As On April 5, 2016, the San Francisco Board of Supervisors unanimously approved the Paid Parental Leave Ordinance (Ordinance), making San Francisco the first city in the nation to require employers to provide employees with fully-paid parental leave. If enacted, which is expected, the Ordinance will become operative on January 1, 2017.

As of January 1, 2017, the Ordinance will apply to all employers with 50 or more employees, regardless of location. As of July 1, 2017, covered employers will include all employers with 20 or more employees, regardless of location.

The Ordinance was enacted as a supplement to the California Paid Family Leave, which permits employees who contribute to the California State Disability Insurance fund to take up to six weeks of leave during a one-year period, with 55 percent partial wage replacement. Employers are required to pay employees supplemental compensation – the remaining 45 percent of their lost wages – during the covered leave period. Employers may require employees to first use accrued but unused vacation leave to meet these pay obligations, but the use of vacation leave for this purpose is limited to two weeks.

The Ordinance covers all employees, including part-time and temporary employees, who (i) started working for a covered employer at least 90 days prior to the start of the leave period; (ii) perform at least eight hours of work per week for that employer within the city limits; (iii) work at least 40 percent of his or her total weekly hours within the city limits; and (iv) are eligible to receive paid family leave compensation under the California Paid Family Leave law for baby bonding purposes. The Ordinance also applies to employees covered by a collective bargaining agreement unless either (i) the agreement expressly waives the Ordinance in clear and unambiguous terms, or (ii) the agreement was entered into before the Ordinance’s effective date.

Additionally, the Ordinance requires employers to provide employees with notice of their right to paid parental leave and to post such notice in conspicuous workplace locations in English, Spanish, Chinese, and any language spoken by at least five percent of the workforce. In addition, employers are required to retain records documenting supplemental compensation paid to employees for a period of three years. The Ordinance also prohibits employers from discriminating or retaliating against an employee who uses or attempts to use paid parental leave. Any violation of the Ordinance may result in civil and administrative penalties, and remedies to the aggrieved employee, including lost wages and benefits, injunctive relief, liquidated damages, and attorneys’ fees and costs.

The Ordinance becomes effective 30 days after signature by the San Francisco Mayor.

The full text of the Ordinance can be found here. Employers are encouraged to review the Ordinance, as well as their policies and procedures to ensure compliance with the Ordinance prior to its effective date.