San Francisco First City to Require Fully-Paid Parental Leave

On April 21, 2016, San Francisco Mayor Ed Lee signed the Paid Parental Leave Ordinance (PPLO). The ordinance requires San Francisco employers to provide eligible employees with up to six weeks of fully paid parental leave for the purpose of bonding with a new child. The PPLO works in conjunction with California’s Paid Family Leave (PFL) program, which provides eligible employees with 55 percent of their wages for up to six weeks while on leave to bond with a new child or care for a seriously ill family member. In turn, the PPLO requires employers to provide “supplemental compensation” that, when added to the California PFL compensation, equals 100 percent of the employee’s gross weekly wage. Plainly stated, the PPLO requires employers to pay the remaining 45 percent of an eligible employee’s gross weekly wage.

The PPLO goes into effect on January 1, 2017 for San Francisco businesses with 50 or more employees. Application of the ordinance will expand to smaller employers in the following phases:

  • Effective July 1, 2017, the ordinance will apply to employers with 35 or more employees.
  • Effective January 1, 2018, the ordinance will apply to employers with 20 or more employees.

To be eligible for supplemental compensation an employee must:

  • Have begun employment with the covered employer at least 180 days prior to the start of the leave period;
  • Work at least eight hours a week;
  • Spend at least 40 percent of his or her workweek in San Francisco; and
  • Qualify for benefits under California’s PFL program.

Eligibility is based on whether the employee works, not lives, in San Francisco.

An employee must sign a form agreeing to reimburse the full amount of supplemental compensation received from the employer(s) if the employee voluntarily separates from employment within 90 days of the end of the employee’s leave period and if the employer requests such reimbursement in writing.

Employers may also require that employees use up to two weeks of unused accrued vacation time prior to receiving the paid parental leave. If the employee does not agree to use his or her accrued vacation time, the employer is not required to provide supplemental compensation.

The PPLO requires employers to post a notice created by the San Francisco Office of Labor Standards Enforcement (OLSE) at each workplace or job site informing employees of their rights under the SFPPLO. Notices must be posted in English, Spanish, Chinese, and any language spoken by at least five percent of employees at the workplace or site. Employers must also keep records documenting supplemental compensation paid for at least three years.

Prepare Now

What covered employers should do to prepare for the new law:

  1. Review budgets in preparation for additional wage replacement requirements.
  2. Update policies and training materials to reflect the new employer requirements.
  3. Download and conspicuously post the OLSE-created notice at each worksite where covered employees work informing them of the San Francisco PPL rights in English, Spanish, Chinese, and other languages spoken by at least five percent of employees at the worksite.
  4. Review the additional information as it becomes available on the OLSE website.

In addition, covered employers should be aware that California Governor Jerry Brown recently signed legislation (A.B. 908) that will increase the benefits paid under the state’s PFL program for leaves beginning on or after January 1, 2018. Assembly Bill 908 will increase the weekly benefits to eligible employees to 60 percent or in some cases 70 percent of the employee’s weekly wages.

ThinkHR will continue to monitor and report on developments in these areas.

About Rick Montgomery, JD

Rick Montgomery is ThinkHR’s Managing Legal Editor and oversees the creation and management of ThinkHR’s online resource library. He is a licensed attorney with over 15 years of experience writing HR compliance related content.