San Francisco’s Paid Parental Leave Ordinance (PPLO) became effective on January 1, 2017, for employers with 50 or more employees. Effective July 1, 2017, the PPLO also applies to employers with 35 or more employees and, on January 1, 2018, to employers with 20 or more employees.

While the California Paid Family Leave (PFL) program currently pays employees 55 percent of their wages, up to a certain weekly amount, for a period of six weeks, the PPLO requires employers to pay the remaining 45 percent of for six weeks for the purpose of bonding with a new child.

Additional Information from the OLSE

On December 23, 2016, the San Francisco Office of Labor Standards Enforcement (OLSE) adopted final rules implementing the ordinance. The OLSE also published supplemental information on the ordinance, including:

  • a poster entitled “2017 Notice of Rights for New Parents,” that employers must post
  • a form that employees must complete and provide to their employer in order to receive Paid Parental Leave;
  • a step-by-step calculation worksheet that an employer can use to calculate the amount of Supplemental Compensation it must pay to an employee; and
  • a list of frequently asked questions about the paid parental leave ordinance.

San Francisco’s Ordinance and the State PFL Program

As of January 1, 2017, California’s Employment Development Department (EDD) increased the maximum weekly benefit available to employees under the state PFL program to $1,173 from $1,129. As a result, San Francisco’s supplemental benefit increased from a maximum weekly amount of $924 to $960.

In addition, effective January 1, 2018, the state PFL program will increase its wage replacement percentage to 60 percent for most employees (and 70 percent for employees who earn 33 percent or less of the state’s average weekly wage).

Key Takeaways

Employers should note that:

  • Despite its name, the San Francisco Paid Parental Leave ordinance is not a protected leave statute. It does not provide employees with additional protected leave. Instead, the ordinance is a wage replacement law.
  • Employees must receive state PFL benefits in order to receive PPLO supplemental compensation.
  • Employers that issue or update their employee handbooks after the ordinance’s effective date to include a section about paid parental leave.
  • Union employees are not entitled to paid parental leave if:
    • the union’s collective bargaining agreement (CBA) expressly waives the ordinance’s protections; or
    • the parties entered into the CBA before the ordinance’s effective date.