News & Updates: San Francisco Publishes Rules and Forms for Paid Parental Leave

Just a few days before the January 1, 2017 effective date of the San Francisco Paid Parental Leave Ordinance, the San Francisco Office of Labor Standards Enforcement (“OLSE”) published forms that covered employers are required to use to comply with the ordinance and also issued rules interpreting the ordinance.  The forms and rules, which are summarized below, are available on the OLSE website.

Background of Ordinance:

The Paid Parental Leave Ordinance requires covered employers to provide compensation to supplement California Paid Family Leave (PFL) benefits received by eligible San Francisco employees who are on leave to bond with a new baby or child.  Employers who employ 50 or more employees became covered by the ordinance on January 1, 2017; employers with 35 or more employees will become covered by the ordinance on July 1, 2017; and employers with 20 or more employees will become covered on January 1, 2018.  In determining whether an employer has enough employees to be covered by the ordinance, employers must count all employees, whether full time, part time, seasonal, temporary or contracted through another entity – and regardless of the location in which the employees work.  Thus, an employer with just one employee working regularly in San Francisco that also employs 49 other employees across the United States would be covered by the ordinance as of January 1, 2017.  The new OLSE rules address how to determine whether an employer is covered by the ordinance if the size of the employer’s workforce fluctuates.

Covered employers must provide supplemental compensation in the amount of the difference between PFL benefits received by an employee and the employee’s regular compensation, up to a maximum weekly amount determined annually.  To be eligible for supplemental compensation from a covered employer, an employee must work eight hours per week in San Francisco and have been employed by the employer for 180 days.  The new rules give guidance on calculating the 180 days where an employee’s work hours fluctuate or an employee has a break in service.

Newly Published Forms Covered Employers Must Use:

• Paid Parental Leave Form and Instructions:  In order to be eligible for supplemental compensation, employees must provide their employer the information required on this form.  The form requires employees:  (1) to select a method to provide the employer information on PFL benefits they receive; (2) to agree to repay supplemental compensation received from the employer if they resign from employment within 90 days of the end of their leave; and (3) to provide the employer information on income from other employers since, where an employee has multiple employers, each employer is responsible only for a proportionate share of supplemental compensation.

An employer must provide the Paid Parental Leave Form and Instructions to an employee within a reasonable time after the employee informs the employer that s/he is expecting a newborn or the placement of an adopted or foster child or sooner if the employee inquires about paid parental leave.  We recommend that employers covered by the federal Family and Medical Leave Act (“FMLA”) provide employees with a copy of this form at the time they provide employees the “Notice of Rights and Responsibilities” required by the FMLA.

Note: Employers are required to provide the Paid Parental Leave Form in English and in any languages spoken by more than 5% of the employer’s workforce.  The OLSE is required to make the form available in Spanish, Chinese, and Filipino/Tagalog but has not yet done so.

• Paid Parental Leave Notice: Covered employers must post this notice in a conspicuous place in any workplace or job site where employees covered by the ordinance work.
• Instructions for Calculating Supplemental Compensation for an Employee.  The OLSE has published instructions to calculate supplemental compensation in four different situations, specifying the calculation for (a) employees with either a single employer or multiple employers, and for each, (b) employees who do and do not receive tips as part of their compensation.

What Should Covered Employers Do?

• Post the new OLSE notice
• Update leave forms to include information on the ordinance
• Update leave policies in employee handbooks to incorporate the requirements of the ordinance
• Distribute the Paid Parental Leave Form to employees who may be taking leave to bond with new babies or children