San Francisco, CA to Require 6 Weeks of Fully Paid Parental Leave

Beginning January 1, 2017, San Francisco employers of 50 or more must begin providing a “Supplemental Contribution” alongside California’s Paid Family Leave program.  The current California Paid Family Leave program, which is worker-funded, provides employees up to 55% of their regular wages for 6 weeks, with a maximum cap of $1,129 per week.

San Francisco’s new bill requires employers to pay the employee up to the remaining 45% of their wages during the 6 week leave, equaling 100% of the employee’s gross weekly wage, when combined with the statewide benefit.  The Supplemental Contribution will be proportionately capped by reference to the state maximum weekly benefit.   In passing this legislation, San Francisco has become the first city in the United States to require fully paid parental leave.

Eligibility

To be eligible for this law, an employee must have (1) been employed for at least 180 days prior to the start of the leave, (2) work at least 8 hours per week for the employer in San Francisco and 40% of whose total weekly hours are worked in San Francisco, and (3) is eligible to receive Paid Family Leave under the state program for purposes of bonding with a new child.

This regulation has a staggered phase-in effective date based on company size as described below.

Small businesses with fewer than 20 employees are exempt.  Note that the headcount is based upon total employee headcount, not just how many employees work in San Francisco.

Notice, Posting and Recordkeeping Requirements

The San Francisco Office of Labor Standards and Enforcement (OLSE) will publish a notice regarding employees’ rights under the Ordinance by the first operative date.  Employers must post the notice in a conspicuous location at any workplace that covered employees operate in.  The notice must be posted in any language spoken by more than 5% of the employees at the workplace.  Furthermore, employers must retain records of Supplemental Contribution payments for a period of 3 years, and make such records available to the OLSE upon request.

Changing State Law

Note that Governor Brown recently signed AB 908, which increases the wage replacement benefit provided by the Paid Family Leave Program, on or after January 1, 2018.  The Program will provide increased compensation up to 60 or 70% of the employee’s weekly wages, depending on income level, which may affect how much a covered San Francisco employer must pay for the Supplemental Contribution.