Small employers in California – those with only five employees or more – will be obligated to provide eligible employees up to 12 weeks of family care and medical leave each 12 months under a bill Governor Gavin Newsom signed into law this week. Also for the first time, employers will be required to grant family leave to employees to care for their ill grandparent, grandchild or sibling. These new requirements and other changes to the California Family Rights Act (CFRA) become effective January 1, 2021.

The bill Governor Newsom signed, SB 1383, on Thursday, September 17, amends CFRA. CFRA requires employers to provide eligible employees up to 12 workweeks of unpaid leave each 12-month period. The leave can be taken because of the employee’s own serious health condition, to care for specified family members facing medical challenges or to care for a child. In order to be eligible for the leave, the individual must have been employed by the employer for at least 12 months and have worked at least 1,250 hours in the 12 months before commencing leave.

To date, CFRA largely mirrored the federal Family Medical Leave Act (FMLA), including with respect to the employers covered, the criteria for employees to be eligible for leave and the amount of job-protected leave provided. Because of the amendments made by SB 1383, though, CFRA’s footprint grows beyond that of the FMLA. The California law is now set to reach countless small employers not subject to the FMLA and provide leave in circumstances where the FMLA does not.

The changes made to CFRA by SB 1383 are historic in magnitude. They include the following:

Small California Employers will now be Subject to CFRA, though not the FMLA

Prior to the Governor signing SB 1383, only private sector employers of 50 or more employees and state and local government agencies were subject to CFRA. As of January 1, 2021, however, CFRA will encompass countless employers of only five employees or more across the state. The many small employers soon to be subject to CFRA will learn that the law’s requirements are intricate and subject to tight deadlines. The risks to small employers — particularly those who do not invest the time needed to become familiar with the Act’s requirements — are significant.

Despite CFRA’s expanded reach, the FMLA will continue to encompass private employers only if they employ 50 or more employees. Because of the Governor’s approval of SB 1383, many smaller California employers will become subject to CFRA, but remain beyond the reach of the FMLA.

CFRA Leave for Employees to Care for an Ill Grandparent, Grandchild or Sibling

Because of SB 1383, an eligible employee for the first time will be entitled to CFRA leave to care for their ill grandparent, grandchild or sibling. SB 1383 also expressly adds domestic partner as a family member whose illness entitles eligible employees to CFRA leave. Prior to SB 1383, the ill family members for whom an employee could take CFRA leave were the employee’s parent, spouse or child.

CFRA also provides leave for the birth of an employee’s child or placement of a child with an employee in connection with adoption or foster care. SB 1383 adds the “child of a domestic partner” to CFRA’s definition of “child.” By doing so, SB 1383 adds a new category of “child” with respect to whom an employee may be entitled to leave, either to care for or for bonding.

Thus, as of January 1, California employers will be required to grant CFRA leave for the care of employees’ family members not previously encompassed by CFRA.

The FMLA, in contrast, does not require employers to grant leave to an employee to care for a grandparent, grandchild or sibling. As a consequence, upon SB 1383 becoming effective, California employers may be confronted with employees requesting CFRA leave to care for, say, a grandparent, and later in the same 12-month period requesting FMLA leave to care for a parent or spouse. In that event, a question will arise as to whether the employee is entitled to a total of 24 weeks of leave in one 12-month period, namely, 12 weeks under CFRA and an additional 12 weeks under the FMLA.

The Key Employee Provision under CFRA is Removed

Prior to SB 1383, CFRA authorized employers to deny reinstatement to “key employees” seeking to return from CFRA leave. In order to constitute a key employee, the person must be a highly paid, salaried employee. Secondly, the employer must be able to demonstrate that refusing to reinstate the employee in the same or a comparable position is necessary to prevent “substantial and grievous economic injury” to the employer. In other words, the employer must be able to prove that it cannot wait for the employee on leave to return, that because of the importance of the role, the employer must replace the employee on leave with a new employee in the position.

Significantly, SB 1383 deletes the key employee provision from CFRA, taking from employers as of January 1, 2021 the ability to fill the positions of critical, high-ranking employees during their leave and declining to reinstate them to their prior position when they wish to return.

The FMLA retains a key employee provision that is similar to CFRA’s current, but short-lived, key employee provision.

California’s New Parent Leave Act is Repealed

The New Parent Leave Act requires subject employers to provide eligible employees with up to 12 weeks of unpaid leave to bond with a newborn child, adopted child or foster child. Employers of between 20 and 49 employees are subject to the Act. The Act became effective less than three years ago on January 1, 2018.

The purpose of the Act was to make such baby-bonding leave available to employees who could not take leave under CFRA because they worked for employers with less than 50 employees, the coverage threshold at the time for CFRA.

In making employers of only five or more employees subject to CFRA, SB 1383 renders the New Parent Leave Act redundant. For that reason, SB 1383 expressly repeals the New Parent Leave Act effective January 1, 2021.

Action Items

Employers who will be subject to CFRA as of January 1, 2021 should prepare to comply. Actions to consider taking include:

  1. Small employers who will be subject to CFRA for the first time as of January should familiarize themselves with the law’s requirements well in advance of the January 1, 2021 effective date.
  2. All employers encompassed by CFRA as amended should update their CFRA policies and eliminate any policy intended to comply with the New Parent Leave Act. Employers should circulate updated policies to employees no later than January 1, 2021.
  3. Employers should train human resources personnel and any supervisory employees who may receive requests for CFRA leave or questions from employees.
  4. Employers should review and likely update the form Notice of Eligibility and Rights and Responsibilities and form Designation Notice they have been using to ensure compliance with CFRA, as amended.

The Governor’s signing of SB 1383 subjects an untold number of small employers throughout California to the requirements of CFRA and further complicates for employers big and small the already intricate, risky landscape of leave law. Employers should begin to prepare early in order to avoid costly mistakes.