San Francisco’s Paid Parental Leave Benefits

San Francisco recently became the first city in the country to require that employers provide employees with up to 6 weeks of paid time off from work for paternity leave.

Specifically, beginning January 1, 2017, businesses located in San Francisco that have 50 or more employees (regardless of location) are required to make up the difference between the 6 weeks of partial wage replacement benefits employees are entitled to under California’s Paid Family Leave (PFL) law for the birth or adoption of a child and the employees’ full wages.  It is currently anticipated that an employer’s supplemental wage replacement obligation will be capped at $924 per week for employees who make more than approximately $106,000 annually. On July 1, 2017, the ordinance will become effective for businesses with 35 or more employees, and on January 1, 2018, the ordinance will go into effect for businesses with 20 or more employees.

Employees who work 8 hours or more per week and spend at least 40 percent of their work week within San Francisco’s city boundaries will be eligible for the wage supplement.  New employees will become eligible after they have worked for the company for 180 days.  If an employee voluntarily leaves the company within 90 days after returning from paid leave, the company is entitled to reimbursement of the supplemental wage replacement from the employee.

Changes to California’s Paid Family Leave Program

Currently, employees paying into State Disability Insurance (“SDI”) are eligible to receive up to 55% of their wages for up to 6 weeks for Paid Family Leave, which includes time off for baby bonding purposes.

On April 11th, Governor Brown signed into law a measure that will raise the 55% cap to 70% for low wage earners and 60% for others who earn less than a set amount.  The increase goes into effect on January 1, 2018.  San Francisco’s paid parental leave ordinance took into account the potential that the PFL cap would be raised, and therefore simply requires employers to “supplement” the difference between PFL benefits and employee’s full wages.

What It Means for Your Business

If you operate a business in San Francisco and have at least 20 employees in any location, please note your compliance deadline for this new paid parental leave.  The silver lining for San Francisco employers is that (in addition to happier, baby-bonded employees) the January 1, 2018, increase to wage replacement benefits through PFL will help bridge the gap and lower the employers’ burden.

As always, Hoge Fenton’s employment law team is available to answer any questions you may have.

The Fine Print.

This article is provided as an educational service by Hoge Fenton for clients and friends of the firm.  This communiqué is an overview only, and should not be construed as legal advice or advice to take any specific action.  Please be sure to consult a knowledgeable professional with assistance with your particular legal issue.