San Francisco Moves Closer to Providing Paid Parental Leave

Apr 7 2016 - Paid Family Leave - Gail Cecchettini Whaley

ParentalLeaveSan Francisco is frequently ahead of the nation in employee protections, and a new proposal for paid parental leave is no exception to that trend. The San Francisco Board of Supervisors recently approved a proposal that would allow employees to receive full salary compensation when out on parental leave by supplementing state wage replacement benefits with wages from the employer. The Board will meet again to vote on final language.

The proposed ordinance would supplement state paid family leave benefits which already provide partial wage replacement. The ordinance does not require a leave of absence but merely provides wage replacement when out on an approved leave.

Current state law allows employees to seek partial wage replacement benefits for up to six weeks to bond with their new child, the child of a spouse or domestic partner or a child in connection with an adoption or foster care placement. This is called Paid Family Leave (PFL) which is not actually a leave of absence but is a state-sponsored partial wage replacement benefit.

An individual’s weekly PFL benefit amount is approximately 55 percent of their earnings up to the maximum weekly benefit amount. This wage replacement benefit is separate from the State Disability Insurance (SDI) a pregnant employee may receive for the time that she is disabled by her pregnancy.

Under the San Francisco proposal, covered businesses would pay the remaining 45 percent of salary that is not covered by state PFL. The ordinance would eventually cover San Francisco businesses employing at least 20 people.

The proposed ordinance places a maximum limit on the amount of weekly supplemental pay an employee can receive from his or her employer. An employer’s supplemental contribution obligation under the ordinance would be proportionally capped in relation to the state’s maximum weekly PFL benefit amount, according to the digest to the ordinance.

For example for 2016, the “maximum weekly benefit amount” for PFL is $1,129, which represents 55% of a person’s weekly wages based on an annual salary of approximately $106,740. Using the 2016 state rates, an employer’s maximum weekly supplemental compensation amount under the ordinance would be $924 per week. (The state’s maximum weekly PFL benefit amount ($1, 129) is 55% of $2,053; 45% of $2,053 is $924.)

At the April 5, 2016, San Francisco Board of Supervisors meeting, the Board agreed to take amendments to the draft ordinance to:

  • Phase in covered employers. The law would apply to businesses with 50 or more employees beginning January 1, 2017; 35 or more employees beginning July 2017; and 20 or more employees beginning January 1, 2018.
  • Extend the period that an employee must work before the employee is eligible for the supplemental pay from 90 days to 180 days.

Stay tuned to HRWatchdog for updates on this ordinance.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

CalChamber members can read more about Paid Family Leave in the HR Library. Not a member? See how HRCalifornia can help you.

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