BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 761| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 761 Author: DeSaulnier (D) Amended: As introduced Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 4/10/13 AYES: Lieu, Leno, Padilla, Yee NOES: Wyland SENATE JUDICIARY COMMITTEE : 5-1, 4/23/13 AYES: Evans, Corbett, Jackson, Leno, Monning NOES: Anderson NO VOTE RECORDED: Walters SUBJECT : Family temporary disability insurance SOURCE : Legal Aid Society-Employment Law Center DIGEST : This bill provides 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 Paid Family Leave (PFL), shall be liable to the individual for actual damages and appropriate equitable relief, including employment or reinstatement. Authorizes the individual to bring a civil action and, if the individual prevails in the action, authorizes an award of attorney's fees and costs to that individual. ANALYSIS : Existing law established a family temporary disability insurance program, PFL, that provides up to six weeks CONTINUED SB 761 Page 2 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. Existing law states that an individual is eligible to receive temporary disability insurance benefits equal to one-seventh of his/her weekly benefit amount for each full day during which he/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. 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. 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: 1. Twelve workweeks of leave in a 12-month period for: A. Bonding with a newborn or adopted child. B. Caring for a family member with a serious health condition (includes parent, spouse, child, registered domestic partner and same sex spouse). C. The employee's own serious health condition (excluding pregnancy). 2. Eligible employees must meet the following conditions: A. 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. CONTINUED SB 761 Page 3 B. Worked at a location in which the employer has at least 50 employees within 75 miles of the employee's worksite. 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. 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. 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. 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. This bill: 1. Provides 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/she has applied for, used, or indicated an intent to apply for or use, family temporary disability insurance benefits. 2. 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/she has applied for, used, or indicated an intent to apply for or use, family temporary disability insurance benefits. 3. Allows 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 CONTINUED SB 761 Page 4 costs. Comments Background on PFL Benefits Program . The California PFL Act, 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 PFL: Lessons From California, the program was modeled after the 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 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% of the individual's average weekly salary. All employees who pay into the State Disability Insurance Fund are covered by PFL. 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. The Interaction Between FMLA/CFRA and PFL . 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 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: CONTINUED SB 761 Page 5 1.Leave to care for a domestic partner (CFRA only) 2.Disabilities due to pregnancy or pregnancy-related condition (FMLA only) 3.Leave for a qualifying exigency related to a family member's military service (FMLA only) 4.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 PFL program then the PFL must be taken concurrently as well. In addition to sharing similar leave provisions and eligibility requirements, both the FMLA and CFRA have anti-retaliation and discrimination provisions. Prior legislation SB 193 (Marks, Chapter 580, Statutes of 1993) created the CFRA, also known as the Moore-Brown-Roberti Family Rights Act. SB 1661 (Kuehl, Chapter 901, Statutes of 2002) created within the SDI 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 PFL program that clarified the role of the EDD in maintaining the program, as well as ensuring the accumulation of enough funds to pay for the program. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 5/23/13) Legal Aid Society-Employment Law Center (source) CONTINUED SB 761 Page 6 9to5 California, National Association of Working Women A Better Balance American Association of University Women Association of California Caregiver Resource Centers BreastfeedLA California Communities United Institute California Labor Federation California Senior Legislature California WIC Association California Women's Law Center Cancer Legal Resource Center Communication Workers of America, AFL-CIO, District 9 Congress of California Seniors Disability Rights Advocates Disability Rights Education & Defense Fund Equal Rights Advocates Excelligence Learning Corporation Family Caregiver Alliance Glendale City Employees Association Golden Gate University School of Law, Women's Employment Rights Clinic Labor Project for Working Families Legal Aid Society of San Mateo County Los Angeles Alliance for a New Economy Mujeres Unidas y Activas Organization of SMUD Employees Parent Voices Restaurant Opportunities Center of Los Angeles San Bernardino Public Employees Association San Francisco Breastfeeding Coalition San Luis Obispo County Employees Association Santa Rosa City Employees Association SEIU California UAW Local 2865 UC Hastings College of Law US Women's Chamber of Commerce USC Davis, School of Gerontology WIC Breastfeeding Coordinator, Grace Yee Zazie Restaurant OPPOSITION : (Verified 5/23/13) Air Conditioning Trade Association Associated Builders and Contractors of California CONTINUED SB 761 Page 7 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 Pool & Spa Industry Education Council California Retailers Association Civil Justice Association of California National Federation of Independent Business Plumbing-Heating-Cooling Contractors Association of California Southwest California Legislative Council Western Electrical Contractors Association ARGUMENTS IN SUPPORT : According to proponents, although nearly the entire private workforce in California contributes a portion of every paycheck to participate in the PFL 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% 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. 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 CONTINUED SB 761 Page 8 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. ARGUMENTS IN OPPOSITION : Opponents argue that this bill dramatically alters PFL and transforms 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, this 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 argues that under this bill the employee of an employer with fewer than 50 employees will now be able to request six weeks of leave regardless of hours worked. Opponents argues 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 argues that this bill 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 this bill sidesteps the administrative requirement and eases the process for potentially frivolous litigation. PQ:d 5/23/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED