New CA Law Update – CFRA Law for Employers of 5 or More Employees & COVID-19 for Large Employers

Governor Gavin Newsom recently signed a number of bills that will affect California employers in 2021.  This new legislation greatly expands family and medical leave of absence requirements for all employers with at least 5 employees in California. This new legislation, SB1383, expands the California Family Rights Act (“CFRA”) and requires employers with 5 or more employees to provide certain unpaid, protected family/medical/military leave to eligible employees. The new law goes into effect on January 1, 2021, thus employers must take steps to comply immediately.

Will my company now be subject to the CFRA?

The biggest change is the expansion of the CFRA’s coverage to a new class of employers. Before, the CFRA applied only to companies with 50 or more employees (20 for bonding leave only) within 75 miles of a California worksite. Now, as of 2021, the mileage threshold is gone, and any company with five employees anywhere in the U.S. (even if just one person in California) must provide 12 weeks of family leave to California employees.

When do I need to provide CFRA leave?

First, for those of you who may be new to the CFRA family—or may just need a reminder—the CFRA requires covered employers to provide 12 weeks of unpaid protected leave to employees who have at least 1250 hours of service in the 12 months prior to the leave.

This eligibility requirement didn’t change for 2021, but the qualifying reasons that open the door to CFRA leave have expanded. Employees now will be eligible to take a leave of absence to care for grandparents, grandchildren, siblings, and domestic partners with a serious health condition (in addition to existing leave to care for a parent or spouse). And while employees once could take leave to care for children only if they were disabled and/or under age 18, there is no longer an age limit or a disability requirement.

And the expansion does not stop there.  Significantly, starting January 1, 2021, it appears that an employee may be able to take 24 weeks of leave under the CFRA and FMLA in certain situations due to the differing definitions of “family member.” For example, an employee may take 12 weeks under the CFRA to care for a grandparent with a serious health condition. Then, that employee may also be eligible under the FMLA to take another 12 weeks of leave to care for a spouse with a serious health condition, for a combined total of 24 weeks. Also, if the employee also needs leave due to pregnancy, she could also be entitled to up to an additional 4 months of leave under California Pregnancy Disability Leave.

What about those exceptions to CFRA coverage?

As of January 1st, two exceptions to CFRA leave have been eliminated. First, where both parents of a new child work for the same company, employers can no longer limit the amount of leave taken by both parents to a combined total of 12 weeks—employers now must separately provide 12 weeks to each employee.

Second, employers no longer can refuse to grant CFRA leave under the “key employee” exception, which allowed employers to opt out of providing the leave to salaried employees who are among the highest paid 10 percent of the company’s employees.

New COVID-19 Supplemental Paid Sick Leave

In addition to the small employer mediation program for family leave claims, AB 1867 also immediately established supplemental COVID-19 paid sick leave for private employers with 500 or more employees anywhere in the nation, as well as public and private employers of first responders and health care employees who opted out of the leave under the federal law. This portion of AB 1867 was intended to fill a void not addressed by the federal Families First Coronavirus Response Act (“FFCRA”) and Governor Newsom’s prior Executive Order that provided paid sick leave to food sector employees affected by COVID-19. The new supplemental paid sick leave is similar to the FFCRA and the prior Executive Order. For example, a full-time worker of a company with over 500 employees now is entitled to up to 80 hours of paid sick leave for a COVID-19-related absence. Part-time employees and/or employees who work a varied number of hours are also included in the new law. Notably, if the employer already has provided employees with paid sick time off for the same COVID-19-related reasons, then the employer may already be in compliance. Since this new entitlement will impact companies very differently, employers should immediately examine the new law and consult their employment law attorney for additional analysis. This law will expire on December 31, 2020.

Key Takeaways For Employers:

  1. Update forms, documents, and Employee Handbooks to account for the changes to the CFRA. This may mean creation of these policies for smaller employers, or editing for larger employers to account for the expanded definition of “family members,” elimination of the “75-mile radius,” and elimination of the “key employee” exception, for example.
  2. Train Human Resources personnel regarding the new CFRA and COVID-19 supplemental paid sick leave.
  3. Understand unpaid vs. paid time off provisions: Companies should understand that the CFRA/FMLA, and Pregnancy Disability Leave provide protected unpaid time off, only. None of these laws provide for paid leave. Employers may sometimes require employees to exhaust paid sick leave, vacation, and/or PTO for income replacement while on these leaves. Such requirements should be reviewed per leave law, and stated in the Employee Handbook. Additionally, even if not mandated by the company, employees may elect to use their accrued paid time off banks. Furthermore, employees would likely be entitled to up to eight (8) weeks of partial income replacement from the State. To receive that “Paid Family Leave” payout, the employee should apply to the Employment Development Department, and the company Handbook should contain this information as well.
  4. For companies with between 5 and 19 employees: Provide training to the appropriate employees who will be able to recognize a DFEH Notice of Right To Sue, and how to determine if the alleged claim(s) would fall under the new small employer mediation program.
  5. For companies with 500 or more employees: Adjust/update itemized wage statements to add the new COVID-19 supplemental paid sick leave total and usage amounts.

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