California employers are subject to both state and federal labor laws for paid family leave. Now it appears there may be new changes that will impact even more employers.

A proposal to expand the state’s parental leave protections to small-business employees passed the state Senate, despite Gov. Jerry Brown’s opposition to a very similar measure last year.

The bill, SB 63,  was introduced by Sen. Hannah-Beth Jackson (D-Santa Barbara) who noted that “Two-point-seven million more Californians will benefit from this measure. Family lives have changed dramatically in recent decades, but our policies have remained frozen in time.”

However, in 2016, Governor Brown vetoed SB 654, a nearly identical bill also written by Sen. Jackson.

In his veto message the governor acknowledged the importance of family leave time for parents but wrote that he was concerned “about the impact of this leave, particularly on small businesses and the potential liability that could result.” 

Under the Family Medical Leave Act, employers of 50 or more, are required to provide up to 12 weeks of unpaid time off per year for qualified employees to either bond with a new child, or care for an ill family member.

The new legislation would require businesses that employ between 20 and 50 workers to provide their employees with 12 weeks to spend with a new child, and guarantee their employment when they return. However, this bill does not require the leave to be paid.

The concern for many smaller business owners, and the Senate Republicans who voted against the measure, is the potentially crippling costs associated with the provisions. In addition, there is the potential of jobs being cut to bring a business under the 20 employee threshold, which could also spell trouble for those employers.

According to a post on the FindLaw blog,

For some small businesses, if the new law passes, operational changes could help to avoid being required to comply. For example, businesses that employ just a few more than 20 employees can evaluate staffing needs and cut down to 19. Work can be outsourced to independent contractors or third party vendors to help reduce the workforce.

If it appears obvious that you are conducting layoffs to stay clear of any government compliance matters, employees may feel unfairly singled out for termination, which can result in wrongful termination claims.

Current California Paid Parental Leave

On the California labor law level there are changes to the leave benefits currently being provided under the state’s Paid Family Leave program. Beginning on January 1, 2018, the wage replacement rate will increase from 55 percent to 70 percent for those earners below one-third of California’s average weekly wage and to 60 percent for those who earn more than one-third of the weekly wage.

The State Average Weekly Wage (SAWW) for California, as determined by the United States Department of Labor for the first quarter of 2017, is $1172.57.

Local Regulations

On January 1, 2017 San Francisco’s Paid Parental Leave for Bonding with New Child Ordinance went into effect. The comprehensive ordinance requires employers to provide six weeks of fully paid parental leave for the purpose of bonding with a new child. The mandate also requires employers with 50 or more employees to provide supplemental compensation so that employees receive 100 percent of their salary during their leave.

Smaller employers in San Francisco have already begun to feel the impact of this ordinance. Since July 1, 2017 companies with 35 to 49 employees have been required to comply with the paid parental leave requirements, and on January 1, 2018, the mandate will include all employers with just 20 to 34 employees.

For those companies that fail to comply, they will be subject to penalties that include mandatory reinstatement if the employee was fired, any back-pay, injunctive relief, and attorneys’ fees, as well as and additional $50 per employee for each day of a violation.

In addition, the San Francisco ordinance also prohibits employers from interfering with an employee’s right to request or apply for Paid Family Leave.  Employers cannot threaten discharge, demote, discriminate or discharge employees who take the leave. In addition, employers cannot prevent an employee from informing any person of an employer’s alleged violation, and informing others of their rights under the ordinance.

HR Management and HR Compliance

In addressing the role of HR in regards to family leave and other related types of employee absences, the Society for Human Resource Management (SHRM) notes that,

Compliance with these laws is critical for any organization with employees in California because liabilities for noncompliance can be costly from legal, employee relations and employer brand perspectives. 

HR's Role

The HR professional's role in managing leaves of absence in California is as follows:

• Understand the relevant employment laws in California and employers' legal responsibilities.

• Educate managers to recognize when employees' absences may fall under a leave law and to communicate such absences with HR.

• Ensure that organizational policies comply with the laws.

• Understand the interaction of such laws with other state and federal laws.

• Communicate and assist employees in exercising rights under the laws.

Changes in regulations expand the potential of risk for employers, require new workplace postings, or mandate updates to existing workplace policies. We recommend that all employers consult with experienced employment counsel to ensure compliance.

Accurate and timely management and compliance practices are required for every business and every payroll professional. But there are options.

Accuchex, a reputable payroll management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially prove to be a more cost-effective solution, as well.

Click the button below to learn what you need to know about labor law in California. For more immediate information, feel free to call Accuchex Payroll Management Services at 877-422-2824.