Employment Law Alert: California’s New Parent Leave Act Establishes Parental Leave Rights for FMLA/CFRA-Ineligible Employees

On October 12, 2017, Governor Jerry Brown signed the New Parent Leave Act (“NPLA”) into law. The law, which goes into effect on January 1, 2018, entitles eligible employees to take up to 12 weeks of leave to bond with a new child.  As discussed below, the law impacts employers regardless of whether they are covered by the federal Family & Medical Leave Act (“FMLA”) and California Family Rights Act (“CFRA”). Due to substantial differences between NPLA and FMLA/CFRA, employers will not be able to simply rely upon FMLA/CFRA policies and forms to comply with NPLA.

Eligibility & Employer Coverage

In order to be eligible for leave under NPLA, an employee must have more than 12 months of service with the employer, at least 1,250 hours of service during the previous 12-month period, and work at a worksite in which the employer employs at least 20 employees within 75 miles. This is a significantly lower number of employees than the 50 employee threshold established by FMLA/CFRA. Therefore, NPLA provides new leave rights to employees of employers that are not covered by FMLA/CFRA. And, it provides new leave rights to employees of employers who are covered by FMLA/CFRA, but who work in locations without enough employees for the employee to be eligible for FMLA/CFRA. NPLA is not applicable to employees who are eligible for FMLA/CFRA. However, NPLA does rely on the CFRA regulations to the extent they are not inconsistent with NPLA.

Amount of Leave & Qualifying Events

Eligible employees are entitled to take up to 12 weeks of leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Importantly, leave under NPLA is in addition to leave provided under the California Pregnancy Disability Leave law (“PDL”).

Where both parents are employed by the same employer, the employer is not required to grant parental leave under NPLA that would allow the parents leave totaling more than 12 weeks. Additionally, the employer may, but is not required to, grant simultaneous leave to both parents.

It is also important to note that whereas the CFRA provides employees with 12 weeks of leave to bond with a new child (among other qualifying events) in a 12-month period, NPLA does not restrict the 12 weeks of leave to any 12-month period. For instance, if an employee adopts two children in a 12-month period, the employee would be entitled to 12 weeks of leave for both adoptions (provided the employee meets the remaining eligibility requirements). In this regard, NPLA is more generous than the CFRA.

Substitution of Paid Time Off

Employees on parental leave are entitled to substitute accrued vacation, sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer. Where a form of paid time off is not substituted, the leave is otherwise unpaid.

Unlike NPLA, under the FMLA/CFRA, an employer may require an employee to substitute accrued vacation or paid time off for leave to bond with a new child (although under both NPLA and the CFRA, use of accrued sick time is optional, provided both the employer and employee agree). In this regard, the NPLA provides more flexibility to employees than CFRA when it comes to an employee’s decision to substitute vacation or PTO.

Benefits

Employers must continue group health insurance coverage for employees on parental leave at the same level and under the same conditions that coverage would have been provided if the employee had continued to work in his or her position for the duration of the leave, not to exceed 12 weeks over the course of a 12-month period. This requirement for continued health insurance coverage is the same as that found in the FMLA/CFRA.

Employers can recover health insurance premiums paid under NPLA if: (1) the employee fails to return from leave after the period of leave to which the employee is entitled has expired; and (2) the failure of the employee to return from leave 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.

Reinstatement

On or before the commencement of the parental leave, an employer must provide a guarantee of employment in the same or a comparable position upon the employee’s termination of the leave. Should the employer fail to do so, NPLA provides that the employer shall be deemed to have refused to allow the leave. Such a notice should be included in the employer’s standard leave letter.

Non-Retaliation

It is unlawful for an employer to refuse to hire, or to discharge, fine, suspend, expel, or discriminate against, an individual because of an individual’s: (1) exercise of the right to parental leave under NPLA; or (2) giving information or testimony as to his or her own parental leave, or another person’s parental leave, in an inquiry or proceeding related to rights guaranteed under  NPLA. It is also unlawful for an employer to interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided under NPLA.

Mediation

Once the Department of Fair Employment & Housing receives funding from the Legislature, the law provides for the creation of a parental leave mediation pilot program. Under the program, an employer may, within 60 days of receipt of a right-to-sue notice alleging violation of NPLA, request all parties to participate in the DFEH’s mediation program. If an employer requests mediation within 60 days of receipt of a right-to-sue notice, an employee cannot pursue any civil action until the mediation is complete. To be clear, however, the mediation requirement does not bar an employee from filing a lawsuit. The employee must simply participate in mediation, and if the case does not settle, a lawsuit may be filed.

The provision regarding mediation is effective only through January 1, 2020.

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Employers are advised to update their leave policies and notice forms to be ready to comply with the law by its January 1, 2018 effective date. Employers with any employees working in San Francisco are also reminded to ensure they are in compliance with requirements to provide paid parental leave pursuant to the San Francisco Paid Parental Leave Ordinance (access a firm article about the San Francisco law here).