On April 5, 2016, the San Francisco Board of Supervisors passed a new ordinance, which was signed by San Francisco Mayor Ed Lee on April 21, 2016, requiring San Francisco employers to provide paid family leave benefits to employees who have a newborn child, newly adopted child, or new foster child. SF Paid Family Leave is intended to be coordinated with California’s Paid Family Leave benefits. In general, subject to the maximum benefits, employers will be required to pay 45% of the employee’s weekly wage for up to 6 weeks in order to bring the employee to full pay during that period of leave.

Which Employers will be Required to Comply with SF Paid Family Leave?

The new law will be applicable to employers with at least 20 employees, as long as one of those employees works in San Francisco. Significantly, an employee will not be entitled to SF Paid Family Leave simply because that employee lives in San Francisco – the key factor is whether the employer employs at least one employee who works in the City.

The new law does not apply to employees covered by a bona fide collective bargaining agreement (CBA) if the new law’s requirements are expressly waived in clear and unambiguous terms in the CBA or if the CBA was entered into before the law’s effective date.

Which Employees are Entitled to SF Paid Family Leave?

SF Paid Family Leave will be available to all employees who:

  • Have been employed by a covered employer for at least 180 days, including part-time and temporary employees.
  • Work at least eight hours per week (and at least 40% of the employee’s total weekly hours) within San Francisco.
  • Are Eligible to receive California Paid Family Leave benefits to bond with a new child.

When Does the New SF Paid Family Leave Law go into Effect?

The effective date of the new SF Paid Family Leave law depends on the size of the employer:

  • For employers with 50 or more employees, the effective date is January 1, 2017.
  • For employers with 35 or more employees, the effective date is July 1, 2017.
  • For Employers with 20 or more employees, the effective date is January 1, 2018.

These employee counts are based on total employees, regardless of where the employees are located.

How are SF Paid Family Leave Benefits Coordinated with State Paid Family Leave?

The California Paid Family Leave program, which is administered by the Employment Development Department (“EDD”), provides eligible workers with partial wage replacement when taking time off to bond with a newborn, newly adopted child, or new foster child. The program is funded through state disability insurance contributions. Subject to maximums, California Paid Family leave currently provides payment of 55% of the employee’s weekly wages (up to a maximum weekly benefit of $1,129) for up to 6 weeks for the purpose of baby-bonding. An employer’s supplemental contribution obligation under SF Paid Family Leave is proportionally capped based on State Paid Family Leave. Using the 2016 State rates, an employer’s maximum weekly supplemental compensation amount under the new law would be $924 per week. (The calculation of this figure is as follows: the State’s current maximum weekly benefit amount ($1,129) is 55% of $2,053; the remaining 45% of this number, $2,053, is $924.)

Consistent with California Paid Family Leave benefits, an employee can use SF Paid Family Leave at any time within the first 12 months after the birth or placement of the child. It is important to note that on January 1, 2018, the maximum weekly benefit for California Paid Family Leave will be increasing to between 60%-70% of weekly wages, and thereby reducing the portion paid by the employer through SF Paid Family Leave.

How are SF Paid Family Leave Benefits Coordinated with Vacation?

Employees may be required to use up to two weeks of accrued vacation when California Paid Family Leave starts, which would leave the employer with the additional 4 weeks of supplemental payments as part of SF Paid Family Leave.

Can Employers be Reimbursed when an Employee Fails to Return to Work after using SF Paid Family Leave?

Yes. To receive SF Paid Family Leave, an employee must sign a form created by San Francisco’s Office of Labor Standards Enforcement (OLSE), agreeing to reimburse all supplemental compensation received if he or she voluntarily separates from employment within 90 days of returning to work at the end of his or her leave period, if the employer makes a written request for reimbursement.

What are the Notice Obligations?

Covered employers must conspicuously post an OLSE-created notice at each workplace or job site where any covered employee works that informs employees about their SF Paid Family Leave rights. Notices must be posted in English, Spanish, Chinese, and any language spoken by at least five percent of employees at the workplace or site.

What are the Recordkeeping Requirements?

Employers must keep records documenting supplemental compensation paid as part of SF Paid Family leave for three years.

A link to the ordinance can be found at http://sfgov.org/olse/paid-parental-leave-ordinance.