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Dec. 7, 2017

Small employers face mandated baby bonding leave

Employers need to determine if their employee count will place them within the new law's purview

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By Adriana Cara
In a move that has taken many small employers by surprise, Governor Jerry Brown has signed into law SB 63 on October 12, 2017, known as the "New Parent Leave Act" ("the Act.") The Act, which goes into effect on January 1, 2018, expands the class of employees now eligible for baby bonding leave by requiring employers with at least 20 employees to provide their workers with protected time off to bond with a new child. Although California already provides protected baby bonding leave under the California Family Rights Act ("CFRA"), that statute applies to employers with 50 or more employees. The Act, therefore, is designed to address the needs of individuals working for employers who have historically been exempt from CFRA's mandates.

Who is covered?

The Act applies to private, state and municipal employers with at least 20 employees that work within a 75-mile radius of each other. For employees to be eligible for baby bonding leave under the Act, they must have been employed for more than 12 months, and worked at least 1,250 hours during the previous 12-month period.

What Benefits Does the Act Provide to Eligible Employees?

The Act allows employees to take up to 12 weeks of unpaid leave to bond with a new child (i.e., newborn, adopted or foster child) within one year of the child's birth, adoption or placement. During the leave, the employer must maintain an employee's health care coverage in the same manner as before his or her leave began. However, employers are entitled to recover related coverage costs if the employee does not return from leave based on reasons unrelated to the continuation, recurrence or onset of a serious health condition, or "other circumstances beyond the control of the employee."

Despite the fact that baby bonding leave under the Act is unpaid, employees may use accrued vacation pay, paid sick time, or other accrued paid time off for the duration of the leave.

Because the leave is "protected," the Act makes it "an unlawful employment practice for an employer to refuse to hire, or to discharge, fine, suspend, expel, or discriminate against an individual" for exercising his or her rights under the Act.

How does the Act interface with the federal Family Medical Leave Act (FMLA) and CFRA?

Employees who are already covered by the federal Family Medical Leave Act ("the FMLA") and CFRA are not covered by the Act. That is because the FMLA and CFRA already provide for baby bonding time for employees. However, the Act provides that to the extent they are not inconsistent with its provisions, CFRA's regulations are incorporated by reference into the Act so that the Act's legal requirements mirror CFRA's. Therefore, issues related to baby bonding leave under the Act that are not expressly covered under the Act may be addressed by referring to CFRA's regulations.

How does the Act interface with California paid family leave?

Before the Act's passage, both employers and employees expressed confusion regarding California's currently existing Paid Family Leave law ("PFL"). Contrary to what its name implies, PFL does not grant employees a separate right to take maternity or paternity leave, like the Act. Rather, it is a wage replacement benefit for employees eligible to take leave under the FMLA, CFRA or an employer's policies. With the passage of the Act, employees covered thereby may now qualify for PFL, even if they are not otherwise entitled to leave under the FMLA, CFRA, or some other employer policy. Employees must apply for PFL wage replacement benefits through the state; the Act does not alter the PFL or its provisions.

Employees required to "complete mediation" before suing under the Act.

In an effort to assuage employers' concerns that the Act would encourage employees to immediately resort to litigation for perceived violations of its provisions, the Act requires employees, until December 31, 2019, to obtain a "right-to-sue" notice from the Department of Fair Employment and Housing ("DFEH") before filing a lawsuit. Within 60 days of receiving such notice, the employer may request that all parties participate in the DFEHs' mediation pilot program, which has been exclusively established for alleged violations of the Act. The Act provides that "an employee shall not pursue any civil action under this section until the mediation is complete." Although the Act prevents employees from rushing to the court house, it considers mediation to be "complete" if any party notifies the DFEH that it does not wish to participate in, or is withdrawing from the mediation. As such, employers cannot demand that employees engage in mediation in good faith before exhausting this administrative requirement under the Act. Further, as of January 1, 2020, obtaining a "right-to-sue" notice will no longer be necessary unless the Legislature amends the Act accordingly.

Employer takeaways

Employers will need to determine whether their employee count will place them within the Act's purview. If so, they should craft a written policy that complies with the Act, and train those employees who will be charged with implementing it. Employers are strongly encouraged to consult with experienced employment counsel to ensure their compliance with the Act.

Adriana Cara is a partner in the Employment, Labor and Benefits Department at Dinsmore & Shohl, a San Diego law firm.

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