California Paid Family Leave Update

Last week, California's Governor signed into law AB 908, which established that, beginning January 1, 2018, it increases the wage replacement rate for employees receiving disability insurance and/or paid family leave benefits through the state. Effective January 2018, this amount will increase from the current 55% to 60 or 70% of the employee's compensation, depending on the employee's income level.  The new law will also eliminate the 7-day waiting period for receipt of paid family leave benefits.

San Francisco's Board of Supervisors passed an ordinance on April 5, 2016 that will require most San Francisco employers to start filling up the gap between an employee's paid family leave benefit and the employee’s regular compensation. It only applies to leave taken to spend time with a new child for whom the employee is eligible for and receiving paid family leave benefits through the state and is for up to 6 weeks. This ordinance will apply to employers with 50 or more employees effective January 1, 2017, to employers with 35 or more employees effective July 1, 2017, and to employers with 20 or more employees effective January 1, 2018.

Employees will be eligible for this paid leave benefit if (1) they have worked for the employer for at least 180 days; (2) they perform at least 8 hours of work per week in San Francisco; and (3) at least 40% of their total weekly hours are worked in San Francisco. The law establishes certain means for determining employee eligibility where an employee's work hours fluctuate as well as means for determining the amount of supplemental compensation to pay the employee where the employee's pay fluctuates.

Under this San Francisco ordinance, employers can require an employee to apply up to two weeks of accrued, unused vacation to help the employer meet its obligations. If the employee refuses to use vacation, then the employee is not eligible for any supplemental compensation from the employer.

The employee also must agree to reimburse the employer for the full amount of paid leave paid by the employer, if the employee voluntarily terminates employment within 90 days of the end of the leave.

The ordinance provides for both administrative enforcement and the initiation of private civil actions. A required notice will be made available for posting by January 1, 2017. Employers must keep records of supplemental compensation paid under the ordinance for 3 years.

Contact The Law Office of Alex Tovarian

If you need more information to determine whether you are eligible for the benefits of this new Ordinance, contact Alex Tovarian, employment attorney at Tovarian Law for a free consultation.