New California Law Mandates Small Businesses Provide Parental Leave

On October 12, 2017, Governor Jerry Brown signed the New Parent Leave Act into law, extending unpaid leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement to employees of businesses with as few as 20 employees. Commenting on Senate bill (SB) 63, Governor Brown stated, “today’s actions will make a positive difference for women, children and families across the state.”

Until now, smaller employers have been exempt from the mandates of the California Family Rights Act, which applies to businesses with 50 or more employees, and which provides the right to take time off for parental leave, among other reasons. The new law will apply to employers with 20–49 employees in a 75-mile radius. As a result, approximately 16 percent of California’s labor force or 2.6 million workers will be eligible for unpaid parental leave.

Employees will be eligible to take the leave provided that they have worked for the employer for at least 12 months and have worked at least 1,250 hours in the past 12 months for the employer.

During the leave, the company will be required to continue to pay its regular share of healthcare premiums. Employers may recover healthcare premiums that they have paid under limited circumstances: if the employee fails to return to work after his or her leave has expired and the employee’s failure to return to work “is for a reason other than the continuation, recurrence, or onset of a serious health condition or other circumstances beyond the control of the employee.”

Where both parents work for the same company, the employer would be able to limit the amount of leave both parents can take to a combined total of 12 weeks. Employers may, however, give each parent simultaneous leave.

Governor Brown vetoed a similar bill last year on the grounds that the impact on small businesses would be too great. At the time, he also recommended that the law permit employers and employees to mediate their disputes on relevant leave issues.

As a result, the author of the legislation, Senator Hannah-Beth Jackson (D-Santa Barbara), amended the bill to create a parental leave mediation pilot program under California’s Department of Fair Employment and Housing (DFEH). The program allows employers, within 60 days of receiving a right-to-sue notice, to request that parties to a dispute participate in the DFEH’s Mediation Division Program. If an employer requests mediation within that timeframe, the employee would not be able to sue until the mediation is complete.

The new law goes into effect in January of 2018.