BILL ANALYSIS Ó SB 406 Page 1 Date of Hearing: June 24, 2015 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair SB 406 (Jackson) - As Amended June 1, 2015 SENATE VOTE: 23-16 SUBJECT: Employment: leave. SUMMARY: Expands various provisions of law related to unpaid family and medical leave under the California Family Rights Act. Specifically, this bill: 1)Provides that the law applies to any person who directly employs 25 or more employees (compared with 50 or more employees under existing law). 2)Amends the definition of "child" to include the son or daughter of a domestic partner and deletes provisions regarding the age and dependent status of a child. 3)Expands permissible leave to include leave to care for a sibling, grandparent, grandchild, parent-in-law, or domestic partner with a serious health condition. SB 406 Page 2 4)Removes an exception when both parents are employed by the same employer, thereby requiring the employer to grant each employee up to 12 weeks of leave individually rather than between both parents, as currently in existing law. 5)Makes related and conforming changes. EXISTING LAW: 1)Establishes the California Family Rights Act (CFRA), also known as the Moore-Brown-Roberti Family Rights Act. 2)Requires employers with 50 or more employees to provide covered employees, upon request, with up to 12 weeks of protected unpaid leave during any 12 month period for the following reasons: a) For the birth of a child or the placement of a child in connection with the adoption or placement in foster care of the child with the employee. b) To care for a parent, spouse or child with a serious health condition. c) Because of the employee's own serious health condition. 3)Defines "child" as a biological, adopted or foster child, a stepchild, a legal ward, or a child of a person standing in local parentis, who is either under the age of 18 or is an adult independent child. 4)Defines an "employer" as either any person who directly employs 50 or more persons to perform services for a wage or a salary, or the state and any political or civil subdivision of the state and cities. SB 406 Page 3 5)Defines a "parent" as a biological, foster, or adoptive parent, a stepparent, a legal guardian, or other person who stood in loco parentis to the employee when the employee was a child. 6)Defines a "serious" health condition as an illness, injury, impairment, or physical or mental condition that involves either inpatient care or continuing treatment or supervision by a health care provider. 7)Requires an employee to provide the employer with reasonable advance notice of the need for the leave, if foreseeable. 8)Authorizes an employer to require that an employee request for leave for a serious health condition be certified by a health care provider, as specified, and that it subsequently may be recertified if additional leave is requested. 9)Establishes a process by whereby an employer may contest the validity of the certification of a serious health condition and obtain an ultimate determination that is final and binding on the employer and the employee. FISCAL EFFECT: According to the Senate Appropriations Committee, the Department of Fair Employment and Housing will incur increased General Fund costs of about $686,000 annually to implement the provisions of this bill. COMMENTS: The federal Family and Medical Leave Act (FMLA) is the federal law that provides up to 12 weeks of unpaid leave to covered employees. The FMLA covers all public-sector workers and private sector workers who work for employers with 50 or more employees on the payroll or within 75 miles of the worksite. In addition, employees must work for at least 12 months and worked 1,250 hours or more for the same employer in the year preceding the leave. SB 406 Page 4 CFRA is the state law version of the federal FMLA, and is enforced by the Department of Fair Employment and Housing. This bill proposes to make a number of changes to the CFRA. Expanding Employers and Employees Covered Under the CFRA The existing CFRA defines "employer" to mean any person who directly employs 50 or more persons, and includes the state, and any political or civil subdivision of the state. Similarly, CFRA specifies that it shall not be an unlawful employment practice for an employer to refuse to grant a request for family care and medical leave by an employee if the employer employs less than 50 employees within 75 miles of the worksite where that employee is employed. This bill would amend CFRA to provide that the law applies to any person who directly employs 25 or more employees. FMLA COMPARISON: The FMLA covers all public-sector workers and private sector workers who work for employers with 50 or more employees on the payroll or within 75 miles of the worksite. Expanding the Definition of Child Existing state law defines a "child" as a biological, adopted or foster child, as stepchild, a legal ward or a child of a person standing in loco parentis, who is either under the age of 18 or is an adult dependent child. The regulations implementing the CFRA specify that an adult dependent child is "an individual who is 18 years of age or older and who is incapable of self-care SB 406 Page 5 because of a mental or physical disability (2 C.C. R. 7297.0 (c)). This bill eliminates the reference to age and dependency status of a child, and specifies that "child" includes the son or daughter of a domestic partner. FMLA COMPARISON: The FMLA uses a definition of "son or daughter" that specifies that the individual must be either under the age of 18 or age 18 or older and "incapable of self-care because of a mental or physical disability" (29 C.F.R. 825.113 (c)), identical to the definition under the existing CFRA regulations. Expanding Coverage for Siblings, Grandparents, Grandchildren, and Parents-in-Law Existing state law defines "family and medical leave" to include leave to care for a parent, spouse or child with a serious health condition. This bill expands the coverage of existing law to include leave to care for a sibling, grandparent, grandchild or parent-in-law with a serious health condition, and specifies that the permissible leave includes domestic partners with a serious health condition. FMLA COMPARISON: The FMLA authorizes an employee to take leave to care for a spouse, son or daughter, or parent with a serious health condition. The federal regulation specifies that the term spouse means "a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where SB 406 Page 6 it is recognized" (29 C.F.R. 825.113 (a) ). Elimination of Exception for Parents Working for the Same Employer Existing law under CFRA states that where both parents are employed by the same employer, the employer shall not be required to grant leave in connection with the birth, adoption, or foster care of a child that would allow the parents family care and medical leave totaling more than 12 weeks. This bill would eliminate such language, thereby requiring the employer to grant each employee up to 12 weeks of leave individually rather than between both parents ARGUMENTS IN SUPPORT According to the author, this bill ensures that eligible workers can keep their jobs when they need time off to care for their families. Over 40 percent of the workforce is not eligible for California Family Rights Act due to the law's eligibility. The current definition of family under CFRA includes minor or adult dependent children, parents, spouses, and registered domestic partners. Recently, the definition of family members for Paid Family Leave (PFL), a program that allows workers to receive partial wage replacement benefits while taking care of seriously ill family members, was expanded to include siblings, grandparents, grandchildren, and parents-in-law. This bill seeks to include these family members under CFRA, allowing SB 406 Page 7 employees to take job-protected leave when utilizing their PFL benefits. Currently, employees may receive this monetary benefit when caring for these additional family members but risk losing their jobs to provide such care. This bill would also allow for parents that are entitled to leave and employed by the same employer to receive 12 weeks of family and medical leave individually in connection with the birth, adoption, or foster care of a child. According to supporters, the restrictions on family caregiving under CFRA fail to account for the diversity of California households and the importance of caregiving by extended family members. Supporters bring attention to various study findings including: a study of Alzheimer's patients which found that 40 percent of caregivers were not covered under the narrow definition of family in CFRA, one study that found that nearly 20 percent of primary caregivers for chronically disabled individuals are neither the spouse nor the child of the person receiving care, and another finding that one in twelve caregivers provides care to a parent-in-law, grandparent, or grandparent-in-law. Supporters also note that California's PFL insurance program provides an important partial wage replacement when an employee takes time off work to care for a seriously ill family member. However, because PFL does not provide any job protection some workers who pay into this fund never access its benefits because they would risk losing their job if they took any leave. Supporters point to a 2011 study which found that among those who were aware of PFL and needed leave but did not apply for benefits, 38 percent said they did not apply because they feared they would be fired or face other negative consequences at work. Supporters contend that this bill will provide the critical job-protection for workers who want to take paid family leave by SB 406 Page 8 amending CFRA to expand the definition of family to match PFL and to lower the employer threshold so that more workers are covered. Finally, supporters argue that most leave taken under the CFRA or the FMLA is short, minimizing the impact on employers. They state that nearly half of all leave taken is for 10 days or less. Moreover, they cite data from the Employment Development Department (EDD) that expanding this bill to cover employers with 25 or more employees will impact less than 6 percent of businesses in California. ARGUMENTS IN OPPOSITION A coalition of employers, including the California Chamber of Commerce, opposes this bill and argues that it will overwhelm small businesses by mandating businesses with 25 or more employees to provide a 12-week protected leave of absence. Opponents contend that this will put a greater burden on both small and large businesses while creating an even further disconnect from the FMLA. Opponents argue that this creates a burden for the employer especially if he or she has multiple employees already out of work on protected leaves and because the employer must hire and train a temporary employee to cover the employees' duties, pay an existing employee a higher wage or overtime to take on the duties, or suffer decreased productivity until the existing employee out on leave is ready to return to work. Additionally, opponents argue that expanding the family members for whom an employee may take a 12-week protected leave of absence to care for to include a grandparent, a grandchild, and SB 406 Page 9 siblings will negatively impact California employers. Opponents argue that as these family members in this bill are not covered under the FMLA, this bill will potentially provide a California employer with an obligation to provide up to 24 weeks of protected leave. Specifically, opponents argue that under this bill an employee could utilize his or her 12 weeks of CFRA to care for the serious medical condition of a grandparent as well as still be entitled to another 12-week protected leave of absence under FMLA for his or her own medical condition or the medical condition of his or her spouse, child or parent. Opponents also argue that California already has extensive family-related protected leaves of absence including the following: Paid Sick Leave (applicable to all employers and includes employee and family members); Kin Care (applicable to all employers and allows employees to use half of paid time off for family members' illnesses); California Family Rights Act (applicable to employees with 50 or more employees and provides 12-week leave of absence for employee's medical condition, family members medical condition, or to bond with new child); Pregnancy Disability Leave (applicable to employers with 5 or more employees and provides 4 months of protected leave that is in addition to CFRA's 12 weeks); School Activities Leave (applicable to employers with 25 or more employees for 40 hours per year to attend school related activities of a child). They contend that imposing another 12 week leave of absence on employers with only 25 employees is simply too much for many of these small employers to manage. REGISTERED SUPPORT / OPPOSITION: SB 406 Page 10 Support 9to5 CA Chapter 9to5 National Alzheimer's Association American Association of Retired Persons Association of American University Women, CA Association of Caregiver Resource Centers, CA Association of Women's Health, Obstetrics, and Neonatal Nurses Breastfeeding Coalition for Ventura County BreastfeedLA California Alliance for Retired Americans California Black Health Network California Employment Lawyers Association (co-sponsor) California Immigrant Policy Center California Labor Federation, AFL-CIO California Nurses Association California Rural Legal Assistance Foundation SB 406 Page 11 California School Employees Association California Teachers Association California Women's Law Center California Work & Family Coalition Center for Law and Social Policy Central Coast Alliance United for a Sustainable Economy Child Care Law Center Coalition of California Welfare Rights Organizations, Inc. Communications Workers of America 9003 Communications Workers of America District 9 Congress of California Seniors Disability Rights California Equal Rights Advocates (co-sponsor) Family Caregiving Alliance Forward Together Independent Living Resource Center Jodi House of Santa Barbara Latino Coalition for a Healthy California Legal Aid Society - Employment Law Center (co-sponsor) SB 406 Page 12 Los Angeles Alliance for a New Economy LAANE National Association of Social Workers, CA National Council of Jewish Women, CA National Partnership for Women & Families Organization of SMUD Employees Planned Parenthood Action Fund of Santa Barbara, Ventura & San Luis Obispo Restaurant Opportunities Center of Los Angeles San Bernardino Public Employees Association San Diego County Court Employees Association San Francisco Breastfeeding Promotion Coalition San Luis Obispo County Employees Association SEIU California Teamsters Local Union No. 986 The Alliance of California for Community Empowerment The Arc and United Cerebral Palsy California Collaboration The Women's Foundation of California UC Hastings Center for WorkLife Law Western Center on Law and Poverty Western Regional Advocacy Project SB 406 Page 13 Opposition Air Conditioning Trade Association Alhambra Chamber of Commerce Associated Builders and Contractors of California Associated General Contractors California Ambulance Association California Association for Health Services at Home California Chamber of Commerce California Cotton Ginners Association California Cotton Growers Association California Dairies, Inc. California Delivery Association California Farm Bureau Federation SB 406 Page 14 California Fresh Fruit Association California Grocers Association California Landscape Contractors Association California League of Food Processors California Manufacturers and Technology Association California Pool & Spa Association California Professional Associations of Specialty Contractors California Restaurant Association California State Association of Counties California State Council of SHRM California Trucking Association Claremont Chamber of Commerce Family Business Association SB 406 Page 15 Far West Equipment Dealers Association Greater Bakersfield Chamber of Commerce National Federation of Independent Business Nisei Farmers League Plumbing-Heating-Cooling Contractors Association of California San Francisco Chamber of Commerce Small Business California Society for Human Resource Management, CA Southwest California Legislative Council The Alliance Torrance Area Chamber of Commerce Western Agricultural Processors Association Western Electrical Contractors Association SB 406 Page 16 Western Growers Association Western Plant Health Association Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091