BILL ANALYSIS                                                                                                                                                                                                    Ó



                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular Session


          SB 1166 (Jackson)
          Version: February 18, 2016
          Hearing Date:  April 19, 2016
          Fiscal: Yes
          Urgency: No
          TMW


                                        SUBJECT
                                           
                    Unlawful employment practice:  parental leave

                                      DESCRIPTION 

          This bill would establish the New Parent Leave Act and make it  
          an unlawful employment practice for an employer, who employs 10  
          or more employees, to refuse to allow an employee, with 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, to take up to 12 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.

          (This analysis reflects author's amendments to be offered in  
          Committee.)

                                      BACKGROUND  

          In 1980, California enacted the California Fair Employment and  
          Housing Act (FEHA), which prohibited various employment  
          discrimination practices, and included protections for employees  
          taking pregnancy disability leave (PDL).  (AB 3165, Fenton, Ch.  
          992, Stats. 1980.)  PDL allows an employee to take a leave for a  
          reasonable period of time, not to exceed four months, and  
          thereafter return to work, as specified. The employee is  
          entitled to utilize any accrued vacation leave during this  
          period of time, which means that period during which the female  
          employee is disabled on account of pregnancy, childbirth, or a  
          related medical condition.  (Gov. Code Sec. 12945.)  PDL  
          provides an employee the right to take "intermittent" leave for  
          a pregnancy-related disability, as needed, which can be taken in  







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          small increments (hours, days, weeks, or months).  For example,  
          a pregnant employee, with the advice of her doctor, has the  
          right to take a few hours of leave each day or on certain days  
          because of severe morning sickness or for a doctor's  
          appointment, or for other prenatal care.  An employee who is  
          taking PDL is entitled to the continuation of her health  
          benefits for the entire duration of her leave, up to four  
          months.

          Another protection under FEHA is the Moore-Brown-Roberti Family  
          Rights Act (also known as the California Family Rights Act  
          (CFRA)), which makes it an unlawful employment practice for an  
          employer of 50 or more employees to refuse to grant a request by  
          an employee to take an unpaid family care leave of up to four  
          months unless a refusal is necessary to prevent undue hardship  
          to the employer's operation.  (AB 77 (Moore, Ch. 462, Stats.  
          1991); SB 193 (Marks, Ch. 580, Stats. 1993).)  Family care leave  
          may be taken in one or more periods, as long as it does not  
          exceed a total of four months within a 24 month period from the  
          date the leave commenced.  However, when family care leave is  
          taken in conjunction with the maximum pregnancy disability  
          leave, family care leave shall be for no more than one month.   
          To be eligible for family care leave, an employee must have more  
          than one year of continuous service with the employer and must  
          be eligible for other employee benefits.  The Department of Fair  
          Employment and Housing enforces CFRA.

          In 1993, the federal Family and Medical Leave Act (FMLA),  
          enforced by the United States Department of Labor, was  
          established and requires employers of 50 of more employees to  
          provide unpaid leave of up to 12 weeks annually to employees for  
          similar reasons.  Additionally, the FMLA covers the medical  
          condition of the employee, and permits leave for the placement  
          of a child for foster care.  Employers covered by the law are  
          required to maintain any pre-existing health coverage during the  
          leave period and, once the leave period is concluded, to  
          reinstate the employee to the same or equivalent job.  The  
          federal law also specifies that the FMLA shall not supersede any  
          provision of State or local law that provides greater family or  
          medical leave rights.  AB 1460 (Moore, Chapter 827, Statutes of  
          1993) conformed California's employment discrimination laws  
          under FEHA to the new requirements under the FMLA.

          This bill would establish the New Parent Leave Act under FEHA  








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          and make it an unlawful employment practice for an employer, as  
          defined, to refuse to allow an employee to take up to 12 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.

          This bill was heard by the Senate Labor and Industrial Relations  
          Committee on April 13, 2016, and passed out on a vote of 4-1.

                                CHANGES TO EXISTING LAW
           
           Existing law  , the federal Pregnancy Discrimination Act (PDA),  
          generally prohibits discrimination in employment on the basis of  
          pregnancy, childbirth, or related medical conditions.  (42  
          U.S.C. 2000e-2; 42 U.S.C. 2000e(k).)
           
            Existing law  , the federal Family and Medical Leave Act (FMLA),  
          prohibits employers with at least 50 employees from failing to  
          maintain and pay for group health plan coverage, as specified,  
          for leave taken by the employee for the birth of a child for a  
          period of up to 12 workweeks.  An employer may recover the group  
          health plan premium from the employee in the event the employee  
          fails to return from leave, as specified, and the failure to  
          return from leave is not a result of a pregnancy or child birth  
          related condition or other circumstances beyond the control of  
          the employee.  (29 U.S.C. Sec. 2614(c).)  
           
          Existing law  , the Fair Employment and Housing Act (FEHA),  
          generally prohibits discrimination in employment on the basis of  
          pregnancy, childbirth, or related medical conditions.  (Gov.  
          Code Sec. 12940.)  Unless otherwise specified, FEHA applies to  
          employers with five or more employees.  (Gov. Code Sec.  
          12926(d).)

          Existing law  , the pregnancy disability leave law (PDL),  
          generally prohibits employers with at least five employees from  
          refusing to allow female employees to take a leave of absence  
          due to a pregnancy, childbirth, or related medical condition not  
          to exceed four months.  (Gov. Code Sec. 12945.)

           Existing law  , the Moore-Brown-Roberti Family Rights Act (the  
          California Family Rights Act (CFRA)) prohibits employers with at  








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          least 50 employees from failing to maintain and pay for group  
          health plan coverage, as specified, for leave taken by the  
          employee for the birth of a child for a period of up to 12  
          workweeks.  An employer may recover the group health plan  
          premium from the employee in the event the employee fails to  
          return from leave, as specified, and the failure to return from  
          leave is not a result of a pregnancy or child birth related  
          condition or other circumstances beyond the control of the  
          employee.  (Gov. Code Sec. 12945.2(f).)

           This bill  would establish the New Parent Leave Act and make it  
          an unlawful employment practice under FEHA for an employer, as  
          defined, to do either of the following:
           refuse to allow an employee, with 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,  
            upon request, to take up to 12 weeks of parental leave to bond  
            with a new child within one year of the child's birth,  
            adoption, or foster care placement, and provide:
             o    if, on or before the commencement of this parental  
               leave, the employer does not provide a guarantee of  
               employment in the same or a comparable position upon the  
               termination of the leave, the employer would be deemed to  
               have refused to allow the leave; and
             o    the employee would be entitled to 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; and
           refuse to maintain and pay for coverage for an eligible  
            employee who takes parental leave pursuant to this section  
            under a group health plan, as defined, for the duration of the  
            leave, not to exceed 12 weeks over the course of a 12-month  
            period, commencing on the date that the parental leave  
            commences, at the level and under the conditions that coverage  
            would have been provided if the employee had continued to work  
            in his or her position for the duration of the leave.

          This bill  would define "employer" to mean either:  (1) any  
          person who directly employs 10 or more persons to perform  
          services for a wage or salary; or (2) the state, and any  
          political or civil subdivision of the state and cities.
           
          This bill  would require that parental leave to run concurrently  
          with leave taken pursuant to CFRA and the FMLA, except for leave  








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          taken for a disability on account of pregnancy, childbirth, or  
          related medical condition.

           This bill  would specify that the aggregate amount of leave taken  
          pursuant to this bill, CFRA, or the FMLA, or any combination of  
          these laws, except for leave taken for a disability on account  
          of pregnancy, childbirth, or related medical conditions, shall  
          not exceed 12 workweeks in a 12 month period.

           This bill  would entitle an employee to take, in addition to  
          leave provided pursuant to this bill, CFRA, and the FMLA, leave  
          provided pursuant to PDL if the employee is otherwise qualified  
          for that leave.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            California falls behind Maine, Minnesota, Oregon, Washington  
            State and the District of Columbia in providing job protected  
            parental leave for small business employees.  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.

            While California's worker funded Paid Family Leave program  
            provides employees with partial wage replacement while caring  
            for a new child, many employees are unable to use this benefit  
            for fear of losing their jobs.  In fact, a 2011 field poll  
            found that almost 2 out of 5 employees who were eligible to  
            use PFL, but did not apply for the benefit, chose not to  
            because they feared losing their job or other negative  
            consequences at work.

            SB 1166 (Jackson) ensures that the California workers who have  
            been paying into the Paid Family Leave insurance program are  
            able to use this benefit for parental leave without risk of  
            losing their job.  No one should have to choose between the  
            wellbeing of their new child and their family's financial  
            security. 








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          2.  Providing new job protected parental leave  

          This bill would establish new FEHA protections under the New  
          Parent Leave Act (NPLA) and make it an unlawful employment  
          practice for an employer of 10 more employees to refuse to allow  
          an employee to take up to 12 weeks of parental leave to bond  
          with a new child within one year of the child's birth, adoption,  
          or foster care placement.  Additionally, this bill would provide  
          that:
           if, on or before the commencement of this parental leave, the  
            employer does not provide a guarantee of employment in the  
            same or a comparable position upon the termination of the  
            leave, the employer would be deemed to have refused to allow  
            the leave; and
           the employee would be entitled to 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.

          Notably, for an employee to qualify for this leave of absence,  
          he or she must have worked for the employer for more than 12  
          months and have at least 1,250 hours of service with the  
          employer during the previous 12-month period, which is the same  
          requirement as a leave of absence taken under CFRA.

          Co-sponsors argue that although new birth mothers who work for a  
          small employer (5-49 employees) are able to take 6-8 weeks of  
          job protected leave to recover from the birth of their child  
          under PDL, new birth fathers and new adoptive parents working  
          for an employer of the same small size have no right to job  
          protected leave when a new baby comes into their lives.   
          Further, co-sponsors contend that because of the eligibility  
          requirements under these laws, nearly half of the workforce is  
          not covered and employers can punish workers for taking time to  
          care for a new child.

          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 PDL  
          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  








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          understated.  Co-sponsors note that the benefits of parental  
          leave on the health and welfare of the economy and our state's  
          working families have been well-documented.  Research shows that  
          paid family leave, particularly when there is job protection,  
          increases new mothers' wage growth and future employment rates.   
          (Council of Economic Advisors, The Economics of Paid and Unpaid  
          Leave (June 2014)  
           [as of Apr. 10, 2016].)  Fathers who take parental  
          leave are more engaged with their newborns, promoting greater  
          gender equity at home and at work. (Michelle J. Budig, The  
          Fatherhood Bonus and the Motherhood Penalty: Parenthood and the  
          Gender Gap in Pay  
           [as of Apr. 10,  
          2016].)  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.  
           (Sakiko Tanaka, The Economic Journal Volume 115, Parental leave  
          and child health across OECD countries (June 2005)  
           [as of Apr. 10, 2016]; Pedro Carneiro, Katrine V. Løken  
          and Kjell G. Salvanes, Journal of Political Economy, Vol. 123,  
          No. 2  A Flying Start? Maternity Leave Benefits and Long-Run  
          Outcomes of Children (Apr. 2015).  
           [as of Apr. 10, 2016].)

          3.  Requiring employer-paid health insurance coverage for parental  
            bonding  

          Existing federal and state law, the FMLA and CFRA, respectively,  
          require group health insurance to be maintained by an employer  
          for an employee on a leave of absence to care for or bond with a  
          newly born, foster, or adopted child.  The FMLA applies to all  
          public agencies, including local, state, and federal employers,  
          local education agencies (schools), and private sector employers  
          who employ 50 or more employees for at least 20 workweeks in the  
          current or preceding calendar year.  The general definition of  
          employer under FEHA means an employer with five or more  
          employees.  (Gov. Code Sec. 12926(d).)  However, CFRA, which is  
          included under FEHA, specifically applies to private employers  
          with 50 or more part-time or full-time employees, including  
          non-profit religious organizations.  Covered employers also  








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          include the State of California and any of its political and  
          civil subdivisions, and cities and counties, regardless of the  
          number of employees.

          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 leave under the NPLA.  This bill would apply  
          to a private employer who is employing 10 or more employees, as  
          well as the state and local agency employers covered under CFRA.  
           This bill would limit the duration of the required coverage to  
          12 weeks over the course of a 12-month period, commencing on the  
          date that the parental leave commences, at the level and under  
          the conditions that coverage would have been provided if the  
          employee had continued to work in his or her position for the  
          duration of the leave.  

          Arguably, a lack of medical coverage during parental bonding  
          leave discourages and prevents new parents from taking leave to  
          bond with their new children.  Accordingly, both the FMLA and  
          CFRA require group health plan coverage to continue during that  
          family bonding leave.  However, for employees of employers with  
          less than 50 employees, they are left to make the difficult  
          decision of whether they can afford to go without health  
          coverage during the parental leave or whether they will have to  
          sacrifice parental bonding to maintain their health coverage.   
          This bill would provide the same group health insurance coverage  
          required under CFRA and FMLA, but extend the required coverage  
          to employees of small employers while the employee is on new  
          parent bonding leave.

          4.  Oppositions' concerns  

          Opponents of the bill contend that it will overwhelm small  
          businesses with as few as five employees by allowing an employee  
          who has only worked for the employer one day to receive 12 weeks  
          of protected parental leave, with the threat of costly  
          litigation for violating this leave.  Opponents note that small  
          employers with only five employees were specifically excluded  
          from FMLA and CFRA; these protected leaves of absence only apply  
          to employers with 50 or more employees because only large  
          employers are the only ones likely capable of accommodating such  
          an extensive amount of time off (up to 28 weeks/7 months).   
          Notably, the author's amendments agreed to in the Senate Labor  
          and Industrial Relations Committee make the bill applicable to  








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          an employer of 10 or more employees.

          Opponents also contend that because this bill does not impose  
          the requirements under CFRA and FMLA that an employee work for  
          one year and at least 1,250 hours before taking a 12-week  
          protected leave of absence.  Rather, this bill would make an  
          employer with only five employees, or an employer with 500  
          employees, automatically have to provide an employee with a  
          12-week leave of absence, no matter the limited hours or the  
          time worked for the employer, which is simply too significant  
          for California employers to manage.

          Opponents also argue that the lack of conformity to the CFRA and  
          FMLA one year and 1,250 hours worked requirements could create  
          an opportunity for an employee to obtain over 24 weeks of  
          protected leave in one year.  Opponents provide the example that  
          an employee who has only worked 800 hours could take the 12  
          weeks of leave under this bill, return to work for another 450  
          hours, and then take another 12 weeks of leave under CFRA and  
          FMLA.  However, the author's amendments would mirror the CFRA  
          work requirements, which should resolve this concern.

          Opponents note that last year, Governor Brown vetoed SB 406  
          (Jackson, 2015) based, in part, on the fact that the bill would  
          "in certain circumstances, require employers to provide  
          employees up to 24 weeks of family leave in a 12 month period.   
          I am open to legislation to allow workers to take leave for  
          additional family members that does not create this anomaly."   
          Opponents contend that this bill also creates that anomaly of  
          24-weeks of protected leave in a 12 month period.

          Opponents note that while the bill attempts to address this  
          issue by stating that the total amount of leave an employee can  
          receive under this bill, CFRA, and FMLA is 12 weeks in a  
          12-month period, opponents argue that this does not fix the  
          situation.  Opponents assert that California cannot preempt or  
          limit the application of federal law under FMLA, and this bill  
          appears to nullify any limitation on total leave taken as set  
          forth in another section of the bill as it explicitly states an  
          employee is entitled to take CFRA or FMLA leave, assuming the  
          employee is qualified for that leave.

          Opponents also argue that this bill is an unprecedented mandate;  
          they were unable to identify any other state that imposes such  








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          an extensive leave of absence on employers with only five  
          employees who have worked only one day for the employer.   
          Opponents point to a 2013 study for the National Conference of  
          State Legislatures, which reported that over 40 states impose  
          only a 12-week leave of absence on employers with 50 or more  
          employees with the same hours worked requirement as FMLA and  
          CFRA.  Opponents note that of the remaining states that differ,  
          all have an employee size threshold or hours worked requirement,  
          or both, that is significantly higher than proposed under this  
          bill.

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

          5.  Author's amendments  

          This bill was approved by the Senate Labor and Industrial  
          Relations Committee on April 13, 2016.  Due to procedural timing  
          constraints, the author agreed in that Committee to take the  
          following amendments in this Committee.

             Author's amendments  :

             1.   On page 2,  in line 2, after "employer" insert ", as  
               defined in subdivision (d), "
                                                                                            2.   On page 2, in line 3, after "employee," insert "with  
               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,"
             3.   On page 2, below line 37, insert:
          (d)  "Employer" means either of the following:
                  (1) Any person who directly employs 10 or more persons  
                  to perform services for a wage or salary.
             (2) The state, and any political or civil subdivision of the  
          state and cities.









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           Support  :  9 to 5; Alliance for Community Empowerment; American  
          Association of University Women; American Civil Liberties Union  
          of California; BreastfeedLA; California Asset Building  
          Coalition; California Black Health Network; California Domestic  
          Workers Coalition; California Hunger Action Coalition;  
          California Labor Federation, AFL-CIO; California Latinas for  
          Reproductive Justice; California Immigrant Policy Center;  
          California Women's Law Center; California Work and Family  
          Coalition; Career Ladders Project; Center for Popular Democracy;  
          Center for WorkLife Law, UC Hastings; Child Care Law Center;  
          Children's Hospital Los Angeles; First 5 Santa Clara County;  
          Healthy Communities, Inc.; Mujeres Unidas y Activas; National  
          Association of Social Workers - California Chapter; National  
          Council of Jewish Women (CA Edge Coalition); Parent Voices;  
          Raising California Together; Stronger California Advocates  
          Network; The Opportunity Institute; Tradeswomen, Inc.; Voices  
          for Progress; Western Center on Law and Poverty; Women's  
          Foundation of California; 2 Individuals

           Opposition  :  Agricultural Council of California; Associated  
          Builders and Contractors of California; California Ambulance  
          Association; California Association of Joint Powers Authorities;  
          California Chamber of Commerce; California Farm Bureau  
          Federation; California Hotel and Lodging Association; California  
          League of Food Processors; California Manufacturers & Technology  
          Association; California Professional Association of Specialty  
          Contractors; California Restaurant Association; California  
          Retailers Association; California State Association of Counties;  
          Civil Justice Association of California; National Federation of  
          Independent Business; Western Carwash Association; Western  
          Growers Association

                                        HISTORY
           
           Source  :  California Employment Lawyers Association; Equal Rights  
          Advocates; Legal Aid Society - Employment Law Center

           Related Pending Legislation  :  None Known

           Prior Legislation  :

          SB 406 (Jackson, 2015) would have expanded various provisions of  
          law related to unpaid family and medical leave under the  








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          California Family Rights Act (CFRA).  SB 406 was vetoed by  
          Governor Brown because he believed the expansion provided in the  
          bill created a disparity between California's law and the FMLA,  
          and, in certain circumstances, could require employers to  
          provide employees up to 24 weeks of family leave in a 12 month  
          period.

          SB 299 (Evans, Chapter 510, Statutes of 2011) prohibited  
          employers from refusing to maintain and pay for insurance  
          coverage, as specified, for the duration of maternity leave up  
          to four months, as specified, and authorized employers to  
          recover insurance premiums from the employee if the employee  
          fails to return from maternity leave, provided that the  
          employee's failure to return from maternity leave is not due to  
          leave taken under CFRA, for a health condition that entitles the  
          employee leave, or for another circumstance beyond the control  
          of the employee.

          AB 592 (Lara, 2011) prohibited employers from interfering with  
          or restraining an employee's exercise of pregnancy disability  
          leave or rights under PDL or CFRA.

          AB 1460 (Moore, Chapter 827, Statutes of 1993) See Background.

          SB 193 (Marks, Chapter 580, Statutes of 1993) See Background.

          AB 77 (Moore, Chapter 462, Statutes of 1991) See Background.

          AB 3165 (Fenton, Chapter 992, Statutes of 1980) See Background.

           Prior Vote  :  Senate Committee on Labor and Industrial Relations  
          (Ayes 4, Noes 1)

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