BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 761 (DeSaulnier)
As Introduced
Hearing Date: April 23, 2013
Fiscal: No
Urgency: No
TW
SUBJECT
Family Temporary Disability Insurance: Discrimination
DESCRIPTION
Existing law requires family temporary disability insurance
(Paid Family Leave (PFL)) 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, or domestic partner,
or to bond with a foster or adopted minor child.
This bill would provide that an employer or agent of an
employer, who discharges or discriminates against an individual
because he or she has applied for, used, or indicated an intent
to apply for or use PFL, shall be liable to the individual for
actual damages and appropriate equitable relief, including
employment or reinstatement. This bill would authorize the
individual to bring a civil action and, if the individual
prevails in the action, would authorize an award of attorney's
fees and costs to that individual.
BACKGROUND
The Family Medical Leave Act (FMLA) (29 U.S.C.S. Sec. 2601 et
seq.) and the California Family Rights Act (CFRA) (Gov. Code
Sec. 12945.1 et seq.) authorize employees to take up to 12 weeks
of medical leave, as specified, and provide employees with a
right of action to file a civil suit against employers in
violation of the FMLA or CFRA. Additionally, California
provides family temporary disability insurance (Paid Family
Leave (PFL)), paid for by employees, to provide up to six weeks
of wage replacement benefits to workers who take time off work
(more)
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to care for a seriously ill child, spouse, parent, or domestic
partner, or to bond with a foster or adopted minor child.
While existing law prohibits discrimination or retaliation
against an employee who elects to utilize FMLA or CFRA, existing
law does not protect an individual against discrimination or
retaliation for utilizing PFL. Further, PFL does not
specifically entitle an individual to file a civil suit against
an employer in violation of the PFL.
According to a recent study of the PFL program, many employees
fear that using PFL might have negative consequences for them at
work; their employer would be unhappy, their opportunities for
advancement would be affected, or they might actually be fired.
(Appelbaum & Milkman, Leaves That Pay: Employer and Worker
Experiences with Paid Family Leave in California (Jan. 2011)
[as of Apr.
13, 2013], pp. 4-5.)
In response to that study, this bill would prohibit an employer
from discriminating or retaliating against an individual who
utilizes PFL and would authorize the individual to bring a civil
action for specified remedies. This bill would also authorize
an award of attorney's fees and costs to the individual if he or
she prevails in the civil action.
This bill passed out of the Senate Labor and Industrial
Relations Committee on April 10 on a vote of 4-1.
CHANGES TO EXISTING LAW
Existing federal law , the Family Medical Leave Act (FMLA),
provides employees, who have at least 1,250 hours of service
with the employer during the previous 12-month period, with 12
weeks of job-protected family leave to care for a newborn,
foster or adopted minor child, or seriously ill family member,
because of a serious health condition of the employee, or
because of a qualifying exigency regarding a family member who
is on active duty in the Armed Forces. The California Family
Rights Act (CFRA) does not apply to employers who have less than
50 employees. (29 U.S.C.S. Sec. 2601 et seq.)
Existing federal law prohibits an employer from interfering
with, restraining, or denying the exercise or the attempt to
exercise, or discharging or discriminating against an individual
who utilizes, the FMLA. (29 U.S.C.S. Sec. 2615.)
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Existing federal law authorizes an employee to bring a civil
action against an employer in violation of the FMLA for damages,
interest thereon, liquidated damages, equitable relief,
including employment, reinstatement, and promotion, and the
prevailing employee shall be awarded reasonable attorney's fees,
expert witness fees, and costs to be paid by the defendant. (29
U.S.C.S. Sec. 2617.)
Existing law , the CFRA, provides workers, who have at least
1,250 hours of service with the employer during the previous
12-month period, with 12 weeks of job-protected family leave to
care for a newborn, foster or adopted minor child, or seriously
ill family member. The CFRA does not apply to employers who
have less than 50 employees. (Gov. Code Sec. 12945.1 et seq.)
Existing law prohibits an employer from refusing to hire, or
discharging, firing, suspending, expelling, or discriminating
against, any individual because of the individual's exercise of
leave provided under the CFRA. (Gov. Code Sec. 12945.1(l)(1).)
Existing law also provides these protections for civil service
employees. (Gov. Code Sec. 19702.3.)
Existing law provides that an employer may refuse to reinstate
an employee returning from CFRA leave to the same or a
comparable position if all of the following apply:
(A) the employee is a salaried employee who is among the highest
paid 10 percent of the employer's employees who are employed
within 75 miles of the worksite at which that employee is
employed;
(B) the refusal is necessary to prevent substantial and grievous
economic injury to the operations of the employer; and
(C) the employer notifies the employee of the intent to refuse
reinstatement at the time the employer determines the refusal is
necessary under subparagraph (B) above.
In any case in which the leave has already commenced, the
employer shall give the employee a reasonable opportunity to
return to work, following the notice prescribed by subparagraph
(C) above. (Gov. Code Sec. 12945.1(r).)
Existing law , Paid Family Leave (PFL), a state family temporary
disability insurance program, 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 foster or adopted minor child. (Unemp. Ins.
Code Sec. 3300 et seq.)
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This bill would provide that an employer or agent of an employer
that discharges or in any other manner discriminates against an
individual because he or she has applied for, used, or indicated
an intent to apply for or use, PFL benefits, shall be liable to
an individual affected by the violation for actual damages and
appropriate equitable relief, including employment or
reinstatement.
This bill would authorize an individual to bring a civil action
seeking the above remedies in a court of competent jurisdiction.
This bill would provide that, if the employee or job applicant
prevails in the action, the court may award the employee or
applicant reasonable attorney's fees and costs.
COMMENT
1. Stated need for the bill
The author writes:
Since 2004 California's Paid Family Leave (PFL) program has
provided critical wage replacement benefits to workers who
take leave from work to bond with a newborn baby, adopted or
foster child; and care for a seriously ill parent, child,
spouse or registered domestic partner. Workers who contribute
to the PFL program may receive six weeks of partial pay each
year while taking time off from work. The PFL program is
administered by the California Employment Development
Department (EDD), not the employer, and is entirely funded by
worker contributions.
Only those workers who are covered by the California Family
Rights Act or the Family and Medical Leave Act (which provide
unpaid, but job-protected leave) are guaranteed the right to
reinstatement following PFL. As a result, . . . [m]any
workers are unable or afraid to use PFL, even though they pay
for it, because they fear retaliation by their employer. . .
. The lack of protection while using PFL 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.
SB 761 prohibits an employer or agent of an employer to
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discharge or in any other manner to discriminate against an
individual because he or she has applied for, used, or
indicated an intent to apply for or use, [PFL].
2. Providing discrimination and retaliation protections under the
PFL
Although employees have protection, under the Family Medical
Leave Act (FMLA) (29 U.S.C.S. Sec. 2601 et seq.) and the
California Family Rights Act (CFRA) (Gov. Code Sec. 12945.1 et
seq.), against discrimination and retaliation for taking unpaid
leave to care for family members, employees do not currently
have these protections when they apply for wage benefits under
the PFL. The PFL, paid for by employees, 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 foster or adopted minor
child. This bill would prohibit an employer from discriminating
or retaliating against an individual who utilizes PFL.
A 2011 study of the PFL program reported that many of the
employees surveyed "who were aware of PFL but did not apply for
the program when they needed a family leave feared that using it
might have negative consequences for them at work. About 37
percent of those for whom data are available were worried that
if they took PFL, their employer would be unhappy, that their
opportunities for advancement would be affected, or that they
might actually be fired." (Appelbaum & Milkman, Leaves That
Pay: Employer and Worker Experiences with Paid Family Leave in
California (Jan. 2011) [as of Apr.
13, 2013], pp. 4-5.) Similarly, proponents of this bill argue:
Funded entirely by workers contributions, California's
first-in-the-nation [PFL] program provides up to six weeks of
partial wage replacement benefits to workers on leave to bond
with a new child or care for a seriously ill family member.
Although virtually all private employees in California
contribute a portion of each paycheck to the PFL program,
nearly 37 [percent] of workers in a recent survey who needed
leave and were aware of PFL nonetheless said they did not
apply for benefits due to fear of employer retaliation. In
addition to fear of termination, employee respondents reported
that they chose not to apply for PFL because they feared doing
so might anger their employers or limit their future
opportunities for advancement. SB 761 would clarify that such
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retaliation is unlawful.
Notably, PFL falls under the statutory umbrella of disability
insurance. Under the State Disability Insurance (SDI) program,
an employee may receive wage replacement benefits while he or
she takes up to 52 weeks of work leave due to the employee's own
non-work related illness (work related illnesses would fall
under Worker's Compensation benefits). Arguably, employees, who
are statutorily required to pay for SDI, are less afraid of
filing a claim for SDI because they are unable to perform their
work duties (and may, in some instances, have been instructed by
their employer to take leave from work) and need wage
replacement benefits until such time as they are able to return
to work. On the other hand, as demonstrated by the 2011 study
above, employees, who PFL was intended to help and who need to
take time off (potentially concurrently with FMLA or CFRA leave)
to care for family members, are less likely to apply for PFL
since they fear employer retribution.
The stated Legislative intent of PFL was to provide benefits to
workers for the care of their family members, which in turn
benefits the public. (Unemp. Ins. Code Sec. 3300(a).) In order
to bolster the public benefit of PFL, this bill would protect
individuals who apply for or use PFL from discrimination or
retaliation.
3. Civil action with remedies and attorney's fees and costs
This bill would authorize an individual to bring a civil action
for actual damages and appropriate equitable relief, including
employment or reinstatement, and authorize an award of
attorney's fees and costs to the individual if he or she
prevails in the civil action.
Notably, the FMLA provides an employee, who is discriminated or
retaliated against for taking personal or family care leave,
with the right to bring a civil action for damages, interest
thereon, liquidated damages, equitable relief, including
employment, reinstatement, and promotion, and requires a
prevailing employee to be awarded reasonable attorney's fees,
expert witness fees, and costs to be paid by the defendant. (29
U.S.C.S. Sec. 2617.) The FMLA was established to balance the
demands of the workplace with the needs of families, to promote
the stability and economic security of families, and to promote
national interests in preserving family integrity. (29 U.S.C.S.
Sec. 2601.)
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Similarly, the PFL was established to help families adapt to the
competing interests of work and home, which not only benefits
workers, but also benefits employers by increasing worker
productivity and reducing employee turnover. (Unemp. Ins. Code
Sec. 3300(c).) The PFL statute states that "[t]he majority of
workers in this state are unable to take family care leave
because they are unable to afford leave without pay. When
workers do not receive some form of wage replacement during
family care leave, families suffer from the worker's loss of
income, increasing the demand on the state unemployment
insurance system and dependence on the state's welfare system."
(Unemp. Ins. Code Sec. 3300(f).)
Arguably, since the FMLA was intended to provide workers with
the ability to provide family care, and to do so, the FMLA
authorizes employees with a civil right of action, enumerated
damages, and an award of attorney's fees and costs in order to
provide employees with litigation safeguards to protect their
rights under the FMLA. However, if an employee is unable to
utilize FMLA because they cannot afford to apply for wage
replacement benefits without fear of discrimination or
retaliation, the FMLA and CFRA are useless. This bill would
provide employees with appropriate litigation safeguards to
enforce their rights to PFL, which ultimately furthers the
purposes of the FMLA and CFRA.
4. Opposition concerns
Opponents of this bill argue that it "would dramatically alter
PFL and transform it into an additional protective leave."
Opponents assert that CFRA only applies to employers with 50 or
more employees who work 1250 working hours within 12 months.
PFL, on the other hand, has no working-hours requirement, so an
employee would now be able to request six weeks of leave
regardless of hours worked, and force an employer to provide an
employee with six weeks of leave while receiving PFL, or face
costly litigation. Further, there is no administrative
exhaustion requirement (as required under the CFRA), so
employees will be able to sidestep the administrative
requirement and potentially expose employers to frivolous
litigation.
In response, proponents note that study on the PFL, Leaves That
Pay, found that:
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The business community's concerns prior to passage of
the PFL legislation, that it would impose extensive new
costs on employers and involve a particularly serious
burden for small business, were unfounded. After more than
five years' experience with PFL, the vast majority of
employers reported that it has had minimal impact on their
business operations.
Most employers report that PFL had either a "positive
effect" or "no noticeable effect" on productivity (89
percent), profitability/performance (91 percent), turnover
(96 percent), and employee morale (99 percent).
Small businesses were less likely than larger
establishments (those with more than 100 employees) to
report any negative effects.
Employers raised strong concerns prior to implementation
about abuse of the program. However, the vast majority (91
percent) of respondents to the employer survey said "No"
when asked if they were "aware of any instances in which
employees that you are responsible for abused the state
Paid Family Leave program"
About 60 percent of employers surveyed reported that
they coordinated their own benefits with the state PFL
program. This meant cost savings to employers when
employees used PFL instead of (or in combination with)
employer-provided paid sick leave, vacation, or disability
benefits. (Appelbaum & Milkman, Leaves That Pay: Employer
and Worker Experiences with Paid Family Leave in California
(Jan. 2011)
[as of Apr. 13, 2013], p. 4.)
Given these employer responses (253 businesses of varying
sectors and sizes), the opponents' litigation concerns, which
were also raised against enacting the PFL, may be unfounded.
Further, in response to the opponents' arguments, the author
notes that "SB 761 doesn't create an entitlement program,
because Paid Family Leave already exists in statute. SB 761
simply allows employees who are paying into it, to be able to
use it without fear of losing their job because they take Paid
Family Leave. Also, the expense of hiring temporary workers can
be spent in offering other employees' overtime. These practices
have been shown (in the aforementioned study) to increase
[morale] within said small business, because it takes away the
fear of possibly losing a job because of a familial issue or
change."
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Support : 9to5 California; 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;
Excelligence Learning Corporation; Labor Project for Working
Families; Legal Aid Society of San Mateo; Los Angeles Alliance
for a New Economy; National Association of Working Women; 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
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
HISTORY
Source : Legal Aid Society - Employment Law Center
Related Pending Legislation : SB 770 (Jackson and DeSaulnier,
2013) would add grandparent, grandchild, and sibling to the list
of qualifying persons for whose care an employee could utilize
family temporary disability insurance (Paid Family Leave (PFL)).
SB 770 is currently in the Senate Committee on Labor and
Industrial Relations and set for hearing on April 24, 2013.
Prior Legislation :
SB 727 (Kuehl, Ch. 797, Stats. 2003), among other things, made
conforming and clarifying changes in provisions relating to
family temporary disability compensation and applied certain
existing unemployment insurance provisions to PFL.
SB 1661 (Kuehl, Ch. 901, Stats. 2002) established PFL.
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Prior Vote : Senate Committee on Labor and Industrial Relations
(Ayes 4, Noes 1)
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