendly states given its list of programs and protected leaves of absence, including: paid sick days, school activities leave, kin care, paid family leave program, pregnancy disability leave, and the California Family Rights Act. This list is in addition to the leaves of absence required at the federal level. Imposing another 12-week leave of absence is simply too much for employers to bear, especially small employers.

7. Prior Legislation:

SB 1123 (Jackson), Chapter 849, Statutes of 2018, expanded the Paid Family Leave Program to include time off to participate in a qualifying exigency related to the covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces of the United States, as specified.

SB 63 (Jackson), Chapter 686, Statutes of 2017, enacted the New Parent Leave Act prohibiting an employer, of 20 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.

AB 908(Gomez) Chapter 5, Statutes of 2016, among other things, revised the formula for determining benefits pursuant to the State Disability Insurance program and the Paid Family Leave program to increase benefits to workers providing a wage replacement of approximately 60 to 70 percent, depending on income, as specified.

SB 406(Jackson) of 2015, would have expanded various provisions under 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, expanded the scope of PFL to include time off to care for seriously ill siblings, grandparents, grandchildren, and parents-in-law.

SUPPORT

California Employment Lawyers Association (Co-Sponsor)

First 5 California (Co-Sponsor)

Legal Aid at Work (Co-Sponsor)

A Stronger California

AARP California

ACLU California

Alzheimer’s Association

Bet Tzedek Legal Services

Breastfeed LA
California Teachers Association
Equal Rights Advocates

California Breastfeeding Coalition

California Child Care Resource & Referral Network

California Food Policy Advocates

California Legislative Women’s Caucus

California Partnership to End Domestic Violence

California WIC Association

California Women’s Law Center

California Work & Family Coalition

Child Care Law Center

Community Medical Centers

Congress of California Seniors

Disability Rights Legal Center

Eisner Health Clinic

Friends Committee on Legislation of California

Human Impact Partners (HIP)

Korean Immigrant Workers Alliance

Maternal and Child Health Access

Maternal Mental Health NOW

Mi Familia Vota

Orange County Equality Coalition

PLUS Paid Leave for the U.S.

Prevention Institute

Santa Clara Valley Medical Center

Siskiyou Breastfeeding Taskforce

Tiburio Vasquez Health Center WIC Program

UCLA Student Health Education & Promotion

USC Family Support Center

Women for: Orange County

OPPOSITION

Auto Care Association

Brea Chamber of Commerce

California Ambulance Association

California Chamber of Commerce

California Employment Law Council

California Farm Bureau Federation

California League of Food Producers

California Manufacturers and Technology Association

Camarillo Chamber of Commerce

CAWA – Representing the Automotive Parts Industry

El Centro Chamber of Commerce

El Dorado Hills Chamber of Commerce

Family Business Association of California

Greater Bakersfield Chamber of Commerce

Greater Coachella Valley Chamber of Commerce

Greater Conejo Valley Chamber of Commerce

League of California Cities

Murrieta/Wildomar Chamber of Commerce

North Orange County Chamber

Official Police Garages of Los Angeles

Rancho Cordova Chamber of Commerce

San Fernando Valley Chamber of Commerce

San Gabriel Valley Economic Partnership

Southwest California Legislative Council

Torrance Area Chamber of Commerce

Western Growers Association

Palm desert Area Chamber of Commerce

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