Parental Leave Mandate for Small Business Passes

A job killer bill mandating a new protected leave of absence for small businesses passed the Legislature this week and is on its way to the Governor.

SB 63 (Jackson; D-Santa Barbara) passed the Assembly on September 12 by a vote of 51-15. A day later, the Senate voted 25-13 to concur in Assembly amendments to the bill, sending the bill along to the Governor.

The recent amendments do not limit the bill’s cost or employers’ exposure to litigation.
The recent amendments do not limit the bill’s cost or employers’ exposure to litigation.

The California Chamber of Commerce and a coalition of business groups and local chambers of commerce have been opposing SB 63 because it unduly burdens and increases costs of small employers with as few as 20 employees by requiring 12 weeks of protected employee leave for child bonding. It also exposes employers to the threat of costly litigation.

The recent amendments do not limit the bill’s cost or employers’ exposure to litigation.

Governor Edmund G. Brown Jr. vetoed a similar, but narrower, proposal just last year.

Coalition Opposition

In opposing SB 63, the CalChamber and coalition have been pointing out that the bill will overwhelm small employers. The bill targets small employers with as few as 20 employees within a 75-mile radius and requires those employers to provide 12 weeks of leave in addition to the other leaves of absence California already imposes.

The mandate will overwhelm small employers as follows:

  • Creates a combined seven-month protected leave of absence on small employers. California employers with five or more employees already are required to provide up to four months of protected leave for an employee who suffers a medical disability due to pregnancy. SB 63 will add another 12 weeks of leave for the same employee, totaling seven months of potential protected leave.
  • Could affect worksites that have substantially fewer than 20 employees. SB 63 is applicable to any employer that has 20 or more employees within a 75-mile radius. Employees at multiple worksites are aggregated together to reach the employee threshold. Accordingly, a worksite that has only five employees will be required to accommodate this mandatory leave if there are other worksites in a 75-mile radius that have enough employees to reach the 20-employee threshold.
  • Imposes a mandatory leave with no discretion to the employer. The leave under SB 63 must be given at the employee’s request, regardless of whether the employer has other employees out on other California-required leaves.
  • Imposes additional costs on small employers that are struggling with the increased minimum wage. Although the SB 63 leave is not “paid” by the employer, while the employee is on leave, the employer will have to maintain medical benefits, pay for a temporary employee to cover for the employee on leave (usually at a higher premium) or pay overtime to other employees to cover the work of the employee on leave.
  • Exposes small employers to costly litigation. Labeling an employer’s failure to provide the SB 63 leave as an “unlawful employment practice” exposes an employer to costly litigation under the Fair Employment and Housing Act (FEHA).

The CalChamber is encouraging members to contact the Governor and urge him to veto SB 63.

For more information, read CalChamber’s Top Story.

Staff Contact: Jennifer Barrera

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