San Francisco Apartment Association

Feature

Update on Recent Changes in Employment Laws

by Margaret J. Grover

California employment laws change regularly. Keeping current of the new developments is an important key to protecting your business. A few changes that you should be aware of are:

  • paid family leave
  • workers’ compensation reform
  • extended anti-discrimination protections
  • domestic partner benefits
  • sexual harassment training

Paid Family Leave
In July 2004, California became the first state in the nation to provide Paid Family Leave (PFL). Under California’s disability insurance program, employees will be eligible for up to six weeks of compensated time off from work to care for a seriously ill child, spouse, parent, domestic partner or to bond with a new child
(Cal. Unemployment Ins. Code §3301). According to this new program, “No more than six weeks of family temporary disability insurance benefits shall be paid within any 12-month period.”

There are no minimum employer-size or employee-service requirements; any employer that has employees covered by California State Disability Insurance (SDI) or a voluntary plan is covered by PFL. The employee can use PFL benefits when he or she is needed to provide or participate in the family member’s medical care, to provide psychological comfort or to arrange third-party care. An employee is not eligible for PFL benefits on any day that another family member is able and available to provide the required care.

An individual is not eligible for family temporary disability insurance benefits under the following circumstances:

  • the individual has received, or is entitled to receive, unemployment compensation benefits;
  • the individual has received, or is entitled to receive, other benefits in the form of cash benefits as defined in Section 2629 of the statute;
  • the individual has received, or is entitled to receive, state disability insurance benefits; or
  • another family member is ready, willing, and able and available for the same period of time in a day that the individual is providing the required care.

Employees receive PFL benefits at the same rate they receive SDI benefits for their own disability. Typically, this is just over half the employee’s wages, with a maximum weekly amount. The costs of the PFL benefits are funded through an increase in employee SDI contributions that became effective on January 1, 2004. There is a seven-day waiting period for each PFL before the employee is eligible to receive benefits.

PFL is not, by itself, protected time off. If the employee is entitled to leave under the Federal Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA), the PFL benefits will not extend the amount of protected time off. Instead, the PFL benefits will run concurrently with the FMLA or CFRA leave policies.

PFL leave is different from FMLA and CFRA because there are no minimum employer size or employee-service requirements; any employer that has employees covered by SDI or a voluntary plan is covered by PFL. In addition, the
PFL leave statute does not carry any requirement that the employee provide advance notice of the need for leave.

Both employers and employees should be aware that PFL benefits provide no guarantee that the employee will be able to return to work after taking the PFL. Any right to return to work will be governed by the FMLA, CFRA, contract, the employer’s policies, or public policy. Employers can apply policies to the PFL that prohibit excessive absenteeism in the same manner that the employer applies its absenteeism policy to the employee’s absence. Although there is no right to reinstatement, some employees will almost certainly assert that a refusal to reinstate following PFL is a termination in violation of public policy.

Employers may require that an employee use up to two weeks of accrued vacation leave before he or she receives PFL benefits. If the employer elects to require the use of vacation time, one week of vacation time will apply to the seven-day waiting period. In most instances, when the employer requires the use of vacation time, the employee will be eligible for PFL payments immediately after receiving her or his vacation pay.

Employers must notify their employees of the ability to take PFL leave. An approved notice is available from the California Employment Development Department. This notice must inform workers of their disability insurance rights and benefits due to the employee’s own sickness, injury or pregnancy, or the employee’s need to provide care for any sick or injured family member or new child who is unable to care for himself or herself. Employers must give this to each new employee hired on or after January 1, 2004, and to each employee leaving work due to the preceding listed reasons. The Employment Development Department has also published a brochure that can be used to explain the employee’s right to PFL benefits.

The ability to receive some pay during time off will dramatically increase the use of time off to care for family members. Employers who are not covered by the FMLA or CFRA will probably experience the greatest impact from PFL benefits, for their employees who previously did not have the right to take time off to care for family members will now believe that PFL benefits is protected time off for that purpose.

Employers should review their employee handbooks, leave policies, and workplace notices to make sure that the PFL benefits and notice provisions are adequately covered. Employers must decide whether they will require employees to use vacation before receiving PFL benefits and, if so, what amount of vacation will be used. In addition to the statutorily required notices, employers should determine, in advance, what guidelines they will follow in reinstating employees who use PFL benefits.

Workers’ Compensation Reform
In early 2004, the California Workers’ Compensation Act underwent significant reform. While the complete scope of the reform is beyond the dimensions of this article, employers should keep in mind the following points. First, employers and insurers may contract with approved provider networks for treating work-related injury and illness and, thus, control treatment. Employees may seek second and third opinions from their choice of doctors within the network. An injured worker who is unsatisfied with recommendations from network doctors may appeal to an Independent Medical Reviewer (IMR). If the IMR agrees with the injured worker, the injured worker may seek treatment from a doctor of his or her own choosing, and the employer loses medical control.

Second, employees may only pre-designate treating physicians who are part of the employer’s health benefits plan. Third, employers and insurers must authorize medical treatment within one day of receiving an occupational injury claim, even though the claim may be delayed for up to 90 days for investigation. Liability for pre-acceptance medical treatment is capped at $10,000. Fourth, employers who have fewer than 50 employees are eligible for subsidies of workplace modifications and special equipment as part of a return-to-work program. Fifth, employers who have 50 or more employees and who return disabled employees to work may be entitled to a reduction in permanent disability payments. Sixth, California employers must post a revised version of the Workers’ Compensation poster in all workplaces as of August 1, 2004. And last, California employers must distribute a new version of the Workers’ Compensation Employee Pamphlet to all employees hired on or after August 1, 2004. The employee must receive the pamphlet by the end of her or his first payroll period.

Anti-Discrimination Provisions
California has long protected employees against discrimination and retaliation because the employee filed a Labor Commissioner claim or exercised rights afforded to employees under the Labor Code, on behalf of himself, herself or others (Cal. Labor Code §98.6). Recent changes extend those protections to applicants for employment who are refused employment, not selected for a training program leading to employment or discriminated against in any other manner. In addition, the employer may be convicted of a misdemeanor.
Domestic Partner Benefits

Effective January 1, 2005, domestic partners will have a great many new rights and responsibilities, including laws governing community property, property transfer, duties of mutual financial support and mutual responsibilities for certain debts to third parties, as well as many others. After January 1, 2005, California employers must provide registered domestic partners with all benefits provided to spouses. This change will affect both benefits, such as insurance, and certain leave laws, such as the California Family Rights Act.

Mandatory Sexual Harassment Training
Effective January 1, 2005, all businesses with more than 50 employees will have to provide training on the prevention and resolution of sexual harassment to all their supervisory employees. In determining whether the statute applies, in terms of numbers, employers should count all employees and not just those in California. In addition, employers should include all contractors who regularly provide services to the employer. The statute does not explain who is a supervisory employee. Training appears to be mandated for any employee who has the authority to hire, fire, provide substantial input into hiring or termination decisions, review employee performance, administer discipline or give day-to-day direction.

California Government Code Section 12950.1 will require two hours of classroom or other interactive training for each supervisory employee. All supervisors employed as of June 30, 2005, must be trained in 2005, unless they have received training within the preceding two years. Individuals hired or promoted to supervisory positions after that date must be trained within six months of becoming a supervisor. After the initial training, supervisors must receive follow up training every two years.

Because Section 12950.1 requires the training to be interactive, neither a video nor most computerized programs will meet the statutory requirements. The training will have to include identification of prohibited conduct, methods to prevent harassment, tips for correcting inappropriate behavior, penalties that can flow from sexual harassment and examples of inappropriate behavior.

Failure to provide the required training will increase the employer’s risk in any sexual harassment claim. Under California law, employers are required to take reasonable steps to prevent harassment in the workplace. The new training requirements are one measure of whether the employer has made sufficient efforts to provide a harassment-free work environment.


The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or the San Francisco Apartment Magazine. Margaret J. Grover is a partner in the San Francisco office of Haight, Brown & Bonesteel, LLP. She represents employers in a wide range of employment-related matters; she focuses on preventive employment practices, designed to assure compliance with applicable laws and regulations; and provides the best defense posture in the event of litigation. Copyright © 2005 by the San Francisco Apartment Magazine. All rights reserved.