BILL ANALYSIS Ó SB 406 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 406 (Jackson) - As Amended June 1, 2015 ----------------------------------------------------------------- |Policy |Labor and Employment |Vote:|5 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill expands unpaid family and medical leave provided under the California Family Rights Act (CFRA). Specifically, this bill: SB 406 Page 2 1)Provides that the CFRA law applies to any person who directly employs 25 or more employees. (Existing law applies to employers with 50 or more employees). 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. 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 provided in existing law. FISCAL EFFECT: 1)General Fund administrative costs to the Department of Fair Employment and Housing (DFEH) of approximately $700,000, for seven additional positions to process an estimated 500 to 700 additional CFRA complaints. 2)The impact to other state agencies is expected to be minimal since the state generally provides this benefit already. The Department of Developmental Services (DDS) notes the bill could have an impact on providers who would likely ask for unanticipated rate adjustments as a result of the bill. DDS indicates they would likely grant the request, assuming the providers can document the bill's impact to their costs. These SB 406 Page 3 costs are difficult to predict however, as it is no known how many providers would take advantage of the expanded leave. COMMENTS: 1)Background. The 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. CFRA is the state law version of the federal FMLA, and is enforced by the DFEH. Under current law, CFRA allows an employee who has worked at least 1,250 hours to take up to 12 weeks of leave in a 12-month period for their own serious medical condition, for the birth or adoption of a child, or to care for the serious medical condition of a child (under 18 years of age or adult dependent), spouse or parent. The current definition of a "parent" includes step-parents, as well as those individuals who stand in place of a parent to the child. 2)Purpose. According to the author, over 40 percent of the workforce is not eligible for CFRA and 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. The current definition of family under CFRA includes minor or adult dependent children, parents, spouses, and registered SB 406 Page 4 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 employees to take job-protected leave when utilizing their PFL benefits. Supporters contend a worker should not have to choose between caring for their family and keeping his or her job. Yet that is the choice many must face without job protected family leave. According to a 2011 study, among those who were aware of PFL and needed leave but did not apply for benefits, 37 percent said they did not apply because they feared they would be fired or face other negative consequences at work. An expansion of CFRA ensures that more employees will be able to use their PFL benefits without fear of losing their job. 3)DFEH impact. Increased protections under this bill could lead to discrimination and increased workload to DFEH to process complaints. According to 2014 data from the California Employment Development Department, there are just over 9.4 million employees working at businesses covered by CFRA. DFEH estimates this bill will expand CFRA to approximately 1,763,000 employees not covered under current law. SB 406 Page 5 In 2014, the DFEH received 3,913 CFRA complaints, of which, 2,000 were taken in for investigation. Assuming similar complaint patterns, DFEH estimates the new law could generate approximately 380 additional complaints. The bill also extends coverage to children of domestic partners and expands the law to allow employees to leave work for care of a grandparent, grandchild, sibling or domestic partner who has a serious health condition. These expanded categories could lead to an additional 130 to 330 complaints annually. 4)Opposition. A coalition of employers, including the California Chamber of Commerce, are concerned this bill will place an undue burden on businesses who will have to train and hire temporary employees to cover workload, pay an existing employee a higher wage to take on more work, or suffer decreased productivity until the existing employee returns from leave. 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 SB 406 Page 6 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 too much for many of these small employers to manage. 5)Prior legislation. SB 770 (Jackson), Chapter 350, Statutes of 2013 expanded the definition of family to include in-laws, siblings and grandparents. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081 SB 406 Page 7