San Francisco, California: Important Amendments to Paid Parental Leave Ordinance

APPLIES TO

All Employers with 50+ San Francisco, CA Employees

EFFECTIVE

January 1, 2017

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(888) 378-2456

Earlier this year, we reported on San Francisco’s bill requiring 6 weeks of fully paid parental leave.  The Paid Parental Leave Ordinance (“PPLO”) was recently amended to provide clarity on an employer’s obligations for supplementing compensation.

First, the amount of supplemental compensation has been amended to recognize California’s recent increase to the wage replacement portion of the paid family leave (“PFL”) program.

  • Employees with a PFL claim beginning on or after January 1, 2016 are entitled to receive up to 55% of their weekly wages.
  • Claims beginning on or after January 1, 2018 will allow high income workers to receive up to 60% of their weekly wages; low income workers may receive up to 70% of their weekly wages.
  • The amendments acknowledge that the gradual increase in California’s PFL program will correspondingly decrease the PPLO supplemental compensation requirement.

Second, the amendments provide more insight into calculating an employee’s average weekly hours to determine if an employee is covered by the ordinance and supplemental compensation rate.

  • Under the PPLO, an employee must work at least eight hours per week for an employer based in San Francisco, and 40% of the time must be worked in San Francisco. If an employee has a fluctuating workweek, the employer uses a three month look-back period to determine coverage.
  • The amendments specify that periods of unpaid or partially paid leave are not counted when calculating an employee’s eligibility. Any pay periods in which such leave is taken are excluded from the look-back period, and the preceding period in which unpaid or partially paid leave was not taken is included for the purpose of calculation.

Third, under the original PPLO, an employee had to present certain documentation to receive supplemental compensation.  The amendments provide employers more flexibility to process the supplemental compensation.

  • Employees working for multiple employers no longer need to provide each employer with a copy of the Notice of Computation of California PFL Benefits (or other legally authorized statement). Instead, employees need only provide information about wages received from all employers within 90 days before the leave period.
  • The amendments also state employees may now provide their employer a written authorization for the state of California to disclose their weekly benefit amount to the employer (as opposed to the Notice of Computation of California PFL Benefits). This authorization will allow employers to request and obtain information about the employee’s wage replacement rate, which in turn allows employers to calculate the amount of supplemental compensation they must provide.

Fourth, the amendments clarify the time period an employer is responsible for providing supplemental compensation when employment is terminated.

  • Previously, employers had to provide supplemental compensation for the entire duration of the employee’s PFL period, even if the employee separated from employment.
  • The amendments now clarify that employers need provide supplemental compensation only up to the time the employee actually receives PFL benefits. This closes a potential loophole where employers may have had to provide supplemental compensation for separated employees who could apply for PFL but did not take it until after their employment ended.

 Last, the amendments broaden the anti-retaliation provision.

  • Previously, an employer’s reduction of an employee’s wages within 90 days of the employee’s request for PFL created a rebuttable presumption that the decrease was intended to reduce the amount of supplemental compensation the employer needed to provide.
  • The amendments now apply that presumption within 90 days of an employee notifying their employer of their intent to apply or use PFL. Thus, the time period in which an employee’s wages cannot be reduced could be much longer, if an employee gives notice long before applying for or using the PFL benefit.

Action Items

  1. Review any existing income replacement benefits for integration with the PPLO supplemental compensation requirement.
  2. Train personnel, who make wage adjustment decisions, on the expanded anti-retaliation provision.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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