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New California Leave Law Impacts All Companies with 5 or More Employees; And New COVID-19 Law for Large Employers

Labor & Employment Alert James Y. Wu

California State Capital with State Flag

On September 17, 2020, California Governor Gavin Newsom signed legislation greatly expanding family and medical leave of absence requirements for all employers with at least 5 employees in California. More specifically, SB1383 expands the California Family Rights Act ("CFRA") and requires employers with 5 or more employees to provide certain unpaid, protected family/medical/military leave to eligible employees. The new law goes into effect on January 1, 2021, thus employers must take steps to comply immediately.

Current Elements of the CFRA

Currently, the CFRA (and the federal Family Medical Leave Act ("FMLA")) provides that covered companies must provide eligible employees up to 12 workweeks of unpaid protected leave during a 12-month period, if needed due to the employee's own serious health condition, to care for a family member with a serious health condition, or to bond with a new child. The law only applies to companies with 50 or more employees within a 75-mile radius (or 20 or more employees within a 75-mile radius for new child leave). Additionally, to be eligible for CFRA/FMLA protected unpaid leave, the employee must have a) worked for at least 12 months with the company; and b) worked at least 1,250 hours during the previous 12-month period of employment.

Changes to the CFRA - Effective January 1, 2021

New Eligibility Threshold Is Now 5 Employees: The CFRA will apply to much smaller employers - those with five (5) or more employees (down from 50, or 20 employees for new parent leave). Governor Newsom stated that this lower threshold will impact "nearly 6 million Californians".

Elimination of 75-mile Radius Requirement: Additionally, the new law eliminates the requirement that employees work within 75 miles of a worksite. As a result, if a company has 5 employees who work in distant parts of the state, the company would still be covered by the CFRA. Furthermore, larger employers with remote workers or workers in smaller locations would now be covered by the new CFRA.

More "Family Members": The law allows employees to take unpaid protected leave to care for a "family member" with a serious health condition. The current CFRA and FMLA define "family member" to be the employee's parent, child, spouse or domestic partner. Starting January 1, 2021, however, "family member" under the CFRA will expand to include grandparent, grandchild, and sibling. Thus, employers (even larger employers already subject to the CFRA/FMLA) will need to update policies and forms and other documentation to include these additional family members.

Significantly, starting January 1, 2021, it appears that an employee may be able to take 24 weeks of leave under the CFRA and FMLA in certain situations due to the differing definitions of "family member." For example, an employee may take 12 weeks under the CFRA to care for a grandparent with a serious health condition. Then, that employee may also be eligible under the FMLA to take another 12 weeks of leave to care for a spouse with a serious health condition, for a combined total of 24 weeks. Also, if the employee also needs leave due to pregnancy, she could also be entitled to up to an additional 4 months of leave under California Pregnancy Disability Leave.

Added Leave for Military Exigency: The new law adds that up to 12 weeks of unpaid protected leave is also available due to a qualifying exigency related to covered active duty or call to covered active duty of an employee's spouse, domestic partner, child, or parent in the United States Armed Services. This new leave parallels the same leave provided by the FMLA, so larger employers who were already subject to the FMLA will be familiar with this provision. However, all employers with between 5 and 49 employees will now be covered by this new provision as well.

Parents Who Work For the Same Employer: Currently, parents who work for the same employer face a collective limit of 12 weeks of leave that may be taken to bond with their child (birth, adoption, or placement of foster child). SB 1383 eliminates this limitation, and thus, each parent/employee will be entitled to up to 12 weeks of leave to bond with a new child, and the parents could request leave for the same 12 weeks.

"Key Employee" Exception Eliminated: Under the CFRA, "Key Employees" who are among the highest 10% paid employees in the company could be refused reinstatement when necessary due to financial harm to the company. The new law eliminates this exception.

New Mediation Program for Small Employers: While SB 1383 was pending, on September 9, 2020, Governor Newson signed AB 1867 which, among other things, establishes a new "small employer family leave mediation program" applicable to companies who have between 5 and 19 employees. This pilot program was created because of concerns that small employers would face increased litigation risk due to non-compliance with (or even ignorance of) the new provisions of the CFRA. These small employers were deemed to be most vulnerable since they may not have a dedicated Human Resources professional or employment attorney.

Thus, if a small employer receives a Right-To-Sue letter from the California Department of Fair Employment and Housing ("DFEH") regarding a claim under the new CFRA, then the employer may request mandatory mediation through the DFEH. Once this request is made, the employee cannot pursue a claim in civil court until the mediation is completed. While there is no requirement that the parties resolve a claim at the mediation, the goal is to help resolve disputes before costly litigation is initiated. This mediation program will be in effect until January 1, 2024, unless extended.

New COVID-19 Supplemental Paid Sick Leave

In addition to the small employer mediation program for family leave claims, AB 1867 also immediately established supplemental COVID-19 paid sick leave for private employers with 500 or more employees anywhere in the nation, as well as public and private employers of first responders and health care employees who opted out of the leave under the federal law. This portion of AB 1867 was intended to fill a void not addressed by the federal Families First Coronavirus Response Act ("FFCRA") and Governor Newsom's prior Executive Order that provided paid sick leave to food sector employees affected by COVID-19. The new supplemental paid sick leave is similar to the FFCRA and the prior Executive Order. For example, a full-time worker of a company with over 500 employees now is entitled to up to 80 hours of paid sick leave for a COVID-19-related absence. Part-time employees and/or employees who work a varied number of hours are also included in the new law. Notably, if the employer already has provided employees with paid sick time off for the same COVID-19-related reasons, then the employer may already be in compliance. Since this new entitlement will impact companies very differently, employers should immediately examine the new law and consult their employment law attorney for additional analysis. This law will expire on December 31, 2020.

Key Takeaways For Employers:

  1. Update forms, documents, and Employee Handbooks to account for the changes to the CFRA. This may mean creation of these policies for smaller employers, or editing for larger employers to account for the expanded definition of "family members," elimination of the "75-mile radius," and elimination of the "key employee" exception, for example.
  2. Train Human Resources personnel regarding the new CFRA and COVID-19 supplemental paid sick leave.
  3. Understand unpaid vs. paid time off provisions: Companies should understand that the CFRA/FMLA, and Pregnancy Disability Leave provide protected unpaid time off, only. None of these laws provide for paid leave. Employers may sometimes require employees to exhaust paid sick leave, vacation, and/or PTO for income replacement while on these leaves. Such requirements should be reviewed per leave law, and stated in the Employee Handbook. Additionally, even if not mandated by the company, employees may elect to use their accrued paid time off banks. Furthermore, employees would likely be entitled to up to eight (8) weeks of partial income replacement from the State. To receive that "Paid Family Leave" payout, the employee should apply to the Employment Development Department, and the company Handbook should contain this information as well.
  4. For companies with between 5 and 19 employees: Provide training to the appropriate employees who will be able to recognize a DFEH Notice of Right To Sue, and how to determine if the alleged claim(s) would fall under the new small employer mediation program.
  5. For companies with 500 or more employees: Adjust/update itemized wage statements to add the new COVID-19 supplemental paid sick leave total and usage amounts.

For more information on these new laws, or other California employment laws, contact your Quarles & Brady attorney or