BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                 Ted W. Lieu, Chair

          Date of Hearing: April 10, 2013              2013-2014 Regular  
          Session                              
          Consultant: Deanna D. Ping                   Fiscal:No
                                                       Urgency: No
          
                                   Bill No: SB 761
                                 Author: DeSaulnier
                      As Introduced/Amended: February 22, 2013
          

                                       SUBJECT
          
                        Family temporary disability insurance


                                      KEY ISSUE

          Should the legislature include retaliation protections for  
          employees that have applied for, used, or indicated intent to  
          apply for or use, family temporary disability insurance  
          benefits? 


                                      ANALYSIS
          
           Existing law  established a family temporary disability insurance  
          program, Paid Family Leave (PFL), that provides up to six weeks  
          of wage replacement benefits to workers who take time off work  
          to care for a seriously ill child, spouse, parent, or domestic  
          partner, or to bond with a minor child in connection with foster  
          care or adoption. (Unemployment Insurance Code §3301) 

           Existing law  states that an individual is eligible to receive  
          temporary disability insurance benefits equal to one-seventh of  
          his or her weekly benefit amount for each full day during which  
          he or she is unable to work due to caring for a seriously ill or  
          injured family member or bonding with a minor child within one  
          year of the birth or placement of the child in connection with  
          foster care or adoption. (Unemployment Insurance Code §3301)

           Existing law  states that no more than six weeks of family  
          temporary disability insurance benefits shall be paid within a  
          12-month period and requires employees to use up to two weeks of  









          accrued vacation leave before they begin receiving benefits. 
          (Unemployment Insurance Code §3301)

           Existing law, under the California Family Rights Act (CFRA),   
          entitles eligible employees of covered employers to take  unpaid,  
          job-protected  leave for specified family and medical reasons.  
          Eligible employees are entitled to: 

                 Twelve workweeks of leave in a 12-month period for: 
                  o         Bonding with a newborn or adopted child
                  o         Caring for a family member with a serious  
                    health condition (includes parent, spouse, child,  
                    registered domestic partner and same sex spouse)
                  o         The employee's own serious health condition  
                    (excluding pregnancy).

                 Eligible employees must meet the following conditions:
                  o         worked more than 12 months of service with the  
                    employer, and who has at least 1,250 hours of service  
                    with the employer during the previous 12 month period
                  o         worked at a location in which the employer has  
                    at least 50 employees within 75 miles of the  
                    employee's worksite.  
                 (Gov Code §12945.2)

           Existing federal law, under the Family and Medical Leave Act  
          (FMLA  ), also entitles eligible employees to take  unpaid,  
          job-protected  leave for up to  12 weeks  . This leave, granted  
          under both the state CFRA and the federal FMLA must be taken  
          concurrently. (§105 of the FMLA and §825.220 of FMLA  
          regulations)

           Existing law  states that upon granting an employee family leave  
          under CFRA or FMLA, the employer must guarantee reinstatement to  
          the same or comparable position and provide the guarantee in  
          writing upon the request of the employee. (Gov Code §12945.2)

           Existing law  states than an employer shall not refuse to hire,  
          and shall not discharge, suspend, expel, or discriminate  
          against, any individual's exercise of the right to family care  
          leave as underlined in CFRA. (Gov Code §19702.3)

          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 2

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           Existing federal law  under the FMLA prohibits an employer from  
          discriminating or retaliating against an employee or prospective  
          employee for having exercised or attempted to exercise any FMLA  
          right. (§105 of the FMLA and §825.220 of FMLA regulations)


           This Bill  would provide that it is unlawful for an employer or  
          agent of an employer to discharge or in any other manner  
          discriminate against an individual because he or she has applied  
          for, used, or indicated an intent to apply for or use, family  
          temporary disability insurance benefits. 

          Specifically,  this bill  : 

             1)   makes an employer liable for actual damages and  
               appropriate equitable relief, including employment or  
               reinstatement, if an employer or agent of an employer  
               discharges or discriminates against an individual because  
               he or she has applied for, used, or indicated an intent to  
               apply for or use, family temporary disability insurance  
               benefits. 

             2)   would allow an employee or applicant to bring a civil  
               action seeking these remedies and if successful, the court  
               may award the employee or applicant reasonable attorney's  
               fees and costs. 



                                      COMMENTS

          
          1.  Background on Paid Family Leave Benefits Program 

             The California Paid Family Leave Act (PFLA), the first such  
            paid family leave program in the nation, was established in  
            2004. According to the Labor Project for Working Families and  
            UC Berkeley's report, A Guide to Implementing Paid Family  
            Leave: Lessons From California, the program was modeled after  
            the California State Disability Insurance Program (SDI). PFL  
            provides up to six weeks of partial pay for employees who take  
            leave from work to care for a child, parent, spouse, or  
          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 3

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            registered domestic partner with a serious health condition or  
            to bond with a newborn baby or new adopted or foster child.  
            Much like SDI, it is funded through a payroll tax paid  
            entirely by employees and is administered by the same state  
            agency - the Employment Development Department (EDD). Like  
            disability benefits, an employee that takes family leave can  
            receive a wage replacement of up to 55 percent of the  
            individual's average weekly salary. All employees who pay into  
            the State Disability Insurance Fund are covered by Paid Family  
            Leave. There are no minimum work hours or time of service  
            requirements, but individuals must have earned at least $300  
            in wages during the previous 12 months. 

          2.   The Interaction Between FMLA/CFRA and Paid Family Leave  

             There are various federal and state laws pertaining to family  
            leave - making it important to understand the differences  
            between the statutes as well as how they interact with one  
            another. The Family and Medical Leave Act (FMLA) is a federal  
            law that is administered by the U.S. Department of Labor while  
            the California Family Rights Act (CFRA) is a state law  
            administered by the Department of Fair Employment and Housing.  
            The state law changed in 1993 to generally conform to the  
            provisions of the FMLA. Both the FMLA and CFRA allow an  
            eligible employee to take up to a total of twelve  
            job-protected workweeks of leave with employer-paid health,  
            dental, and vision benefits during a "rolling" twelve month  
            period. The twelve weeks of leave must run concurrently for  
            all purposes aside from: 

                     Leave to care for a domestic partner (CFRA only) 
                     Disabilities due to pregnancy or pregnancy-related  
                 condition (FMLA only) 
                     Leave for a qualifying exigency related to a family  
                 member's military service (FMLA only) 
                     Leave to care for an ill or injured service member  
                 (FMLA only) 

            If an eligible FMLA/CFRA employee also elects to receive wage  
            replacement benefits from the Paid Family Leave program then  
            the PFL must be taken concurrently as well. 

          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 4

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            In addition to sharing similar leave provisions and  
            eligibility requirements, both the FMLA and CFRA have  
            anti-retaliation and discrimination provisions. 

          3.  Need for the bill? 

             PFL is a state-sponsored insurance program that covers  
            employers of any size. PFL provides partial wage replacement  
            for up to six weeks in any 12-month period, allowing an  
            employee to care for a seriously ill or injured family member  
            or bonding with a minor child within one year of the child's  
            birth or placement in connection with foster care or adoption.  


            While many employees are eligible for PFL leave, the program  
            does not create the right to a leave of absence - meaning that  
            employers are not required to reinstate an employee after they  
            take their paid family leave. This bill would bar an employer  
            from retaliating against an employee for exercising their  
            right to participate in the PFL program.  

          4.  Proponent Arguments  :
            
            According to proponents, although nearly the entire private  
            workforce in California contributes a portion of every  
            paycheck to participate in the Paid Family Leave program, many  
            workers who would otherwise qualify for PFL benefits are  
            unable to access the program because of a fear that their  
            employer will retaliate against them. Proponents contend that  
            some guarantee of not being fired for taking family leave  
            benefits is necessary for the program to reach all the  
            families that need financial support in caring for a new child  
            or seriously ill family member. Proponents point to a recent  
            study that showed nearly 37 percent of workers who were aware  
            of PFL and needed leave did not apply for PFL due to a fear of  
            being fired, angering their employers, or facing limitations  
            on their future opportunities for advancement. Proponents also  
            argue that the lack of protection for PFL users  
            disproportionately impacts low-wage workers who pay into the  
            system but are less likely to qualify for job protection under  
            other state and federal laws due to the lack of job security. 

          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 5

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            Further, proponents contend that PFL is good for business.  
            Proponents argue that by allowing employees to access these  
            benefits without fear of employer reprisal would benefit  
            workers and their families as well as their employer.  
            Proponents point back to the above survey, citing that the  
            vast majority of employers reported that the availability of  
            PFL benefits had either a positive or no noticeable effect on  
            business productivity (90%), profitability (91%), and employee  
            morale (99%). They also cited that 93% of the surveyed  
            employers reported a positive or no noticeable impact on  
            employee turnover, with 9% reported seeing cost savings due to  
            the decreased turnover and the reduction of benefit costs when  
            employees used PFL instead of (or in combination with)  
            employer-provided paid vacation, sick leave, or disability  
            benefits. 

          5.  Opponent Arguments  :

            Opponents argue that SB 761 would dramatically alter PFL and  
            transform it into an additional protective leave. Opponents  
            maintain that by allowing an employee to sue for alleged  
            discrimination on the basis that an employee applies for,  
            used, or expressed an intent to use PFL, the bill forces an  
            employer to provide an employee with six weeks of leave while  
            receiving PFL or face costly litigation. Opponents bring  
            attention to the requirements for CFRA leave, (50 or more  
            employees, 1250 working hours within 12 months), and argue  
            that under SB 761 the employee of an employer with fewer than  
            50 employees would now be able to request 6 weeks of leave  
            regardless of hours worked. Opponents argue that given the  
            multiple protected leaves of absence already in California,  
            any expansion of such leaves further impedes California  
            employers' growth and their ability to manage their  
            businesses. 

            Lastly, opponents argue that SB 761 allows an employee to  
            pursue civil litigation for discrimination, without first  
            exhausting an administrative remedy such as filing a complaint  
            with the Department of Fair Employment and Housing - the  
            process under CFRA. Opponents maintain SB 761 sidesteps the  
            administrative requirement and eases the process for  
            potentially frivolous litigation.  
          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 6

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          6.  Double Referral:
           
            SB 761 has been doubled referred to Senate Judiciary  
            Committee. 

          7.  Prior Legislation  :

            SB 193 (Marks), Chapter 580, Statutes of 1993 - created the  
            California Family Rights Act (CFRA), also known as the  
            Moore-Brown-Roberti Family Rights Act.

            SB 1661 (Kuehl), Chapter 901, Statutes of 2002 - created  
            within the state disability insurance program, a family  
            temporary disability insurance program to provide up to six  
            weeks of wage replacement benefits to workers who take time  
            off work to care for a seriously ill child, spouse, parent,  
            domestic partner, or bond with a new child. 
            
            SB 727 (Kuehl), Chapter 797, Statutes of 2003 - made  
            conforming and clarifying changes to Paid Family Leave program  
            that clarified the role of the Employment Development  
            Department in maintaining the program, as well as ensuring the  
            accumulation of enough funds to pay for the program.  
          
          

                                       SUPPORT
          
          Legal Aid Society - Employment Law Center (Sponsor) 
          A Better Balance 
          American Association of University Women California
          Association of California caregiver Resource Centers
          Breastfeed LA
          California Communities United Institute
          California Labor Federation, AFL-CIO
          California Rural Legal Assistance Foundation
          Cancer Legal Resource Center
          Communication Workers of America District 9
          Congress of California Seniors 
          Equal Rights Advocates 
          Excellence Learning Corporation
          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 7

          Senate Committee on Labor and Industrial Relations 
          








          Labor Project for Working Families 
          Legal Aid Society of San Mateo
          Los Angeles Alliance for a New Economy 
          UC Hastings College of Law 
          US Women's Chamber of Commerce 
          Women's Employment Rights Clinic of Golden Gate University  
          School of Law
          Women's Rights Clinic of Golden Gate University School of Law
          9to5 California, National Association of Working Women

                                     OPPOSITION

          Air Conditioning Trade Association 
          Associated Builders and Contractors of California 
          California Bankers Association 
          California Chamber of Commerce 
          California Farm Bureau Federation 
          California Framing Contractors Association 
          California Grocers Association 
          California Independent Grocers Association 
          California Manufacturers and Technology Association 
          California Retailers Association 
          Civil Justice Association of California
          National Federation of Independent Business 
          Plumbing-Heating-Cooling Contractors Association of California 
          Western Electrical Contractors Association















          Hearing Date:  April 10, 2013                            SB 761  
          Consultant: Deanna D. Ping                               Page 8

          Senate Committee on Labor and Industrial Relations