BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1166| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1166 Author: Jackson (D), et al. Amended: 4/21/16 Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 4-1, 4/13/16 AYES: Mendoza, Jackson, Leno, Mitchell NOES: Stone SENATE JUDICIARY COMMITTEE: 4-2, 4/19/16 AYES: Jackson, Leno, Monning, Wieckowski NOES: Moorlach, Anderson NO VOTE RECORDED: Hertzberg SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen SUBJECT: Unlawful employment practice: parental leave SOURCE: California Employment Lawyers Association Equal Rights Advocates Legal Aid Society - Employment Law Center DIGEST: This bill prohibits an employer, of 10 or more employees, from refusing to allow an eligible employee to take up to 12 weeks of job protected parental leave to bond with a new child within one year of the child's birth, adoption or foster care placement. This bill also prohibits an employer from refusing to maintain and pay for the employee's continued group health coverage during the duration of the leave. SB 1166 Page 2 ANALYSIS: Existing law: 1)Provides that the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (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 position. 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 (approximately 60 percent of lost wages) 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 adoption. SB 1166 Page 3 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 leave. c) PFL does not provide job protection or return to work rights. 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. c) Employers are required to continue health coverage during PDL. This bill establishes a new parental leave right to bond with a new child either through birth, adoption or foster care placement. Specifically, this bill: 1)Prohibits an employer from refusing to allow an employee, with more than 12 months and at least 1,250 hours of service with the employer, 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. SB 1166 Page 4 2)Defines "employer" as a person who directly employs 10 or more persons or the state and any political or civil subdivision of the state and cities. 3)Requires employers to provide a guarantee of employment in the same or comparable position upon return, as specified. 4)Provides that the employee can 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)Requires employers to pay for continued group health coverage for eligible employees who take parental leave at the same level and conditions. 6)Specifies that this leave shall run concurrent with CFRA and FMLA, as specified, and the aggregate amount of leave - or combination of leaves - cannot exceed 12 work weeks in a 12-month period. 7)Specifies that an employee is entitled to take Pregnancy Disability Leave, in addition to the leave provided in this bill, CFRA and FMLA, if he or she is otherwise qualified. Background California has several medical leaves under which an employee may be able to take time off of work to care for his or her illness, that of specified family members or for the bonding with a new child through birth, adoption or foster care. Below is a brief summary of some of the leaves and their eligibility requirements. --------------------------------------------------------------------- SB 1166 Page 5 | | | | | CFRA/FMLA | | (Job Protected) | | PFL | | (No Job Protection) | | | | PDL | | (Job Protected) | | | | SB 1166 | | (Job Protected) | | | | | |Employers Covered | | 50 or more employees in 75 mile radius of worksite | | One or more (employee pays, employee gets) | | Five or more employees | | Ten or more employees | | | |Employee Eligibility | | | | 12+ months of service & worked 1,250 hours in prior 12 months | | | | Once employee earns $300 in base period for fund contribution | | | | Immediate as necessary | | | | 12+ months of service & worked 1,250 hours in prior 12 months | | | | | |Reason for Leave | | | |Employee serious health condition; seriously ill family member care; | | bond with newborn or newly placed adopted or foster child | | | |Care for seriously ill family member; bond with a child within 1year | | of birth, foster care or adoption placement | | | |Disability due to pregnancy, childbirth or related medical condition | | | | | | Bond with a child w/in 1 year of birth, adoption or foster care | | placement | SB 1166 Page 6 | | | | |Length of Leave | | | | 12 weeks in 12-month period | | | | 6 weeks in 12-month period | | | | Up to 4 months | | | | Up to 12 weeks | | | | | |Paid or Unpaid | | | | Unpaid, may run concurrent with other paid leave | | | | Partial wage replacement | | | | Unpaid, may run concurrent with SDI for partial wage replacement | | | | Unpaid, employee can use vacation, paid sick time | | | | | |Continued Health Coverage | | | | Yes | | | | No | | | | Yes | | | | Yes | | | | | | | | | --------------------------------------------------------------------- Parental Leave Policies in Other States. The United States is currently the only developed country in the world that does not have any government sponsored paid maternity or paternity leave law for employees to take time off SB 1166 Page 7 to care for their loved ones. Availability of such a leave is left at the discretion of each state and its policies and employer practices. According to the U.S. Department of Labor, only 12 percent of private-sector workers have access to paid family leave through their employers. Access is particularly low among low-wage workers, Hispanics and African Americans. Many businesses have voluntarily adopted leave policies, a trend most recently seen in corporate America with companies like Microsoft offering up to 20 weeks of fully paid parental leave. [NOTE: Please see the policy committee analysis for more information on leave policies in other states.] San Francisco. The Paid Parental Leave for Bonding with New Child Ordinance was passed by the San Francisco Board of Supervisors and signed by Mayor Lee on April 21, 2016. The ordinance requires employers to help provide fully paid family leave for new parents. In conjunction with the PFL program, granting a 60% wage replacement for up to six weeks, the San Francisco ordinance would require businesses with more than 20 employees to plug that gap by paying the remaining 40% of their employees' wages. The law takes effect January 1, 2017, with a gradual phase in for smaller businesses. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, the Department of Fair Employment and Housing indicates that it would incur General Fund costs of $248,000 in 2016-17, and $226,000 annually in the out years to implement the provisions of this bill. SUPPORT: (Verified5/27/16) SB 1166 Page 8 California Employment Lawyers Association (co-source) Equal Rights Advocates (co-source) Legal Aid Society - Employment Law Center (co-source) Alliance for Community Empowerment American Association of University Women American Civil Liberties Union of California Breastfeed LA 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 Hunger Action Coalition California Immigrant Policy Center California Labor Federation, AFL-CIO California Latinas for Reproductive Justice California Partnership 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 Child Care Law Center Children's Hospital Los Angeles Common Sense Kids Action Consumer Attorneys of California Courage Campaign Employment Lawyers Association Equal Rights Advocates Healthy Communities, Inc. 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 Organization of SMUD Employees Our Family Coalition Parent Voices SB 1166 Page 9 Raising California Together San Diego Court Employees Association San Luis Obispo County Employees Association Service Employees International Union Stronger California Advocates Network The Opportunity Institute Tradeswomen, Inc. Voices for Progress Western Center on Law and Poverty Women's Foundation of California 9 to 5 3 individuals OPPOSITION: (Verified5/27/16) 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 Landscape Contractors 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 Greater Conejo Valley Chamber of Commerce League of California Cities National Federation of Independent Business Western Carwash Association Western Growers Association ARGUMENTS IN SUPPORT: Proponents argue that while California is one of only four states to offer paid family leave for new parents, it remains impossibly out of reach for most low-wage earners and those who work for small employers. They believe that this bill will drastically improve access to parental leave SB 1166 Page 10 by addressing one of its biggest barriers - job protection. According to the author, a field poll found that almost two out of five employees who were eligible to use PFL, but did not apply, chose not to because they feared losing their job or other negative consequences at work. Proponents further argue that the existing CFRA and FMLA only cover employees who work for larger companies with 50 or more employees, leaving over 40% of California's workforce ineligible for job protected leave because their employer is too small. This bill ensures that workers who have been paying into the PFL program are able to use this benefit without fear of losing their job. ARGUMENTS IN OPPOSITION: Opponents argue that this bill will overwhelm small businesses with as few as 10 employees by requiring them to provide 12-weeks of protected parental leave, with the threat of costly litigation for violations. They argue that while small employers must provide their employees with PDL, they are not subject to FMLA or CFRA because large employers are the ones likely capable of accommodating such an absence. Further, they argue that this bill creates a new, separate and independent leave than that of CFRA and FMLA. To the extent that it is interpreted through case law or regulation differently, that lack of conformity could create the opportunity for two 12-week leave of absences for employers with 50 or more employees. While the bill tries to address this issue, they argue that the problem remains because California cannot preempt or limit the application of federal law under FMLA. Opponents also argue that this bill labels an employer's failure to provide the 12-week leave as an "unfair employment practice," a label that exposes an employer to costly litigation. An aggrieved employee could pursue a claim against the employer seeking: compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney's fees. According to opponents, it costs a small to mid-size employer approximately $125,000 to defend and settle a single claim - a cost they believe reflects the financial risk small employers face. Prepared by:Alma Perez-Schwab / L. & I.R. / (916) 651-1556 SB 1166 Page 11 5/28/16 16:46:00 **** END ****