California Employment Law Update

San Francisco Issues Guidance for the Application of the City’s Paid Parental Leave Ordinance

The City of San Francisco recently published new FAQs addressing provisions of its Paid Parental Leave Ordinance (the “Ordinance”).  The Ordinance, which went into effect on January 1, 2017 for employers with 50 or more employees, will begin to apply to employers with 35 or more and 20 or more employees on July 1, 2017 and January 1, 2018, respectively.  It provides supplemental compensation to employees receiving California Paid Family Leave (“PFL”) benefits to bond with a new child.  Specifically, under the Ordinance, employers are required to provide employees receiving state PFL benefits with supplemental compensation equal to the difference between the employee’s PFL benefit amount and the employee’s normal gross weekly wages such that the employee receives up to 100% of his or her weekly wages, subject to a weekly maximum benefit amount, for up to 6 weeks.

Among other things, the new FAQs clarify that:

  • To receive the benefits prescribed by Ordinance, employees must apply for both California PFL and San Francisco Ordinance benefits.
  • In addition, employees must have: commenced work for a covered employer at least 180 days before the start of the PFL payment period; worked at least 8 hours per week for the covered employer; and worked in San Francisco at least 40% of his or her weekly hours for the covered employer.
  • The threshold number of employees that triggers the requirements of the Ordinance for employers includes employees working or located outside of San Francisco. Seasonal, temporary, part-time and contracted employees are also counted toward the threshold number.  For employers whose workforces fluctuate from week to week, the Ordinance provides a look-back formula for calculating their workforces.
  • An employer is not required to pay supplemental compensation while the employee is serving his or her waiting period for California PFL, but only for the 6 weeks that the employee receives the PFL benefits.
  • An employer may, if it wishes, apply up to two weeks of an employee’s accrued and unused PTO or vacation time to cover the cost of the required supplemental compensation, but it may not apply the employee’s accrued and unused sick time for this purpose. With respect to the former scenario, employee agreement is required; however, an employee working for an employer with 10 or more employees must allow the employer to apply accrued PTO or vacation in excess of 72 hours.

California Labor Commissioner Issues New Guidance on Paid Sick Leave

The California Labor Commissioner’s Office recently issued new guidance regarding the application and administration of the state’s paid sick leave law.  The new guidance addresses the interplay between the law and grandfathered employer part time off (“PTO”) plans, as well as the interaction between employers’ disciplinary policies on employees’ use of paid sick leave.

Grandfathered PTO Plans

As for PTO plans that employers had in place at the time the law went into effect on January 1, 2015, the Labor Commissioner reinforced the statutory language (found at Cal. Lab. Code § 246(f)).  Specifically, the Commissioner confirmed that if, at the time the law became effective, an employer already had an existing PTO plan that made an amount of paid leave available that could be used for as many or more days and under the same or more favorable conditions than those specified in the law, that employer may continue to use the PTO plan and does not have to provide additional paid sick days in order to satisfy the law’s requirements.

As for grandfathered PTO plans, the Commissioner also explained that the paid sick leave law addresses only the rate of pay that must be paid for time taken off as paid sick leave (Cal. Lab. Code § 246(l)).  Therefore, if an employer is providing paid sick days through a grandfathered PTO plan, the paid sick leave law has no impact on the rate of pay the employer must pay for days that an employee takes off under the plan for purposes other than paid sick days, such as vacations or personal holidays.

Discipline for Unscheduled Absences

Finally, the Commissioner addressed the issue of discipline for an employee’s unscheduled absence from work as it relates to the paid sick leave law.  Specifically, the Commissioner clarified that the law does not protect all time off taken by an employee for illness or related purposes.  Rather, it prohibits disciplinary action only with respect to an employee’s use of accrued and available paid sick leave under the statute.  Therefore, an employer may not impose discipline for an unscheduled absence that occurs for purposes specified under the paid sick leave law (see Cal. Lab. Code § 246(l)) and for which the employee has available and uses accrued paid sick leave time.  The employer, may, however, impose discipline for unscheduled absences that occur for reasons other than those enumerated in the law, or for which the employee does not have or does not use accrued and available paid sick leave time.

Employers should note that local ordinances and state and federal disability and leave laws may further impact the employer’s obligations regarding the above items.

May 2017 California Employment Law Notes

We invite you to review our newly-posted May 2017 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

A handy guide for choosing and using employment practices liability insurance coverage

Thompson Reuters has just published our “handy guide” for choosing and using employment practices liability insurance (“EPLI”).  The article is attached.  There are a number of important things to keep in mind when considering your options and using these insurance policies if and when an employment claim is made or threatened.  Please let one of our employment or insurance lawyers know if we can be of assistance.

Employment Insurance article

“100% Healed From Injury” Policies May Violate the CA Fair Employment and Housing Act

The California Department of Fair Employment and Housing (“DFEH”) recently obtained a settlement on behalf of a custodian for a school district who was fired after an on-the-job injury.  As part of the settlement, the employer agreed to pay $290,000 and offer reinstatement with reasonable accommodations.

During an investigation by the DFEH, the district told the DFEH that it relies on a test of physical capabilities to determine if a person is able to perform custodial duties.  Anyone taking the test must be able to exert “maximal force.”  Because the custodian had a lifting restriction that prevented him from being able to exert “maximal force,” he was not considered eligible to take the test.

DFEH Director Kevin Kish stated: “The testing requirements in this case meant, in practical terms, that the employee had to be 100% healed from an injury before he would be permitted to take a test for a job he was already successfully performing.  That doesn’t make sense.  Policies requiring employees to be ‘100% healed from injury’ in order to work deny employees their right to an individual assessment and violate the FEHA.”

This settlement is a reminder to employers that when an employee seeks an accommodation for his or her disability, the employer must determine whether that employee can perform the duties of the job, with or without an accommodation.  Employers should review their accommodation policies to ensure that such policies do not have the unintended consequence of requiring employees to be fully healed in order to work.

March 2017 California Employment Law Notes

We invite you to review our newly-posted March 2017 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

California Further Limits Use of Criminal Background Information

California’s Fair Employment and Housing Council (“FEHC”) has finalized new regulations further limiting employers’ ability to consider criminal history when making employment decisions. The new FEHC regulations, which are scheduled to take effect on July 1, 2017, largely follow the EEOC’s 2012 Enforcement Guidance.

In addition to the new FEHC regulations and existing California law, which already limits employers’ use of criminal records when making employment decisions, municipal “Ban the Box” ordinances further restrict employers’ use of such information. For example, we previously described Los Angeles’ new Ban the Box Ordinance in our February 8, 2017 post.  Additionally, employers must be mindful of their obligations under the Fair Credit Reporting Act (“FCRA”) when using criminal background reports provided by third party consumer reporting agencies.

Employers should note the following highlights from the FEHC regulations:

First, the regulations expand the list of types of criminal history employers are prohibited from considering to include any non-felony conviction for possession of marijuana if the conviction is more than two years in the past.

Second, before an employer may take adverse action against an applicant based on conviction history, an employer must give the applicant notice of the disqualifying conviction and provide a reasonable opportunity to present evidence that the conviction information is factually inaccurate. This notice is only required when the criminal information is obtained by a source other than the applicant or employee (e.g. through a credit report or internally generated search).  Thus, this notice is different from that required under the FCRA, which requires certain notices only if the employer takes adverse action against an applicant based on information contained in a third-party background check report.

Third, the FEHC regulations prohibit an employer from considering criminal history in employment decisions if doing so will result in an adverse impact on individuals within a protected class (based upon race, national origin, religion, etc.).  The applicant bears the initial burden of proving that an employer’s criminal background screening policy has an adverse impact on a protected class.

Employers should review their employment applications and relevant policies to ensure compliance with not only the new FEHC regulations, but also the FCRA and applicable municipal “Ban the Box” ordinances.