On September 17, 2020, California Governor Newsom signed Senate Bill (“SB”) 1383, which amends and expands the California Family Rights Act (“CFRA”) to apply to small California businesses. Beginning January 1, 2021, all California businesses with five (5) or more employees must provide up to 12 weeks of unpaid job-protected leave. As explained below, SB 1383 expands the CFRA beyond its federal counterpart the Family and Medical Leave Act (“FMLA”). Additionally, the Fair Employment and Housing Council (“FEHC”) has proposed new regulations to implement the amended California Family Rights Act (read our blog on the 2015 changes). These proposed regulations also contain a revised text for the notice employers must post in their workplace, as well as a revised certification form.

California employers with five (5) or more employees must prepare now for this significant change that will impact them on January 1, 2021.

Types of Leave

SB 1383 provides leave for any of the following:

(A) Leave for reason of the birth of a child of the employee or the placement of a child with an employee in connection with the adoption or foster care of the child by the employee.

(B) Leave to care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner who has a serious health condition.

(C) Leave because of an employee’s own serious health condition that makes the employee unable to perform the functions of the position of that employee, except for leave taken for disability on account of pregnancy, childbirth, or related medical conditions.

(D) Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, as specified in Section 3302.2 of the Unemployment Insurance Code.

In California, employers with five (5) or more employees are required to provide up to four months of pregnancy disability leave per pregnancy (see the FAQ: Pregnancy Disability).

Employer Coverage

Currently, CFRA applies to employers with 50 or more employees. Earlier this year, the New Parent Leave Act (“NPLA”) (for more information read our blog), which applies to businesses that employ 20 to 49 workers, went into effect. As of January 1, 2021, NPLA will be repealed, and will be replaced by the CFRA as amended by SB 1383.

Employers concerned about whether they meet the new five (5) employee threshold will need to refer to CFRA regulations 2 CCR 1197 (d). The regulations explains that an employer includes those who:

• Directly employ five (5) or more persons in any U.S. state, the District of Columbia, or any U.S. territory or possession, who perform services for a wage or salary.
• Public entities such as the state of California, counties, and any other political or civil subdivision of the state and cities, regardless of the number of employees.
• Joint employers that exercise some control over the work or working conditions of the employee based on the entire relationship between the businesses.

Properly classified independent contractors (see our blog) are not included in the employee count.

Small employers will need to review whether they have employed five (5) or more employees during at least 20 workweeks in the current or previous calendar year. If so, this expansion to the CFRA will apply to them. Also, employers who laid off staff due to COVID-19 such that the current employee count is under five (5) may nonetheless be legally required to provide CFRA leave under SB 1383.

Employee Eligibility

Currently, employees seeking leave under CFRA and FMLA must work 1,250 hours during the 12-month period immediately preceding their request for leave, and work at a location that employs 50 or more employees within a 75-mile radius.

However, as of January 1, 2021, the “75-mile radius” requirement will be eliminated.  This means even remote isolated workers may be eligible for this expanded CFRA leave. The requirement that an employee must have at least 1,250 hours of service in the prior 12 months in order to be eligible for CFRA leave will remain.

Designation of Leave

Under current law, it is the employer’s responsibility to designate leave, paid or unpaid, as CFRA, NPLA and/or FMLA. Employers may not retroactively designate leave as CFRA, NPLA or FMLA leave after the employee has returned to work, except with appropriate notice to the employee and where the employer’s failure to timely designate does not cause harm or injury to the employee. The federal Department of Labor’s 2019 opinion letter states that neither an employee nor an employer may decline FMLA leave where an eligible employee is absent for an FMLA-qualifying reason. However, in the case of Escriba v. Foster Poultry Farms, the Ninth Circuit Court of Appeals decided that an employee can decline FMLA leave and use paid leave instead, even when the underlying reason for leave qualifies for FMLA.

SB 1383 does not address the Escriba holding, but it does require employers to provide the employee, upon granting the leave request, a guarantee of employment in the same or a comparable position upon the termination of the leave. Otherwise, under SB 1383, “family care and medical leave shall not be deemed to have been granted.” Failure to provide this guarantee will be the basis of an unlawful employment practice for any employer who refuses to grant a request by an employee that meets the eligibility criteria.

Definition of a Family Member

Current CFRA and FMLA law allows leave to care for a “child, spouse or parent” with a “serious health condition.” SB 1383 significantly broadens the definition of a family member.

• Current law requires the child to be under 18 or an adult dependent child. SB 1383 removes that requirement. All children, regardless of age or capacity, of the employee and the employee’s spouse or domestic partner are included in the definition of family member.
• Current law limits leave to a spouse or a parent. SB 1383 adds grandparent, grandchild, sibling, and domestic partner. Note that while SB 1383 defines the term “parent-in-law,” SB 1383 does not specifically incorporate that term in any of the qualifying reasons for leave. However, the FHEC’s proposed regulations include a “parent-in-law” as a family member with a serious health condition.

Currently, employers have the ability to designate leave under both CFRA and FMLA. The expanded definition of a family member may result in 24 workweeks of job-protected leave in a 12-month period. For example, an employee may qualify to take 12 workweeks of CFRA leave to care for their in-law with a serious health condition (a familial relationship not covered under FMLA) and then take 12 workweeks of leave under FMLA for their own serious health condition. During the pandemic, this scenario is very likely.

The certification requirement supporting the employee’s request for leave to care for a family with a serious health condition also applies to the newly recognized familial relationships.

The good news is that SB 1383’s new definition of a family member is now aligned with California’s paid sick leave law and kin care law.

New Qualifying Exigency Leave

Although already available under the FMLA, leave for a “qualifying exigency” will now be available under CFRA, starting in 2021. Under the FMLA, eligible employees may take FMLA leave for a “qualifying exigency” arising from the foreign deployment of the employee’s spouse, son or daughter of any age, or parent with the Armed Forces (regular Armed Forces and reserve components such as the National Guard and Reserves). Leave for a “qualifying exigency” recognizes that deployment to a foreign country can change the military and family member’s life very quickly and employees may need time away from work to address these issues. Examples include making different day care arrangements, attending official military ceremonies, and making care arrangements for the military member’s parent who is incapable of self-care. Under FMLA, “spouse” includes legally married couples, whether opposite-sex or same-sex, or married under common law.

SB 1383’s leave for a “qualifying exigency” is somewhat similar to FMLA. Under SB 1383, qualifying exigency leave is available for the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child or parent in the Armed Forces of the United States, as specified in Section 3302.2 of the Unemployment Insurance Code.

Effective January 1, 2021, wage replacement benefits under the Paid Family Leave program will also expand to include new eligibility for employees who take time off work due to a “qualifying military event,” arising out of the overseas military deployment of the employee’s family member.

Therefore, since both SB 1383 and the proposed CFRA regulations also refers to the Unemployment Insurance Code, Section 3302.2 contains the list of events that will determine eligibility for both CFRA leave and wage replacement benefits (as administered by the Employment Development Department). There are differences in the list of qualifying exigencies under FMLA and Section 3302.2. Employers should examine the list under both. Employers can also take advantage of similar catch-all provisions that permit the employer and employee to agree that the activity or event “shall qualify as an exigency, and agree to both the timing and duration of this leave.” This catch-all provision should permit the employer to count leave under both CFRA and FMLA.

Limitation of Leave for Both Parents

Under the current CFRA, NPLA and FMLA, eligible spouses who work for the same employer are limited to a combined total of 12 workweeks of leave in a 12-month period for the following reasons:

• The birth of a son or daughter and bonding with a newborn child,
• The placement of a son or daughter with the employee for adoption or foster care and bonding with the newly-placed child, and
• The care of a parent with a serious health condition (CFRA and FMLA only).

SB 1383 removes that restriction. Therefore, starting in 2021, eligible parents working for the same employer can each take 12 workweeks of leave in the same 12-month period.

Right to Reinstatement

Current law requires an employer to reinstate an employee to the same or a comparable position unless all of the following apply:

• The employee is a “key employee.” A “key employee” is a salaried, CFRA, NPLA or FMLA-eligible employee who is among the highest paid 10 percent of all the employees employed by the employer within 75 miles of the employee’s worksite.
• Reinstatement would cause substantial and grievous economic injury to the operations of the employer.
• Such notice is provided to the employee at the time the employer determines the refusal is necessary.
• The employer provides the employee the opportunity to return to work following notice that reinstatement will be denied.

SB 1383 removes the ability to deny job restoration to a “key employee.” This means California employers must reinstate a “key employee.”

The proposed changes to the CFRA regulations regarding permissible defenses so far remain unchanged. Permissible defenses for an employer who denies a right to reinstatement include situations where the employee’s employment would have otherwise ceased or been modified independent of the CFRA leave due to, for example, a layoff, reduction in hours or disciplinary action unrelated to CFRA leave. Another permissible defense is where the employee fraudulently took CFRA leave when they did not otherwise qualify for the leave. The employer bears the burden of establishing both defenses.

Other CFRA Requirements

The following are current CFRA requirements that remain the same:

• Requirement to maintain group health benefits to the same extent as they were before the commencement of the employee’s leave.
• Coordinating CFRA leave with other applicable leave laws.
• Anti-retaliation provisions.
• Use of paid time-off and other wage replacement benefits (i.e., Paid Family Leave benefits).
• Leave taken for disability on account of pregnancy, childbirth, or a related medical condition is separate from CFRA leave. In addition, separate from CFRA is the employer’s obligation to maintain the employee’s group health coverage during a pregnancy disability leave. An employee on leave due to a pregnancy disability and then for the birth of the child may be on leave for approximately seven months: 4 months of pregnancy disability leave and 12 workweeks of CFRA leave.
• Employers must post a notice regarding the employee’s right to take CFRA leave in a conspicuous place. The notice must also be posted in any non-English language spoken by at least 10 percent of the workforce. The notice is currently pending revision since it is contained in the CFRA regulations before the FEHC (see discussion above).

Recommendations for Employers

• Become familiar with the provisions of CFRA and understand how it might affect your business.
• Include a carve-out from attendance and discipline policies for CFRA, just like other protected leaves of absence.
• Review leave policies and revise to include expanded CFRA leave rights in employee handbooks.
• Train those in supervisory positions and those that help with human resources functions to identify whether an employee may be eligible for CFRA leave.
• This and other new California laws for employers will be discussed at our upcoming California Employment Law Update live webinar on November 4, 2020. For more information on these and other events, visit our Events Page.