Paid Family Leave: Is Your Company Aware of the Latest Ordinances?

Family values and putting Americans back to work were common refrains during the last political cycle. President Trump spoke about child care and family leave in his January joint address to Congress and Ivanka Trump has met with lawmakers to advance her ideas on the subject. However, given  today’s political climate federal legislation would be difficult.

As we have previously explored, given the political obstacles to federal action, a number of employment law initiatives have “gone local.” Paid Family Leave is one significant area in which many local and state governments are moving full steam  ahead, without waiting for federal direction.  Given that paid leave could have a significant impact on your business operations, your bottom line, and your workforce morale, it is critical to pay attention and make sure that your  company is up-to-date on the latest local and state Paid Family Leave laws.

On January 1, 2017, one particularly comprehensive local leave ordinance, San Francisco’s Paid Parental Leave for Bonding with New Child Ordinance, went into effect. The ordinance mandates that employers provide six weeks of fully paid parental leave for the purpose of bonding with a new child. In San Francisco, employers with 50 or more employees must provide supplemental compensation so that employees receive 100 percent of their salary during their leave. Starting July 1, 2017 companies with 35 to 49 employees must comply and on January 1, 2018, the protections will extend to employers with 20 to 34 employees. Those companies that do not comply will be subject to penalties, including reinstatement (if the employee was let go), back-pay, injunctive relief, attorneys’ fees, and $50 for each employee each day of a violation.

Compliance means more than just offering Paid Family Leave benefits. The San Francisco ordinance also prohibits employers from interfering with an employee’s rights under the ordinance. These rights include requesting or applying for Paid Family Leave, informing any person of an employer’s alleged violation, and informing others of their rights under the ordinance. Additionally, employers cannot threaten discharge, demote, discriminate or discharge employees who take the leave. As the ordinance rolls into effect throughout the year, make sure your San Francisco operations are in compliance.

While San Francisco has adopted the most comprehensive Paid Family Leave ordinance in California, there are also changes to statewide leave benefits coming down the road. On January 1, 2018, the wage replacement rate under the state’s Paid Family Leave program will increase from 55 percent to 70 percent for those earners below one-third of California’s average weekly wage and to 60 percent for those who earn more than one-third of the weekly wage.

California is not the only place addressing paid family leave benefits. New York is the fourth state, after California (2004), New Jersey (2008), and Rhode Island (2013), to pass Paid Family Leave legislation, which goes into effect in 2018. New York’s law will be the strongest state family leave law in the nation.  Once in full effect, it will provide up to 12 weeks of paid job secured leave. Further, Washington D.C. is considering a plan similar to San Francisco’s and a Wisconsin State Senator recently proposed legislation to create state leave insurance which would allow employees to take paid family leave for up to 12 weeks when welcoming a new child.  A number of smaller localities have also enacted or are considering similar initiatives.

While some state and local governments are instituting Paid Family Leave, many companies are not waiting for government action, but are proactively changing their policies and expanding leave programs in order to attract and keep employees. In 2016 alone, there were a number of large companies that started Paid Family Leave programs. Many of the companies increasing benefits have done so for salaried employees, but hourly employees have also benefited at some companies.

Regardless of whether the federal government acts, it is important for companies to be aware of state and city level ordinances when reviewing their family leave policies. Any employer who is addressing a family leave request should carefully review whether their state or locality has jumped on the Paid Leave bandwagon.