Employer Obligations Under the New San Francisco Paid Parental Leave Ordinance

On April 12, 2016, the San Francisco Board of Supervisors voted to finally pass the “Paid Parental Leave Ordinance,” setting San Francisco on the path to becoming the first U.S. city to require fully paid parental leave (up to a maximum weekly benefit amount).  The Ordinance is expected to be signed by Mayor Edwin Lee soon and become operative on January 1, 2017.

Under the Ordinance, eligible San Francisco employees will be entitled to receive 6 weeks of fully paid leave to bond with a newborn baby, newly adopted child or new foster child (“bonding leave”).  Currently, California employees may receive up to 55% of their total normal gross weekly pay (subject to a maximum weekly benefit limitation) for 6 weeks in any 12-month period for bonding leave or to care for a seriously ill family member under the California Paid Family Leave (“PFL”) program.  The San Francisco Paid Parental Leave Ordinance requires employers to pay the 45% remainder not provided by PFL so that employees who are taking bonding leave receive 100% of their total normal gross weekly pay for 6 weeks (subject to a maximum weekly benefit limitation).

Covered Employers.  Paid parental leave will be phased in over 12 months.  Beginning on January 1, 2017, San Francisco employers with at least 50 employees must begin complying with the Ordinance.  As of July 1, 2017, the Ordinance will apply to employers with at least 35 employees, and employers with at least 20 employees will be subject to the Ordinance beginning on January 1, 2018.  For purposes of determining an employer’s size, all employees are counted, regardless of location.

Covered Employees.   An employee (including a part-time or temporary employee) is eligible to receive paid parental leave if he/she:

  • Is employed by a covered employer;
  • Started working for the covered employer at least 180 days prior to the start of the requested leave period;
  • Performs at least 8 hours of work per week for the covered employer within San Francisco;
  • Performs at least 40% his/her total weekly hours for the covered employer within San Francisco; and
  • Is eligible to receive PFL benefits from the State of California for the purpose of bonding leave.

Maximum Weekly Benefit Limitation.  The PFL program places a cap on the weekly benefit amount higher-earning workers may receive.  The Ordinance places a proportionally similar cap on weekly paid parental leave benefits an employee may receive.  For example, under the current 2016 PFL rates, an employee’s maximum weekly benefit amount is $1,129, which represents 55% of a person’s weekly wages based on an annual salary of approximately $106,740 (or $2,053 per week, rounded to the nearest dollar).  Using these same rates, a San Francisco employer’s maximum weekly paid parental leave obligation would be $924 per week (45% of $2,053, rounded to the nearest dollar).

Impact of New Legislation Signed by California Governor Jerry Brown, AB 908:  On April 11, 2016, Governor Jerry Brown signed legislation that will, as of January 1, 2018, increase the wage replacement rate under the State Disability Insurance and Paid Family Leave programs from its current level of 55% to 60% or 70%, depending on the employee’s income.  Once the higher wage replacement rates take effect, the employer paid parental leave obligation will decrease by a corresponding amount.

Required Use of Accrued Vacation. An employer may require that an employee use up to two weeks of unused, accrued vacation as an offset to the employer’s obligation to provide paid parental leave.  Employers are currently permitted under California law to require an employee to use up to two weeks of unused, accrued vacation as a precondition to the employee’s initial receipt of PFL benefits.  If the employer exercises that option under State law, the employee must first take two weeks of vacation before starting the six-week family leave period, resulting in a total of eight weeks of leave.  The Ordinance would not prevent an employer from exercising that option, but would provide another option for the employer in addition to, or in lieu of, the State option, depending upon the amount of unused vacation leave that the employee has accrued.

Employee Obligations.  As a precondition to receiving paid parental leave, the employee must provide the employer with either a copy of the employee’s Notice of Computation of California Paid Family Leave Benefits (or other legally authorized statement) or provide the State of California with written authorization to disclose the weekly benefit amount to the employer.  Failure to comply with this requirement relieves the employer of the obligation to provide paid parental leave.

Termination Prior to or During Leave Period.  If an employer terminates an employee prior to the start of the employee’s leave period, but within 90 days of the employee requesting or applying for PFL, there is a rebuttable presumption that the employee was terminated in order for the employer to avoid its paid parental leave obligations.  Unless the employer rebuts the presumption with clear and convincing evidence that the termination was solely for a reason other than to avoid its paid parental leave obligation, the employer must pay the terminated employee parental leave benefits during the leave period.  In addition, if an employer terminates an employee while he/she is receiving paid parental leave benefits, the employer must continue to pay paid parental leave benefits for the remainder of the leave period.

Reimbursement.  As a precondition to receiving paid parental leave, the employee must sign a form (to be provided by the Office of Labor Standards Enforcement) agreeing to reimburse the full amount of the paid parental leave benefits received if the employee voluntarily separates from employment within 90 days of the end of the employee’s leave period and the employer requests such reimbursement in writing.

Posting and Records Retention.  The Ordinance directs the OLSE to draft a notice informing employees of their rights under the Ordinance.  Beginning January 1, 2017, covered employers must post the notice at any workplace or job site where a covered employee works. Covered employers must retain records documenting paid parental leave benefits provided to employees for a period of 3 years.

Enforcement and Penalties. The Ordinance provides for both administrative and civil enforcement.  Administrative enforcement by the OLSE may include (without limitation): payment of the parental leave benefits unlawfully withheld and an administrative penalty of at least $250 or three times the amount of paid leave benefits unlawfully withheld, whichever is greater. In addition, if a violation results in harm to or violates the rights of anyone under the Ordinance (such as the failure to post the required notice), the OSLE may order the employer to pay an administrative penalty of $50 to each aggrieved person for each day that the violation occurred. 

The OLSE, an aggrieved employee, or any person acting behalf of the public may bring a civil action for legal and equitable remedies, including reinstatement, back pay, damages, liquidated damages equal to the administrative penalties detailed above, attorney’s fees and costs.

For a full text of the Ordinance, please click here.

Please note that this summary is not intended to constitute legal advice. 

If you have questions regarding compliance with the San Francisco Paid Parental Leave Ordinance or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.

California’s New FEHA Regulations Mandate Specific Harassment, Discrimination and Retaliation Prevention Policies

The Fair Employment and Housing Council recently adopted amendments to the Fair Employment and Housing Act (“FEHA”) regulations.  The amendments, which take effect on April 1, 2016, require that employers develop and distribute harassment, discrimination and retaliation prevention policies that contain certain required elements. 

California employers have an affirmative obligation under FEHA to create a workplace environment that is free from discriminatory, harassing and retaliatory conduct.  To that end, the new regulations require that employers adopt written harassment, discrimination and retaliation prevention policies that:

  • List all current protected categories covered under FEHA. 
  • Indicate that coworkers and third parties, as well as supervisors and managers, with whom the employee comes into contact are prohibited from engaging in discriminatory, harassing or retaliatory conduct.  
  • Create a complaint process to ensure that complaints are kept confidential, to the extent possible; receive a timely response; are impartially and timely investigated by qualified personnel; and are documented and tracked for reasonable progress.  In addition, the complaint process must provide for appropriate options for remedial action and timely closure. 
  • Provide a complaint process that does not require an employee to complain directly to his or her immediate supervisor. 
  • Require supervisors to report any complaints of misconduct to a designated company representative, such as a human resources manager.
  • Indicate that when an employer receives a complaint, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected. 
  • State that confidentiality will be kept by the employer to the extent possible. 
  • Indicate that appropriate remedial measures will be taken if, at the end of the investigation, misconduct is found. 
  • Make clear that employees will not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation. 

Harassment, discrimination and retaliation prevention policies must be disseminated to all employees.  The regulations provide for dissemination using one or more of the following methods:  

  • Printing and providing a copy to all employees with an acknowledgment form for the employee to sign and return; 
  • Sending the policy via e-mail with an acknowledgment return form; 
  • Posting current versions of the policies on a company intranet with a tracking system  ensuring all employees have read and acknowledged receipt of the policies; 
  • Discussing policies upon hire and/or during a new hire orientation session; and/or 
  • Any other way that ensures employees receive and understand the policies. 

Employers must translate the written policy into every spoken language that is used by at least 10% of the workforce at any facility or establishment.

California employers should ensure that they have written policies that comply with the new regulations prior to April 1, 2016.  For a full text of the regulations, please click here.  Please feel free to contact us if you would like assistance with updating your policies.

Please note that this summary is not intended to constitute legal advice. 

If you have questions regarding compliance with California’s Fair Employment and Housing Act or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.

2015 End-of-Session Bills Signed by Governor Brown

At the close of the legislative session, California Governor Jerry Brown signed into law a number of important employment bills, including SB 358 targeting California’s gender wage gap, and AB 622 barring employers from abusing the E-Verify system.  Below is a summary of the bills that apply generally to private employers. All are effective January 1, 2016, unless otherwise indicated.

 

California’s Fair Pay Act: SB 358

On October 6, 2015, Governor Brown signed SB 358 (California’s Fair Pay Act) (the “Act”) which amends Labor Code Section 1197.5. The Act strengthens California’s existing equal pay provisions and wage transparency law.  It eliminates previous language restricting wage comparisons between jobs within an “establishment,” and protects inquiries about wages.

For more information see our detailed legal update on SB 358 which can be found here.

 

E- Verify Abuse: AB 622

AB 622 adds Section 2814 to the California Labor Code, and makes it unlawful for an employer to use E-Verify to check the employment authorization status of an existing employee or applicant who has not been offered employment, except as required by federal law or as a condition of receiving federal funds. The law does not prohibit employers from using the E-Verify, in accordance with federal law, to check the employment authorization status of a person who has been offered employment.  It describes the process an employer should follow when receiving a tentative non-confirmation from the Social Security Administration or Department of Homeland Security. Violation of the law carries a civil penalty of up to $10,000 per violation.

 

Child Care Provider and Kin Care Leave: SB 579

SB 579 Expands the Provisions of the Family-School Partnership Act and California’s Kin Care Law, and amends Sections 230.8 and 233 of the California Labor Code.

Labor Code Section 230.8, or the Family-School Partnership Act (the “Act”), currently provides up to 40 hours of leave each year to parents so that they can participate in their children’s school or “licensed day care facilities” activities. SB 579 replaces the phrase “licensed child day care facility” with “licensed child care provider” and expands the purposes for taking leave to include finding, enrolling or reenrolling a child in school or with a licensed child care provider. SB 579 also permits employees to take leave to address specified child care provider or school emergencies. Notably, the law’s protections will now extend beyond parents, guardians or grandparents having custody to include stepparents, foster parents and persons who stand in loco parentis to a child.

SB 579 also amends California’s Kin Care law, Labor Code Section 233, by permitting employees to use kin care for the reasons specified under California’s Healthy Workplaces, Healthy Families Act (otherwise known as California’s paid sick leave law) and provides that “family member” has the same meaning as under California’s paid sick leave law.

 

Religious and Disability Retaliation: AB 987

AB 987 amends Section 12940 of the California Government Code, and makes it unlawful to retaliate against individuals who request a reasonable accommodation on the basis of religion or disability, regardless of whether the request for accommodation was granted.

 

Retaliation for Family Member’s Protected Conduct: AB 1509

AB 1509 amends California Labor Code Sections 98.6, 1102.5, 2810.3, and 6310, and expands the protections of these laws to an employee who is a family member of a person who engaged in, or was perceived to engage in, protected conduct under these statutes or who makes a complaint protected by these laws. AB 1509 applies to “client employers,” such as employers who use labor from temporary service agencies.

Section 2810.3, enacted last year, requires client employers to share all civil legal responsibility and liability with labor contractors for workers supplied by the labor contractor for the payment of wages and the failure to obtain valid workers compensation coverage. It prohibits client employers from shifting workplace safety duties and liabilities to the labor contractor. Certain client employers are excluded from liability under 2810.3. AB 1509 expands the exclusions to certain client employers who use a third-party household goods carrier, or who are household goods carriers.

 

PAGA Cure: AB 1506

AB 1506 amends the California Private Attorneys General Act (PAGA). PAGA allows a private citizen to “step into the shoes” of the attorney general to pursue civil penalties on behalf of the State for violations of the Labor Code.  AB 1506 requires employees to give employers an opportunity to cure wage statement violations concerning the inclusion of the start and end date of each pay period and the employer’s name and address on the pay statement, before pursuing a PAGA claim.

AB 1506 is an urgency statute and went into effect on October 2, 2015.

For more information see our detailed legal update on AB 1506 which can be found here.

 

Labor Commissioner’s Authority Over Local Laws and Expense Reimbursement Penalties: AB 970

AB 970 amends Sections 558, 1197 and 1197.1 of the California Labor Code, and authorizes the Labor Commissioner to investigate and enforce local laws regarding overtime hours or minimum wage provisions, upon request from a local entity, and to issue citations and penalties, provided the local entity did not cite the employer for the same violation.

In addition, AB 970 amends Labor Code Section 2802 by authorizing the Labor Commissioner to issue citations against and recover penalties from employers who violate their Section 2802 expense reimbursement obligations.

 

Labor Commissioner’s Authority to Collect Unpaid Judgments: SB 588

SB 588 adds Sections 690.020 through 690.050 to the California Code of Civil Procedure and Sections 96.8, 238, 238.1, 238.2, 238.3, 238.4, 238.5 and 558.1 to the California Labor Code. SB 588 also amends Section 98 of the California Labor Code. SB 588 is designed to enhance the Labor Commissioner’s ability to enforce wage theft laws and to collect on outstanding judgments for nonpayment of wages.

SB 588 includes the following enforcement tools, among others, for collecting outstanding unpaid judgments for nonpayment of wages:

  • Requirement that businesses purchase a wage bond of up to $150,000
  • Failure to purchase the wage bond subjects the employer to a stop work order or placement of a lien by the Labor Commissioner on any of the employer’s property in California
  • Failure to observe a stop order can lead to an employer, owner, director, officer, or managing agent of the employer being guilty of a misdemeanor and/or payment of a fine up to $10,000.

In addition, SB 588 also imposes liability for specified wage and hour violations on not just employers, but also persons acting on behalf of employers, such as owners, directors, officers, or managing agents of the employer.

 

Please note that this summary is not intended to constitute legal advice. 

If you have questions regarding compliance with these new California laws or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.

Right to Cure Certain Wage Statement Violations Under PAGA

On October 2, 2015, Governor Brown signed AB 1506, amending the California Private Attorneys General Act (PAGA), effective as of that date. Before an employee can bring a PAGA claim against an employer for certain wage statement violations, the employer will have an opportunity to cure the violation.

PAGA allows employees to stand in the shoes of the California Attorney General to recover civil penalties through a representative civil lawsuit for violations of certain Labor Code provisions. As amended, PAGA now requires that employees give employers the opportunity to cure certain violations of California Labor Code Section 226a. Before AB 1506, employers did not have the right to cure any violations of Section 226a, which requires specific information to be shown on wage statements, including the start and end date for each pay period and the employer’s name and address. Under AB 1506, employers have the opportunity to cure these two types of violations before an employee may bring a valid PAGA claim.

Specifically, AB 1506 provides:

  • Right to Cure Certain Wage Statement Violations:  Employers have the right to cure violations alleging that wage statements do not show:
    • the inclusive dates of the pay period
    • the name and address of the legal entity that is the employer
  • Timing for Cure:  The employee must give written notice of the alleged violation to the employer and the Labor and Workforce Development Agency. The employer will then have the right to cure the violation within 33 calendar days of the postmark date of the notice. The employer shall give written notice by certified mail within that period of time to the aggrieved employee or representative and the Agency if the alleged violation is cured, including a description of actions taken.  If the alleged violation is not cured within the 33-day period, the employee may commence a PAGA action.
  • Proof of Cure:   To prove the violation has been cured, employers must show that the employer has provided a fully compliant, itemized wage statement to each aggrieved employee for each pay period for the three-year period prior to the date of the employee’s written notice of the violation.
  • Limitations on Cure:  Employers may not exercise the right to cure under AB 1506 more than once in a 12-month period for the same violation or violations contained in the notice, regardless of the location of the worksite.
  • Effective Date:  AB 1506 is an urgency statute and went into effect immediately.

For the full text of AB 1506, please click here.

Please note that this summary is not intended to constitute legal advice. 

If you have questions regarding AB 1506  or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.

California's Fair Pay Act

On October 6, 2015, Governor Brown signed the California Fair Pay Act (SB 358) (the “Act”), amending Section 1197.5 of the California Labor Code. The Act strengthens California’s existing equal pay provisions and wage disclosure laws.  The Act will take effect January 1, 2016.

Equal Pay Provisions

Section 1197.5 of the Labor Code previously prohibited employers from paying different wages to employees of the opposite sex “in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.”

The Act changes the “equal work” standard, and instead requires that employers pay employees of the opposite sex equal wages “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”  The Act also eliminates the “same establishment” language, which opens up the possibility of comparing employees’ pay in different “establishments.”

The Act retains exceptions for wage differentials adopted pursuant to one or more of the following factors, provided the factors are applied reasonably and account for the entire wage differential:

  • a seniority system,
  • merit system,
  • a system which measures earning by quantity or quality of productions, OR
  • any bona fide factor other than sex, such as education, training or experience.  The bona fide factor other than sex must be job related and consistent with business necessity, and must not be based on or derived from a sex-based differential in compensation. The bona fide factor other than sex defense fails if an employee can demonstrate that an alternative business practice exists that would serve the same business purpose without producing wage differentials

The Act prohibits employers form retaliating against an employee for exercising the rights provided by the Act.

Remedies include the wage difference, interest, an equal amount for liquidated damages, and attorneys’ fees and costs.  Records must be kept for three years, instead of the two previously required. The statute of limitations for an action to recover wages is 2 years from after the cause of action occurs, or 3 years if the violation is willful.  An action to for a violation of the anti-retaliation provisions is 1 year.

Wage Disclosure Provisions

The Act expands the protections afforded by Labor Code Section 232, which prohibits discriminating against an employee for disclosing his or her wages. Under the Act, employers must not “prohibit an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under” Section 1197.5. The Act specifies, however, that nothing in Section 1197.5 creates an obligation to disclose wages.  Remedies include reinstatement, reimbursement for lost wages and benefits, interest, and equitable relief. The statute of limitations for a violation of the wage transparency requirements is 1 year.

For the full text of the California Fair Pay Act (SB 358), please click here.

 

Please note that this summary is not intended to constitute legal advice. 

If you have questions regarding compliance with the California Fair Pay Act or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.

Legal Disclaimer

Legal Disclaimer and Notice:
These updates have been prepared by Daijogo & Pedersen, LLP for informational purposes only and are not legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. Information on this website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.