Governor Newsom Signs SB 1383 Into Law, Significantly Expanding CFRA Family and Medical Leave to Smaller Employers and Expanding Overall Uses of CFRA Leave

On September 17, 2020, Governor Gavin Newsom signed into law Senate Bill (“SB”) 1383, which significantly expands the California Family Rights Act (“CFRA”) family and medical leave law under Government Code section 12945.2 by now applying it to all employers with 5 or more employees, adding the ability to care for a serious health condition of more family members, and eliminating other previous restrictions on the use of CFRA leave.  By doing so, this means that CFRA will now deviate further from the federal Family Medical Leave Act (“FMLA”) that it otherwise generally ran concurrently with, and could potentially create entitlements for employees under both laws for up to 24 weeks of protected leave in a 12-month period under certain circumstances.   SB 1383 is effective January 1, 2021.

Below is a summary of SB 1383 and its impact on public agency employers.

A.  CFRA Leave is Now Applicable to All Employees Who Work for an Employer With Five or More Employees.

While CFRA currently defines an “employer” to include all public agencies, a public sector employee could only qualify to take CFRA leave if their worksite had 50 or more employees in a 75-mile radius.  As a result, only those public agencies with 50 or more employees in a 75-mile radius would have employees who could qualify for CFRA leave.  This matched the FMLA standard, which uses the same definitions.

In addition to lowering the private sector employer threshold to 5 or more employees and still including all public agencies as an “employer”, SB 1383 also eliminates the 50 or more employees in a 75-mile radius definition for an employee to qualify for CFRA leave.  The impact on this for smaller public agencies with less than 50 employees, is that they now must provide CFRA leave to a qualified employee so long as they have 5 or more employees.  An employee now only has to meet the following criteria in order to qualify for CFRA leave:

• Worked for the employer for at least 12 months of service (can be nonconsecutive work for employer over a 7-year period, except that any military leave time while employed counts towards this 12 months of service); and

• Worked at least 1,250 hours in the 12-month period prior to taking CFRA leave.

Therefore, any public agencies with 5 to 49 employees who were not previously covered under CFRA are now covered once this law becomes effective on January 1, 2021 and will have to provide qualified employees the following leave entitlements:

• Up to 12 weeks of unpaid family and medical leave for qualifying purposes in a 12-month period;

• Continuation of health insurance benefits at the same level as if the employee had been continuously employed during the CFRA leave; and

• Right to reinstatement to the employee’s same or comparable job position to the extent that the employee would have remained in that position if they had been continuously employed during the CFRA leave.

Because of SB 1383’s expansion of CFRA leave to employers with 5 or more employees, the existing New Parent Leave Act (“NPLA”) that became law in 2018 and provided CFRA-like bonding leave rights to smaller employers with 20-49 employees under Government Code section 12945.6 is being repealed as it is no longer needed.

While the federal FMLA remains unchanged and still does not apply to smaller public agencies with less than 50 employees, CFRA leave will now apply to such agencies effective January 1, 2021.

B.  Expanded Uses of CFRA Leave

The other major impact of SB 1383 that is applicable to all employers – including those that have already been covered under CFRA – is the expansion of the types of leave that can be used under CFRA.

Under SB 1383, CFRA leave to care for a family member with a serious health condition has been expanded to include more family members of the qualified employee.  Covered family members now include grandparent, grandchild, and sibling – in addition to the existing parent, child, spouse, or registered domestic partner.  However, this change expands CFRA’s deviation from the FMLA to add grandparent, grandchild, and sibling, along with the existing inclusion of registered domestic partner in its definition of “family member” that is not a part of the FMLA’s definition of that term.  As you may recall, both California’s Paid Sick Leave Law (Labor Code sections 245, et. seq. – effective January 1, 2015) and the revisions to California’s Family Sick Leave law (Labor Code section 233 – effective January 1, 2016) added grandparent, grandchild, and sibling as family members for whom an employee could use their accrued sick leave.  SB 1383 now adds those family members with serious health conditions to the list for whom an employee can take CFRA leave if their care is needed.

In an interesting twist, SB 1383 adds a definition of “parent-in-law” to CFRA, but does not reference the term anywhere else in the statute and therefore does not provide an employee a new right to take CFRA leave to care for the serious health condition of a parent-in-law.  It is unclear at this time if future legislation may expand CFRA leave to also cover an employee taking leave to care for a parent-in-law with a serious health condition.

In addition, SB 1383 eliminates the previous restrictions under CFRA, which indicated that an employee could not take leave to care for their adult child over 18 years of age with a serious health condition unless that child was incapable of self-care because of a physical or mental disability.  This restriction had mirrored the FMLA’s definition of “child”, but now will deviate from that FMLA standard and allow a qualified employee to take CFRA leave to care for an adult child who has a serious health condition.

In a move that now brings CFRA more in line with FMLA, SB 1383 also is adding “qualifying exigency” leave related to the covered active duty or call to covered active duty for an employee’s spouse, registered domestic partner, child, or parent in the United States Armed Forces.  This generally mirrors the FMLA’s “qualifying exigency” family military leave that was added in 2008, and only slightly expands it to also include an employee’s registered domestic partner who is in the United States Armed Forces.

With SB 1383’s new additions to CFRA leave use, a qualified employee can take CFRA leave for one of the following reasons (with the new additions in bold text):

• 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;

• Leave to care for a child (including an adult child over 18 years of age), parent, grandparent, grandchild, sibling, spouse, or registered domestic partner who has a serious health condition;

• 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; or

• Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, registered domestic partner, child, or parent in the United States Armed Forces.

The end result here is that CFRA qualified employees will now have the ability to use CFRA leave for more reasons, including some that will not run concurrently with FMLA.

C.  Other Significant Changes to CFRA

SB 1383 also makes two additional significant changes to the terms and conditions of CFRA leave that will also deviate from the FMLA:

• Eliminates the existing restriction in CFRA that allows an employer who employs both parents to limit their total amount of CFRA leave for both individuals to a total of 12 weeks for bonding with a newborn child, adopted child or foster care placement.  The FMLA has a similar provision allowing such a limitation of a total of 12-weeks for bonding leave where both spouses are employed by the same employer.  As a result of this change, where both parents are employed by the same employer and take CFRA bonding leave, they are now both entitled to a total of 12 weeks individually for such leave.

• Eliminates the “key employee” exception to an employee’s right to reinstatement.  Currently under CFRA (which mirrors the FMLA), there is a very limited “key employee” exemption that allows an employer the ability to deny reinstatement to an employee who takes CFRA leave where the employee is among the highest paid 10% of the employer’s employees, the denial is necessary to prevent substantial and grievous economic injury to the operations of the employer, and where the employer notifies the employee of its intent to deny reinstatement.  SB 1383 now eliminates this limited “key employee” exemption and requires an employer to provide a right to reinstatement to all employees.  Following this change, the only other permissible defenses for an employer to deny a right to reinstatement is where the employee’s employment would have otherwise ceased or been modified independent of the CFRA leave (e.g., layoff, reduction in hours or disciplinary action unrelated to CFRA leave), or where the employee fraudulently took CFRA leave when they did not otherwise qualify for the leave.  The burden is on the employer to establish both such defenses.

D.  Impacts of SB 1383’s Changes to CFRA on its Interaction With FMLA

Because SB 1383 makes significant changes to CFRA, a number of these changes also create a greater potential for an employee who is covered under both FMLA and CFRA to have their leaves not run concurrently, and therefore be entitled to a greater amount of protected leave.

With SB 1383’s changes, an employee’s CFRA leave does not run concurrently with FMLA under the following circumstances (with the expanded reasons in bold text):

• Leave due to pregnancy related conditions – which is considered a “serious health condition” under FMLA – is generally not considered a “serious health condition” under CFRA unless the employee has already exhausted their separate Pregnancy Disability Leave (“PDL”) entitlement under California Government Code section 12945;

• Leave to care for a serious health condition of a registered domestic partner, adult child who is not incapable of self-care, grandparent, grandchild, or sibling;

• Leave because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s registered domestic partner in the United States Armed Forces; and

• Leave to care for an employee’s parent, child, spouse or “next of kin” who is a covered servicemember with a serious injury or illness for up to 26 weeks under FMLA (although, CFRA leave may run up to 12 weeks to the extent such leave also qualifies as leave to care for a parent, child or spouse with a serious health condition).

The impact of these expanded leave areas where CFRA leave does not run concurrently with FMLA is that a qualified employee may be therefore be able to receive up to 12 weeks of CFRA leave and a separate 12 weeks of FMLA leave – for a total of 24 weeks of protected leave – in a 12-month period.  For example, if a qualified employee takes 12 weeks of CFRA leave to care for a grandchild with a serious health condition (something that is not covered under FMLA), that employee would then still have 12 weeks of FMLA leave available in the relevant 12-month period.  As a result, SB 1383 will create more scenarios where an employee can be out on a protected unpaid leave of absence with continued health insurance benefits and a guaranteed right to reinstatement for up to 24 weeks in a 12-month period.

E.  Employer Preparations for SB 1383

Because SB 1383 is not effective until January 1, 2021, employers do have some time to prepare for its changes.  Here are some suggested preparations that employees should make:

• For smaller agencies with 5-49 employees who have not been previously covered under CFRA, it is important to modify existing policies and procedures to provide for CFRA leaves of absence.  CFRA is a very complex law and there are a number of specific issues such as application of accrued paid leaves, concurrent use of SDI/PFL benefits, medical certifications, and specific employee notice requirements that must be properly implemented.  Supervisors and Human Resources staff should be trained on the application of CFRA leaves and applicable forms and procedures should be implemented so the agency is prepared to provide CFRA leaves to qualified employees upon the implementation of this new law.

• For larger agencies with 50 or more employees who have already been covered under CFRA (and FMLA), revisions should be made to existing FMLA/CFRA leave policies to incorporate these revisions to CFRA.  In addition, agencies should examine how they track FMLA and CFRA leaves to ensure they properly track when such leaves run concurrently or separately, as referenced above.  Supervisors and Human Resources staff should also be trained on the changes to CFRA and the new qualifying uses of the leave.

It is also important to note that the existing CFRA regulations promulgated by the Department of Fair Employment and Housing (“DFEH”) (2 C.C.R. §§ 11087-11097) are drafted to the existing CFRA law and will have sections that are inconsistent with the changes made under SB 1383.  Until the DFEH’s Fair Employment and Housing Council can propose and implement revisions to these regulations in accordance with the changes made by SB 1383, employers should be cautious in their reliance on such regulations and seek legal counsel to ensure compliance with the law.

Overall, it is important for employers to begin reviewing their existing policies and procedures now in order to make the necessary adjustments in light of SB 1383’s changes to CFRA.

If you have questions about SB 1383 and how it may affect your agency’s operations, LCW attorneys are available to answer your questions.

LCW will soon be conducting a webinar about the impacts of SB 1383.  We will discuss necessary changes to your family and medical care leave acts policy so that you are ready to have those changes implemented when SB 1383 goes into on January 1, 2021.

(SB 1383 amends Section 12945.2 and repeals Section 12945.6 of the Government Code.)