Episode 89: New Law Expands CFRA to Small Business

Welcome to the Workplace, a podcast by Cal Chamber. I'm Erica Frank, Cal Chamber's general counsel and executive vice president. Back on the podcast today is Jennifer Shaw of the Shaw Law Group. Welcome back, Jennifer.

Hi, Erica. It's great to be here. Thanks for having me.

Absolutely. It's always a delight to have you. And today we're going to be talking about something so fun and interesting. It's that brand new law that was that has come fresh off the governor's desk, which is SB 1383, which expands the California Family Rights act to businesses with only five or more employers. So we know this is a huge game changer for not only our smaller employers, but there's also some little nuggets that impact other employers that have been under the California Family Rights Act. But we want to talk really about what those smaller businesses need to do now before the bill takes effect on January 1st. We know there's new requirements, new responsibilities and oh my gosh, Jennifer, I'm sure that your phone has been ringing off the hook by your clients completely freaked out. Is that for lack of a better.

Word, freaked out is a great term for it, Erica, because for the longest time, smaller employers, as you know, have been so happy that they don't have to comply with the California Family Rights Act. The magic number has always been 50. And I'm sure you won't be surprised when I tell you that many of our clients have done everything they possibly can to stay below 50 because they do not want to be having to deal with the California Family Rights Act. Now, part of I think what's important to understand is that the idea of the Family Rights act, the California Family Rights act, is to let employees have some time off for some very important reasons. Right. If the employee is ill, if their family member is ill, if they want to work with staying home with their children for bonding leave, if they've had a child or they're adopting a child or bring a child into foster care. So there are a lot of good things about this law. It's just that when you take a small employer who, let's say, has six employees, five employees, and you tell them that they've got to give 12 weeks of leave to some of their folks who have been working with them for a certain period of time and meet some certain requirements, it's just a huge burden for them to face at this point with everything else that's going on in the state right now. It is just something that is really significant for smaller employers.

And Jennifer, I think that's really important when we define what we mean by why our smaller employers are freaking out over this or why you, many employers really make an effort to stay under that 50 or more employee threshold that used to be the magic number. And it's not because these employers don't care about their employees, are not empathetic or sympathetic to a serious medical condition that an employee may have that makes it very difficult for them to work. It's the burden and the reality and feasibility of allowing these smaller businesses to be able to continue operating while we have employees out for a 12 week period and sometimes even longer. So I think that is so well stated. To clarify where the concern is coming from. It's not just about the leave. It's the duration of the leave. It's all the hoops and hurdles that are part of the sleeve. And like you said, Jennifer, at this time, at this period of where we are in 2020, where these businesses have been through so much already, this just is a pretty hard pill to swallow.

Well, it is for two reasons I think, Erica. One is just the mere fact that someone's going to be gone for 12 weeks and potentially longer depending on what's going on. And it's job protected leave. So this means you don't just get to replace someone and you may have to get a temp to cover and then you're going to be looking at, well, what if the temp is a better employee than the 101 on leave? Which of course happens sometimes. There are so many things that come up. You have to continue health insurance benefits. There are a lot of entitlements that employees have once they're eligible for the California Family Rights Act. Now the other angle is all of the paperwork. What documents do we give the individual who may be entitled to leave? How do we manage the leave? What if they want to take the leave on an intermittent or reduced schedule leave? Let's say they say I have migraines and I don't know when I'm going to have a migraine, but I'll try to call you as soon as possible. I may need to be out for two or three days at a time. How do you plan for that? Or I'm going to take six weeks off for my knee surgery, but in week five I develop a complication. Now I need seven more weeks. Well, what if you already let the temp go? What if you've already rescheduled? And the thing is, the reason 50 employees made sense was because when you've got 50 or more employees you're more nimble, you can pivot more easily. I'll be honest, I'm a small firm and I am freaking out about this requirement, to use your term, because we are so busy, we don't have anyone sitting around, and our work is not easy to train people to do. We have very specific things we do for our training, for our investigations, and for our advice. And I don't know how I'm going to do it. I have to do it. I will do it, and I'm happy to do it for the individual. If it's just from a business perspective, it is a very significant burden. And by the way, don't forget, for those of you who are thinking, oh, well, all right. This whole podcast is only for small employers who are now subject to the California Family Rights Act. Don't forget that the law expands the definition of family members for everyone who's being covered by the California Family Rights Act. That means that your employees can now take time off for siblings, grandparents, grandchildren, adult children. And because those groups of family members are not entitled to time off under the federal equivalent of the California Family Rights act, which is called the Family and Medical Leave act, you're going to see employees stacking leave. They're going to get 12 weeks of leave for the sibling, but the sibling isn't covered under the FMLA, so they're still going to get their 12 weeks of FMLA for another purpose. This is now looking for employees to get potentially 24 weeks of leave, not just 12 weeks. So this is a huge development, not only for the smaller employers.

That's absolutely right. And that adds up, excuse me, to 24 weeks. Just looking at the California Family Rights act and the Federal Medical Leave act, that doesn't take into account, you know, the other leaves that California employers need to be aware of as well. And not to digress too much, Jennifer, but one of the things that comes to mind is pregnancy disability leave, which we know applies to employers with five or more employees. So, you know, with pregnancy disability leave, we know that the employee may have up to 17 and a third one third weeks time off because of pregnancy, whether it's being affected or disabled by the pregnancy. And now under the California Family Rights act, there's also that baby bonding component.

Yes, 12 weeks.

12 weeks.

It's just, you can see I'm worried about this because let's also add in that under California's pregnancy discrimination law, employees can also be entitled to additional time off beyond the 17 1/3 weeks as a reasonable accommodation of a disability or related to pregnancy or childbirth. And employees get to save their bonding leave. So we're looking at upwards of a year of time off potentially if someone has a difficult pregnancy or childbirth. And again, I'm not saying they're not entitled to the leave. Of course I would want them to take care of themselves and their children and their babies and make sure that everybody's healthy and safe. It's just the impact on the employer is what we've got to deal with.

And just hearing your tone of voice, Jennifer, and how passionate you are about this is such a key signal to why, you know, all of those listening to the podcast today really need to take note of this. It's SB 1383 that you really need to start to take stock in what the requirements are, how they change for those of us that have been under the California Family Rights act and then those of us that have a new president come January 1, 2021, that really need to be aware. Jennifer, what are some things that our employers can do to prepare for this law taking effect?

Well, one of the things that I think is important is for employers to of course, get educated. And you know, I'm sure the Cal Chamber is going to do a webinar. We're going to do a free webinar for folks on just SB 1383 so everybody knows what's going on. We're in the process of getting that scheduled now. So the first thing is to educate. The second thing is you've got to find someone in your organization who's going to be in charge of this. If you only have 5, 10, 15, 20, 30 employees, you probably don't have an on site HR person. But somebody in your organization is going to have to deal with this leave administration. So you've got to find someone to do that. Then you have to get all your forms and documents ready. So there is a lot going on here.

And just kind of in closing, even though we have done a podcast on this when the bill was sitting on the governor's desk, one thing that we didn't talk about today is what the additional requirements are. And Jennifer, maybe we could just close off with yes, you know, 1383 expands to those employers with five or more employees, but the employee still needs to be eligible to receive the leave, correct?

Correct. They have to have 12 months of service and remember, that is not necessarily consecutive. And then they have to have physically worked at least 1,250 hours in the 12 month period preceding the leave. So for newer employees, they're not going to be eligible. But the interesting thing about small employers is they have a much better track record of retention. So many of their employees are going to be eligible for this leave on January 1st.

I think that's so important is to recognize that come January 1st, not only does this law apply, but your employees are now going to be eligible for those that meet that threshold. So again, folks, we will be continuing to provide our listeners, customers, members information regarding this landmark legislation, which quite frankly is one of the top bills Cal Chamber had pointed as a job killer. We recognize the importance and severity of this bill, particularly right now as we close the end of 2020 and things are not letting up for California at all. So recognizing that the silver linings are getting harder and harder to find as this year winds down, but we will make sure that we help you comply. Jennifer, thank you so much for coming today to talk about this important measurement.

Erica, thank you for having me. It is always my pleasure.

And thank you all for joining us on the workplace. Please comment, share and subscribe to Cal Chambers podcast by visiting calchamber.com.