BILL ANALYSIS Ó SB 1166 Page 1 Date of Hearing: June 22, 2016 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair SB 1166 (Jackson) - As Amended April 21, 2016 SENATE VOTE: 22-14 SUBJECT: Unlawful employment practice: parental leave SUMMARY: Enacts the "New Parent Leave Act" to, among other things, require an employer of 10 or more employees to allow eligible employees to take up to 12 weeks of job-protected parental leave to bond with a new child. Specifically, this bill: 1)Defines "employer" to mean either of the following: a) A person who directly employs 10 or more persons to perform services for a wage or salary. b) The state and any political subdivision of the state and cities. 2)Makes it an unlawful employment practice for an employer to refuse to allow an employee, with more than 12 months and at SB 1166 Page 2 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. 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 ate 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)Provides that parental leave taken pursuant to this bill shall run concurrently with leave taken pursuant to the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), and that the aggregate amount of leave (or combination of leaves) shall not exceed 12 workweeks 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 the employee is otherwise qualified for that leave. SB 1166 Page 3 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 SB 1166 Page 4 placement of the child in connection with foster care or adoption. 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. SB 1166 Page 5 FISCAL EFFECT: 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. COMMENTS: 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 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 SB 1166 Page 6 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. SB 1166 Page 7 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 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. Arguments in Support According to the author: "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 [PFL] 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. [This bill] 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 SB 1166 Page 8 of their new child and their family's financial security." The co-sponsors of this bill 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, the 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 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. 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. Arguments in Opposition SB 1166 Page 9 Opponents argue that the lack of conformity to the CFRA and FMLA could create an opportunity for an employee to obtain over 24 weeks of protected leave in one year. 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, 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 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. REGISTERED SUPPORT / OPPOSITION: SB 1166 Page 10 Support 9 to 5 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 Employment Lawyers Association (co-sponsor) SB 1166 Page 11 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 at UC Hastings Child Care Law Center SB 1166 Page 12 Children's Hospital Los Angeles Common Sense Kids Action Consumer Attorneys of California Courage Campaign 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 SB 1166 Page 13 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 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. SB 1166 Page 14 UFCW Western State Council Voices for Progress Western Center on Law and Poverty Women's Foundation of California 3 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 Civil Justice Association SB 1166 Page 15 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 Culver City Chamber of Commerce Greater Conejo Valley Chamber of Commerce League of California Cities SB 1166 Page 16 National Federation of Independent Business Southwest California Legislative Counsel Western Carwash Association Western Growers Association Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091