BILL ANALYSIS                                                                                                                                                                                                    

                                                                     SB 654

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          Date of Hearing:  August 22, 2016


                                Tony Thurmond, Chair

          654 (Jackson) - As Amended August 18, 2016

          SENATE VOTE:  21-16

          SUBJECT:  Unlawful employment practice:  parental leave

          SUMMARY:  Enacts the "New Parent Leave Act" to, among other  
          things, require an employer of 20 or more employees to allow  
          eligible employees to take up to six (6) weeks of job-protected  
          parental leave to bond with a new child.  Specifically, this  

          1)Defines "employer" to mean either of the following:

             a)   A person who directly employs (within 75 miles of the  
               worksite) 20 or more persons to perform services for a wage  
               or salary.

             b)   The state and any political subdivision of the state and  

          2)Makes it an unlawful employment practice for an employer to  


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            refuse to allow an employee, with more than 12 months and at  
            least 1,250 hours of service with the employer, to take up to  
            six (6) weeks of parental leave to bond with a new child  
            within one year of the child's birth, adoption or foster care  

          3)Requires the employer to provide a guarantee of employment in  
            the same or comparable position upon return, as specified.

          4)Provides that the employee may utilize accrued vacation pay,  
            paid sick time, other accrued paid time off, or other paid or  
            unpaid time off negotiated with the employer, during the  
            period of parental leave.

          5)Makes is an unlawful employment practice for an employer to  
            refuse to maintain and pay for continued group health coverage  
            for eligible employees who take parental leave at the same  
            level and under the same conditions that would have been  
            provided of the employee had continued to work during the  
            duration of the leave.

          6)Specifies that an employee is entitled to take Pregnancy  
            Disability Leave, in addition to the leave provided in this  
            bill, if the employee is otherwise qualified for that leave.

          7)Provides that this bill does not apply to an employee subject  
            to both the California Family Rights Act (CFRA) and the  
            federal Family Medical Leave Act (FMLA).

          8)Provides that in any case in which two employees who are  
            entitled to leave for the same birth, adoption or foster care  
            placement are employed by the same employer, the employer is  
            not required, but may elect, to grant simultaneous leave to  


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            both employees.

          9)Provides that the basic minimum duration of the leave shall be  
            two weeks.  However, an employer may grant requests for  
            additional occasions of leave lasting less than two weeks.

          10)Provides that leave under this bill shall run concurrently  
            with parental leave taken pursuant to a specified provision of  
            existing law applicable to certain certificated school  

          11)Provides that this bill shall become operative on January 1,  

          EXISTING LAW:   

          1)Provides that the CFRA and the federal FMLA, required to be  
            taken concurrently, entitles eligible workers of employers  
            with 50 or more employees to:

             a)   Take up to 12 workweeks of unpaid, job-protected leave  
               during a 12-month period for specified family and medical  
               reasons, including time to bond with a new child through  
               birth, adoption or foster care placement, among others.

             b)   Guaranteed reinstatement to the same or comparable  


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             c)   Continued group health coverage during the duration of  
               the leave under the same terms and conditions. 

          2)Establishes the Paid Family Leave (PFL) program, within the  
            State Disability Insurance program, as a partial  
            wage-replacement plan funded through employee payroll  
            deductions. Among other things: 

             a)   PFL provides eligible employees with up to six weeks of  
               wage replacement benefits to care for a seriously ill  
               child, spouse or registered domestic partner, parent,  
               siblings, grandparents, grandchildren, and parents-in-laws  
               or to bond with a minor child within one year of the birth  
               or placement of the child in connection with foster care or  

             b)   Employers may require that employees take up to two  
               weeks of earned but unused vacation when using PFL. The law  
               does not allow employers to require employees to use sick  


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             c)   PFL does not provide job protection or return to work  

             d)   PFL does not require continued group health coverage  
               during leave. 

          3)Establishes that Pregnancy Disability Leave (PDL), under the  
            Fair Employment and Housing Act, requires private employers  
            with five or more employees and public employers to provide up  
            to four months of unpaid, job-protected leave for pregnancy,  
            childbirth or related conditions. 

             a)   Employees may use accrued vacation and paid sick leave  
               during PDL.

             b)   Employees are entitled to reasonable accommodations and  
               reinstatement to the job held before PDL began. 


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             c)   Employers are required to continue health coverage  
               during PDL.

          FISCAL EFFECT:  Unknown

          COMMENTS:  This bill would establish the New Parent Leave Act  
          under FEHA and make it an unlawful employment practice for an  
          employer, as defined, to refuse to allow an employee to take up  
          to six (6) weeks of parental leave to bond with a new child  
          within one year of the child's birth, adoption, or foster care  
          placement.  This bill would also prohibit an employer from  
          refusing to maintain and pay for coverage under a group health  
          plan for an employee who takes this leave.

          According to the author, under current law, only those who work  
          for an employer of 50 or more are eligible for job protected  
          parental leave under California law.  That leaves many new  
          parents with an impossible choice between the wellbeing of his  
          or her new child and his or her family's financial security.

          Supporters argue that this bill would drastically improve access  
          to parental leave by providing job protection to more California  
          workers.  Supporters assert that this bill would ensure that  
          millions of California workers who have been paying into the PFL  
          insurance program are able to use this benefit for parental  
          leave without risk of losing their job.  The need for expanded  
          and equitable access to parental leave in the state cannot be  
          understated.  The co-sponsors note that the benefits of parental  


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          leave on the health and welfare of the economy and our state's  
          working families have been well-documented.  Research shows that  
          parental leave, particularly when there is job protection,  
          increases new mothers' wage growth and future employment rates.   
          Fathers who take parental leave are more engaged with their  
          newborns, promoting greater gender equity at home and at work.   
          In addition, evidence strongly suggests that children enjoy many  
          short- and long-term benefits from parental leave, including  
          better health and higher high school graduation rates.
          Opponents argue that this bill will overwhelm small employers.   
          They assert that even though the leave under this bill is not  
          "paid" by the employer, that does not mean the small employer  
          will not suffer added costs.  While on leave, the employer will  
          have to: (1) maintain medical benefits while the employee is on  
          leave; (2) pay for a temporary employee to cover for the  
          employee on leave, usually at a higher premium given the limited  
          duration of employment; or (3) pay overtime to other employees  
          to cover the work of the employee on leave.  The cost of  
          overtime is higher given the increase of the minimum wage, which  
          will add to the overall cost on small employers.

          Opponents also contend that California already imposes a list of  
          family-friendly leaves of absences on employers, including paid  
          sick days, school activities leave, kin care, the paid family  
          leave program, pregnancy disability leave, and the CFRA.  This  
          list is in addition to the leaves of absence required at the  
          federal level.  They assert that imposing another 6-week leave  
          of absence, targeted specifically at small employers, is simply  
          too much for employers to bear.  

          Finally, opponents assert that this bill exposes employers to  
          costly litigation and cited to a study by an insurance provider  
          that estimated the cost for a small to mid-size employer to  
          defend and settle a single plaintiff discrimination claim was  
          approximately $125,000.  Opponents contend that this amount,  
          especially for a small employer, reflects the financial risk  
          associated with defending a lawsuit under FEHA, such as the  
          litigation that would be created by this bill, and the ability  


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          to leverage an employer into resolving or settling the case  
          regardless of merit.

          Prior Related Legislation
          This bill is similar to SB 1166 (Jackson), which failed passage  
          in the Assembly Committee on Labor and Employment earlier this  
          year.  However, among other changes, this bill extends the  
          employee threshold from 10 to 20 employees, and reduces the  
          amount of job-protected leave from 12 weeks to six (6) weeks.



          9 to 5

          9 to 5 California Chapter and National Association

          Alliance for Community Empowerment

          American Association of University Women

          American Civil Liberties Union of California

          Antelope Valley Hospital WIC Program

          Breastfeed LA


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          California Asset Building Coalition 

          California Black Health Network

          California Child Care Resource & Referral Network

          California Commission on the Status of Women and Girls 

          California Domestic Workers Coalition 

          California Edge Coalition

          California Employment Lawyers Association (co-sponsor)

          California Hunger Action Coalition

          California Immigrant Policy Center

          California Labor Federation, AFL-CIO

          California Latinas for Reproductive Justice

          California Legislative Women's Caucus

          California Partnership


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          California Rural Legal Assistance Foundation 

          California Teachers Association

          California Women's Law Center

          California Work and Family Coalition

          Career Ladders Project

          Center for Popular Democracy

          Center for WorkLife Law at UC Hastings

          Child Care Law Center

          Child Family Guidance Center

          Children's Hospital Los Angeles

          Common Sense Kids Action 

          Consumer Attorneys of California

          Courage Campaign


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          Employment Lawyers Association

          Equal Rights Advocates (co-sponsor)

          First 5 California

          Healthy Communities, Inc. 

          Legal Aid Society - Employment Law Center (co-sponsor) 

          Los Angeles County Professional Peace Officers Association

          Maternal and Child Health Access 

          Mexican American Legal Defense and Educational Fund

          Mujeres Unidas y Activas

          National Association of Social Workers, California Chapter

          National Association of Working Women

          National Council of Jewish Women California

          Numerous Individuals


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          Organization of SMUD Employees

          Our Family Coalition

          Parent Voices

          Raising California Together

          San Diego Court Employees Association 

          San Luis Obispo County Employees Association 

          Service Employees International Union

          South LA Health Projects

          Stronger California Advocates Network

          The Opportunity Institute

          Tradeswomen, Inc.

          UFCW Western State Council

          Voices for Progress


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          Western Center on Law and Poverty

          Women's Foundation of California


          Acclamation Insurance Management Services 

          Agricultural Council of California 

          Allied Managed Care 

          American Petroleum and Convenience Store Association 

          Associated Builders and Contractors - San Diego Chapter 

          Associated Builders and Contractors of California 

          CalAsian Chamber of Commerce 

          California Ambulance Association 

          California Association for Health Services at Home 


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          California Association of Joint Powers Authorities 

          California Association of Nursery and Garden Centers 

          California Bankers Association 

          California Business Properties Association 

          California Chamber of Commerce 

          California Farm Bureau Federation 

          California Hotel and Lodging Association 

          California Landscape Contractors Association 

          California League of Food Processors 

          California Manufacturers and Technology Association 

          California Professional Association of Specialty Contractors 

          California Restaurant Association 

          California Retailers Association 


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          California State Association of Counties 

          California Travel Association 

          Chambers of Commerce Alliance of Ventura and Santa Barbara  

          Civil Justice Association of California 

          Coalition of Small and Disabled Veteran Businesses 

          Culver City Chamber of Commerce 

          El Centro Chamber of Commerce 

          Family Winemakers of California 

          Flasher Barricade Association 

          Greater Bakersfield Chamber of Commerce 

          Greater Fresno Area Chamber of Commerce 

          Greater Merced Chamber of Commerce 

          International Franchise Association 


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          Lake County Chamber of Commerce 

          League of California Cities 

          National Federation of Independent Business 

          North Orange County Chamber of Commerce 

          Oxnard Chamber of Commerce 

          Palm Desert Area Chamber of Commerce 

          Plumbing-Heating-Cooling Contractors Association of California 

          Rancho Cordova Chamber of Commerce 

          Redondo Beach Chamber of Commerce 

          Santa Maria Chamber of Commerce Visitor & Convention Bureau 

          South Bay Alliance of Chambers of Commerce 

          The Greater Coachella Valley Chamber of Commerce 

          The Greater Conejo Valley Chamber of Commerce 


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          Western Carwash Association 

          Western Electrical Contractors Association 

          Western Growers Association 

          Yuba-Sutter Chamber of Commerce

          Analysis Prepared by:Ben Ebbink / L. & E. / (916)