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.