San Francisco Paid Parental Leave Ordinance Applies to a New Group of Employers

The Family and Medical Leave Act (FMLA) provides eligible employees with 12 weeks of job-protected leave, but federal law does not require this leave to be paid–effectively leaving the decision in the hands of covered employers. In the absence of paid family or sick leave provisions in federal law, a growing number of states, including California, New York, Washington, and Arizona have begun to fill the gap.  Follow the Zenefits blog as we discuss major developments in the 2017 leave landscape, and how Zenefits can help you comply with the new regulations in your state or city!

What’s coming for San Francisco 

As of July 1, 2017, a new group of San Francisco employers, with 35 or more employees, will have to comply with San Francisco’s Paid Parental Leave Ordinance (“PPLO”), in addition to the larger employers already bound by the Ordinance. Passed in 2016, the SF-PPLO requires covered employers to provide supplemental compensation to employees receiving wage replacement benefits under California Paid Family Leave (PFL), ensuring that a combination of the PFL wage replacement and employer compensation equal 100% of the employee’s gross weekly wages. The supplemental compensation must be paid at the same time the employee receives their Paid Family Leave Benefit, for up to 6 weeks within any 12 month period.
Timing: The Paid Parental Leave Ordinance phases-in progressively smaller employers over 2017-18, in the following order:

• Employers with 50 or more employees are required to abide by SF PPLO beginning on January 1, 2017.
• Employers with 35 or more employees are required to abide by SF PPLO beginning on July 1, 2017.
• Employers with 20 or more employees are required to abide by SF PPLO beginning on January 1, 2018.

Employee Eligibility:

Employees must receive supplemental compensation under SF PPLO if:

1. The employee meets the eligibility criteria for California Paid Family Leave, for the purpose of bonding with a new child (requirements here). NOTE: In order to receive benefits under SF-PPLO, employees must first apply and be approved for California Paid Family Leave Benefits, and disclose the benefit amount in the relevant paperwork to employers.
2. They began employment with the covered employer at least 180 days prior to the commencement of their leave period.
3. They perform at least 8 hours of work per week for the employer in San Francisco.
4. At least 40% of the employee’s total weekly work hours for the employer are in San Francisco.

NOTE:

The wage replacement percentage covered by California Paid Family Leave is scheduled to increase in 2018 to 60 or 70% in 2018, depending on income. SF-PPLO will be adjusted accordingly.

As an employer, how do I calculate my compensation amount?

An employer’s supplemental compensation calculation is based on the number of individuals employed, and whether they receive and report gratuities or tips. Specific calculation instructions depending on the type of employer and employee can be found here.
Maximum Benefit Cap: SF-PPLO also includes a cap on the maximum amount of benefits an employee may receive per week, which is proportional to the California Paid Family Leave maximum weekly benefit amount. In 2017, a San Francisco employee’s maximum weekly benefit under SF PPLO would be $2,133.

Notices and Forms:

In addition to supplemental compensation, covered SF employers must also provide their employees with the following:

• An SF PPLO poster informing employees of their rights, as well as a description of their right to supplemental compensation in the next employee handbook.
• An SF PPLO form at the time of hire, or when the employee asks about parental leave.

Worried about navigating these complicated changes for your business? That’s where Zenefits comes in. Our team gets you set up with the tools you need to comply with new family and sick leave laws, all of which integrate seamlessly with your HR processes. Visit our Help Center for further details on coverage, notice, and paid time off requirements. 
Discover how Zenefits’ Time and Attendance can help you tackle all things time related for your employees – chat with an HR specialist today to learn more.