Posts

Explaining California Paid Family Leave and the new California Family Rights Act

California has 2 plans to help employees when they have a family emergency, or the birth of a new baby.  For years, California has had the Paid Family Leave (PFL) Act which applies to all employees and employers in California.  It is paid out of a fund that is deducted from employee paychecks along with unemployment and State Disability.  In fact, the employee goes to the EDD to file for PFL.  It provides about 60% of normal wages for the employee for up to 6 weeks away from work while they bond with a new baby or care for a family member.

California also has the CPFL which mirrors the Federal FMLA that you may have heard about.  This applies to businesses with 50 + employees.  Employers were having a problem following California law at the same time as meeting Federal FMLA standards.  So, we now have an updated California Family Rights Act which helps bridge the gap for employers and employees in this program.

ONE VERY IMPORTANT THING TO KNOW……

If you provide health care for your employees, you must continue the coverage for the length of the leave up to 12 weeks.  So, if you have a stated policy that says any leave longer than 2 months will be turned over to COBRA benefits….that will not apply in this case.

Below is the CFLA from the Cal.gov website:

 

California Family Rights Act (CFRA)

 

The California Family Rights Act (CFRA) (Gov. Code, § 12945.2) was established to ensure secure leave rights for the following:

Birth of a child for purposes of bonding

Placement of a child in the employee’s family for adoption or foster care

For the serious health condition of the employee’s child, parent or spouse

For the employee’s own serious health condition

Benefits

An employer is not required to pay an employee during a CFRA leave, except when an eligible employee elects, or the employer requires, the employee to use any accrued vacation time or other accumulated paid leave other than accrued sick leave.

However, if CFRA leave is for the employee’s own serious health condition, the employee may elect or the employer may require the employee to use any accrued vacation time or other accumulated paid leave, including any accrued sick leave. Additionally, the employee may elect to use accrued sick leave for any other reason mutually agreed to by the employer.

An employer must continue health care coverage for employees during their CFRA leave

If the employer provides health benefits under any group health plan, the employer has an obligation to continue providing such benefits during an employee’s CFRA leave. This obligation commences on the date leave first begins. The obligation continues for the duration of the leave(s), up to a maximum of 12 work weeks in a 12-month period.

An employer must continue other benefits during an employee’s CFRA leave

During the period of CFRA leave, the employee is entitled to accrual of seniority and to participate in employee benefit plans, including life, short-term or long-term disability or accident insurance, pension and retirement plans, and supplemental unemployment benefit plans to the same extent and under the same conditions as would apply to any other leave granted by the employer for any reason other than CFRA leave.

Eligibility Requirements

CFRA leave

An employee may take an unpaid leave for the birth of a child for purposes of bonding, for placement of a child in the employee’s family for adoption or foster care, for the serious health condition of the employee’s child, parent, or spouse, and for the employee’s own serious health condition.

Health condition

Serious health condition means illness, injury (including on-the-job injuries), impairment, or physical or mental condition of the employee or a child, parent or spouse of the employee that involves either:

In-patient care (i.e., an overnight stay) in a hospital, hospice, or residential health care facility

Continuing treatment or supervision by a health care provider

Employers covered under CFRA

Employers subject to CFRA are those who do business in California and employ 50 or more part-time or full-time employees, including non-profit religious organizations. Covered employers also include the State of California and any of its political and civil subdivisions, and cities and counties, regardless of the number of employees.

Requirements employee must satisfy to be eligible to take a CFRA leave

To be eligible for CFRA leave, an employee must be either a full-time or part-time employee working in California, have more than 12 months (52 weeks) of service with the employer, have worked at least 1,250 hours in the 12-month period before the date the leave begins, and work at a location in which the employer has at least 50 employees within 75 miles radius of the employee’s work site.

Leave Requirements

The maximum CFRA leave entitlement

Leave under the California Family Rights Act (CFRA) may total up to 12 workweeks in a 12-month period. It does not need to be taken in one continuous period of time.

How the 12-month period is calculated

An employer may choose how to compute the 12-month period in which the 12 workweeks of leave entitlement occurs, using any of the four calculation methods listed below. An employer must apply the chosen method consistently and uniformly to all employees.

The calendar year

Any fixed “leave year” of 12 months, such as a fiscal year, a year required by State law, or a year starting on an employee’s anniversary date

The 12-month period measured from the date an employee’s first CFRA leave begins

A rolling 12-month period measured backward from the date an employee uses any leave

The CFRA leave may be added onto pregnancy disability leave

At the end of an employee’s period(s) of pregnancy disability leave, a CFRA-eligible employee may request a CFRA leave of up to 12 workweeks for reason of birth of her child if the child has been born by this date. There is no requirement that either the employee or child have a serious health condition nor is there a requirement that the employee no longer be disabled by her pregnancy, childbirth, or related medical condition before taking CFRA leave for reason of birth of her child.

The minimum duration for a CFRA leave taken for the birth, adoption, or fostercare placement of a child

Basic minimum duration of a CFRA leave is two weeks when the leave is taken for the birth, adoption, or fostercare placement of a child. However, an employer shall grant a request for a CFRA leave of less than two weeks duration on any two occasions. In addition, leave taken for the birth, adoption, or fostercare placement of a child must be completed within one year of the qualifying event. Where CFRA leave is taken for the serious health condition of a parent, child, or spouse or for the serious health condition of the employee, leave may be taken intermittently or on a reduced-work schedule when medically necessary, as determined by the health care provider of the person with the serious health condition. However, an employer may limit leave increments to the shortest period of time the employer’s payroll system uses to account for absences.

There are limitations to the CFRA leave entitlement

If both parents are eligible for CFRA leave but are employed by the same employer, that employer may limit leave for the birth, adoption, or foster-care placement of their child to 12 workweeks in a 12-month period between the two parents. No other limitations restrict these parents from taking a CFRA leave for other qualifying reasons.

Notification

An employee must give advance notice if he/she wants to take a CFRA leave

An employee shall provide at least verbal notice sufficient to make the employer aware the employee needs CFRA qualifying leave. The notice shall state the reason for the leave and its anticipated timing and duration. An employer may require 30 days advance notice before CFRA leave is to begin if the need for the leave is foreseeable. If 30 days is not feasible (e.g., not knowing when leave will be required to begin, a change in circumstances, or a medical emergency), notice must be give as soon as feasible. Under all circumstances, it is the employer’s responsibility to designate leave, paid or unpaid, as CFRA leave. In addition, the employer shall respond to a leave request as soon as possible but no later than ten calendar days after receiving the request.

An employer must inform employees of notice requirements

An employer shall provide notice to his/her employees of the right to request a CFRA leave and shall post the notice in a conspicuous place or places where employees tend to congregate. If the employer publishes a handbook describing other kinds of personal or disability leaves available to its employees, the employer shall include a description of CFRA leave in its next edition. The employer may include both pregnancy disability leave and CFRA leave requirements in a single notice.

Reinstatement

An employer must reinstate the employee at the end of his/her CFRA leave

Upon granting an employee a CFRA leave, the employer must guarantee reinstatement to the same or comparable position and provide the guarantee in writing upon the request of the employee. Employment in a comparable position means employment in a position that is virtually identical to the employee’s original position in terms of pay, benefits, and working conditions, including privileges, perquisites, and status. It must involve the same or substantially similar duties and responsibilities, skill, effort, and authority, must be performed at the same or geographically proximate work site, and ordinarily means the same shift or same or equivalent work schedule.

Reasons why an employer could deny reinstatement to an employee on CFRA leave

An employer may deny reinstatement to an employee if his/her position ceased to exist, such as in a lay-off. An employer may also deny reinstatement if the employee taking the leave is a key employee (salaried and among the highest paid 10 percent) and the denial of reinstatement is necessary to prevent substantial and grievous economic injury to the operations of the employer. However, the employer must notify the employee of the intent to refuse reinstatement at the time the employer determines the refusal is necessary as well as give the employee a reasonable opportunity to return to work.

 

This is from the Ca.gov site for fair employment and housing regarding CFRA

UPDATE TO SICK PAY LAW: DO YOU KNOW HOW YOU ARE GOING TO ACCRUE HOURS?

Since we first heard of the new “Healthy Families” law in the State of California, there has been some clarification of responsibilities.  If you click here: https://s3-us-west-2.amazonaws.com/lockton-corporate-website/Compliance-Alerts/14_12_24_CA_Sick_Leave_Final.pdf  you will see an article that explains the process is clear detail.  It is not a long article, but I highly recommend you read it and make sure your bookkeeper reads it as well.

One of the key features of the act is that we must inform your employees how you plan to accrue the sick pay hours.  There are 4 choices, but really most of you only have 2 choices.  You can make sure your existing sick pay policy is as good or better than the state plan and that means the employees can still earn at least 24 hours within the first 720 hours of work (one hour accrued for every 30 hours worked).

The second is if you have a collective bargaining agreement already in place (usually if you are a union shop).

Third, you can accrue each payday based on the hours worked.  The formula is 1 hour of sick pay accrued for every 30 hours worked until you reach 24 hours.  This method requires a lot of time calculating every employee separately.  Overtime hours are included in the calculation as worked hours.  Your paycheck stub must have a line on it showing Sick Pay with the hours earned for that pay period and a total showing the total accrued sick pay hours.  Once the 24 hours is reached, you do not have to accrue any more for the rest of the 12 month period.  On the beginning of the next 12 months, you start accruing again.  In between those times, if an employee uses any sick pay hours, you would show a minus amount in the pay period column and subtract that amount from the total year to date number.

The Final and OUR RECOMMENDED BEST WAY  to handle the sick pay hours is to “grant” the hours up front.  In other words, start the employee with 24 hours in the year to date total.  They cannot access it until they have worked 90 days for your company so there is very little risk that you are paying ahead.  Also, at termination, you are not required to pay out any unused sick pay, so the risk of loss is very low and the savings in time is very high.  You also stay in compliance and out of trouble. 

As your HR company, we need to know which method you are going to use so we can provide the correct information in your employee packets as required by the law.

If you have any other questions regarding this law, please give Jeff at call at our office: (559) 625-2322.  We will continue to update material as it becomes available.

What Does the New California Sick Pay Rule Mean to Me?

Yet another reason to make sure you drop the “salary” rate for hourly workers and ensure a time clock or written time card is used by every employee including your supervisors and managers.  Please read below and understand just how important tracking hours will be.  We also do not have final rulings on this legislation, so interpretations will be clarified over the next few months regarding questions.  One question, in Agriculture we have a 10 hour day, does that mean the employee earns up to 10 hours for a sick day or only 8?  If I have Paid Time Off (PTO) instead of vacation or sick pay, is that ok?  Our take is that you should designate vacation days separate from sick days because they may accrue at different rates and if you now give a person 5 PTOs a year, that would be 3 sick days and only 2 days of vacation.  Please read the article below originally posted by CalSHRM:

California Enacts Bill Requiring Employers Provide Paid Sick Leave

By Michael S. Kalt1

1 Michael S. Kalt is a partner in the Labor and Employment practice group at Wilson Turner Kosmo LLP in San Diego, California and is also the Government Affairs Director for CalSHRM.  Wilson Turner Kosmo LLP San Diego, CA 92101 mkalt@wilsonturnerkosmo.com

On September 10, 2014, Governor Jerry Brown signed the “Healthy Workplaces, Healthy Families Act of 2014” (AB 1522) making California the second state (Connecticut is the other) to implement paid sick leave state-wide. This law takes effect July 1, 2015, and implements a number of new Labor Code provisions (sections 245 et seq.)

California employers should begin learning about its very detailed requirements and compare it against similar but different ordinances already enacted in San Francisco and being considered in San Diego. Accordingly, this article will provide an initial review of this bill’s numerous detailed requirements.

Employers Covered by and Exempted from this New Law

Likely one of the more controversial aspects of this new law is its scope. For instance, unlike Connecticut’s Paid Sick Leave law which applies only to employers with more than 50 employees and San Francisco’s Paid Sick Leave Ordinance which exempts smaller employers from certain obligations, this new law applies to almost all employers regardless of size, many public employers, the state, and municipalities.

Notably, however, like many other recent Labor Code amendments, this bill also contains carve-outs for employees covered by collective bargaining agreements (CBAs) with certain provisions. Specifically, this bill does not apply to employees covered by CBAs that expressly provide for the wages, hours of work, and working conditions of employees, as well as for paid sick days (with final and binding arbitration for any disputes regarding paid sick days), premium wage rates for all overtime, and a regular hourly rate of not less than 30 percent more than the state minimum wage.

Similarly, construction industry employees covered by a CBA with these provisions are not covered by this bill if the CBA was entered into before January 1, 2015, or if the CBA expressly waives the requirements of this new law in clear and unambiguous terms.

Responding to the State of California’s concern about costs, an amendment inserted at the eleventh-hour also exempts a provider of in-home supportive services under specified sections of the Welfare and Institutions Code.

Finally, certain individuals employed in the airline industry and covered by the federal Railway Labor Act are exempted provided they receive compensated time-off at least equal to this new law.

Accrual and Usage Rules

After July 1, 2015, employees who work in California for thirty or more days within a year from the commencement of employment will accrue paid sick leave at a rate of no less than one hour for every 30 hours worked. Exempt employees will be deemed to work 40 hours per week for accrual purposes, unless their normal workweek schedule is less than 40 hours, in which case they will accrue paid sick leave based upon that normal workweek.

Employees will be entitled to use accrued paid sick days beginning on the 90th day of employment, after which they may use paid sick days as they are accrued. Employers will also have the discretion to lend paid sick days to an employee in advance of accrual, and employers cannot require employees to locate a replacement worker to cover days on which an employee uses paid sick days.

While accrued paid sick days shall carry over to the following year of employment, employers may limit an employee’s use of paid sick leave to 24 hours, or three days, in each year of employment. However, no accrual or carry-over is required if the full amount of sick leave is received at the beginning of each year. An employer also has no obligation to allow an employee’s total accrual of paid sick leave to exceed 48 hours or six days, provided that an employee’s rights to accrue and use paid sick leave under this section are not otherwise limited. This six-day accrual limit appears intended to ensure the employee has their full sick leave rights both for the instant year and the beginning of the next year.

One of the bigger concerns about this proposed law was its potential impact on employers who already provide an equal amount of sick time or paid time off. New Labor Code section 246(e) addresses this concern by stating that an employer does not need to provide “additional” paid sick days if it meets certain requirements. Specifically, the employer is exempted from providing additional paid sick days if (a) it has a paid leave policy or paid time off policy, (b) the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as specified in this new law, and (c) the employer’s policy does either of the following: (1) it satisfies the accrual, carry over and use requirements of this new law; or (b) it provides no less than 24 hours or three days of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year or 12-month basis. Notably, unlike the exemptions provided to this entire new law for certain groups (discussed above), this particular exemption seems to apply only to the provision of “additional” time off, but does not exempt employers from other aspects of this new law (i.e., notices, posters, record-keeping, etc.).

Employers will not be required to compensate employees for unused sick days upon employment ending, but they must reinstate the previously unused balance if they rehire the employee within one year. In that instance, the rehired employee shall be entitled to use those previously accrued and unused paid sick days and to accrue additional paid sick days upon rehiring.

Employees will be entitled to use paid sick time for preventive care for themselves or a family member, as well as for the diagnosis, care, or treatment of their or their family member’s existing health condition. For purposes of this bill, “family member” means a (1) child (as defined), (2) parent (as defined), (3) spouse, (4) registered domestic partner, (5) grandparent, (6) grandchild, or (7) sibling. The employer shall also provide paid sick days for an employee who is a victim of domestic violence, sexual assault, or stalking, as discussed in Labor Code sections 230 and 230.1.

An employee may determine how much paid sick leave they need to use, but an employer may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave. In response to employer concerns sick leave is more unpredictable than many other leaves (e.g., FMLA, etc.), this bill requires employees to provide “reasonable” advance notification if the need for paid sick leave is foreseeable. Where the need for paid sick leave is unforeseeable, the employee shall provide notice of the need for leave as soon as practicable.

Employees using paid sick leave shall be compensated at the employee’s normal rate during regular hours of work. If the employee in the 90 days of employment before taking accrued sick leave had different hourly pay rates, was paid by commission or piece rate, or was a nonexempt salaried employee, then the rate of pay shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

Notice, Posting and Record-Retention Rules

This new law also furthers a recent trend of new California laws that enact substantive rights and impose administrative responsibilities, although arguably in less expansive form due to last-minute amendments proposed by human resources organizations.

For instance, this law amends Labor Code section 2810.5 to require employers to provide at the time of hiring written information about this new paid sick leave entitlement. Specifically, this law requires that the notice employers have been required to provide since 2012 concerning pay-related information now also include language advising employees of their right to accrue and use paid sick leave, their right to be free from retaliation, and their right to file a complaint. Fortunately, this particular Labor Code section generally requires the Labor Commissioner to develop a template employers may use, so presumably the Labor Commissioner will develop an updated form. An earlier but-since deleted provision of this law would have required employers to essentially develop and distribute written notice in at least five languages but was silent as to what the notice would have been required to say or when it needed to be distributed.

An employer will also be required to display in a conspicuous place in each workplace of the employer a poster notifying employees of these paid sick leave rights. The Labor Commissioner will be responsible for preparing this poster. Employers who willfully violate the posting requirements will be subject to a civil penalty of not more than $100 per offense.

Employers will also be required to provide employees with written notice identifying the amount of paid sick leave available, or paid time off an employee provides in lieu of sick leave, for use on either the employee’s itemized wage statement required under Labor Code section 226 or in a separate writing provided on the designated pay date with the employee’s payment of wages. An employee alleging failure to provide such notice shall be entitled to the penalties specifically enumerated under this law (discussed below) rather than under Labor Code section 226.

New Labor Code section 247.5 also requires employers to retain, for at least three years (rather than the five years originally proposed), records documenting the hours worked, paid sick days accrued, and paid sick days used by each employee. These records may be inspected by the Labor Commissioner under Labor Code section 1174, or by an employee under Labor Code section 226. Troublingly, and in another example of a recent trend in California, this section provides that if an employer fails to maintain adequate records, it shall be presumed that the employee is entitled to the maximum number of hours accruable under this new article, unless the employer proves otherwise by clear and convincing evidence. In other words, an employer cannot simply prevail by satisfying the preponderance of the evidence standard traditionally used, but must satisfy the much more rigorous “clear and convincing” standard traditionally reserved for punitive damages purposes.

Retaliation Protections and Enforcement

This bill also prohibits discrimination or retaliation against employees for using accrued sick days, or for filing a complaint regarding any sick day policy violation. However, similar to last year’s protections against “immigration-related practices” (AB 263), this bill creates a rebuttable presumption of unlawful retaliation if an employer takes an adverse employment action (including denying the right to use sick days) within 30 days of an employee (1) filing a complaint with the Labor Commissioner or in court alleging violations of this article; (2) cooperating with an investigation or prosecution of an alleged violation of this article; or (3) opposing a policy, practice or act that is prohibited by this article.

Under Labor Code section 248.5, the Labor Commissioner may enforce this new law by awarding reinstatement, back pay, and payment of sick days unlawfully withheld, plus the payment of an additional sum in the form of an administrative penalty to an employee whose rights were violated. Where paid sick leave is unlawfully withheld, the employee shall recover the dollar value of the paid sick days withheld, or $250 multiplied by three, whichever is greater, but not to exceed an aggregate penalty of $4,000. If a paid sick leave-related violation results in “other” harm to the employee or person, the administrative penalty shall include a sum of $50 for each day that the violation occurred or continued, not to exceed $4,000.

If the employer fails to promptly comply, the Labor Commissioner may take “appropriate” enforcement action to ensure compliance, including filing a civil action. In such instances, the violating employer may be ordered to pay up to the state of California $50 for each day a violation occurs of continues.

Employees or other persons may report suspected violations to the Labor Commissioner, and to encourage such reporting, the Labor Commissioner may keep the reporting employee’s identifying information confidential.

The Labor Commissioner or the Attorney General may also file a civil action in court against the employer or any person violating this article. The Labor Commissioner or Attorney General may recover appropriate legal and equitable relief, including reinstatement, back pay, the payment of sick days improperly withheld, and liquidated damages of $50 to each employee for each violation each day, plus reasonable attorneys’ fees and costs. (A provision authorizing employees to file civil actions was deleted by recent amendment while another amendment clarifies that these administrative actions would be maintained on “behalf of the aggrieved,” suggesting any penalties would ultimately be awarded to the employee.) Subdivision (b) to Labor Code section 245 clarifies that the provisions of this new article “are in addition to and independent of any other rights, remedies or procedures under any other law.

Lastly, proposed section 249, subdivision (d), specifies this bill establishes “minimum” requirements for paid sick days and does not preempt, limit or otherwise affect the applicability of any other law or ordinance that provides greater accrual of use of paid sick days. California employers already must consider slightly different variations in San Francisco and, unless stayed by referendum, San Diego shortly, and this legislative invitation for municipalities to enact still-broader versions suggests employers may soon need to have multiple versions of their paid sick leave policies.