News & Updates
Just a few days before the January 1, 2017 effective date of the San Francisco Paid Parental Leave Ordinance, the San Francisco Office of Labor Standards Enforcement (“OLSE”) published forms that covered employers are required to use to comply with the ordinance and also issued rules interpreting the ordinance. The forms and rules, which are summarized below, are available on the OLSE website.
Background of Ordinance:
The Paid Parental Leave Ordinance requires covered employers to provide compensation to supplement California Paid Family Leave (PFL) benefits received by eligible San Francisco employees who are on leave to bond with a new baby or child. Employers who employ 50 or more employees became covered by the ordinance on January 1, 2017; employers with 35 or more employees will become covered by the ordinance on July 1, 2017; and employers with 20 or more employees will become covered on January 1, 2018. In determining whether an employer has enough employees to be covered by the ordinance, employers must count all employees, whether full time, part time, seasonal, temporary or contracted through another entity – and regardless of the location in which the employees work. Thus, an employer with just one employee working regularly in San Francisco that also employs 49 other employees across the United States would be covered by the ordinance as of January 1, 2017. The new OLSE rules address how to determine whether an employer is covered by the ordinance if the size of the employer’s workforce fluctuates.
Covered employers must provide supplemental compensation in the amount of the difference between PFL benefits received by an employee and the employee’s regular compensation, up to a maximum weekly amount determined annually. To be eligible for supplemental compensation from a covered employer, an employee must work eight hours per week in San Francisco and have been employed by the employer for 180 days. The new rules give guidance on calculating the 180 days where an employee’s work hours fluctuate or an employee has a break in service.
Newly Published Forms Covered Employers Must Use:
- Paid Parental Leave Form and Instructions: In order to be eligible for supplemental compensation, employees must provide their employer the information required on this form. The form requires employees: (1) to select a method to provide the employer information on PFL benefits they receive; (2) to agree to repay supplemental compensation received from the employer if they resign from employment within 90 days of the end of their leave; and (3) to provide the employer information on income from other employers since, where an employee has multiple employers, each employer is responsible only for a proportionate share of supplemental compensation.
An employer must provide the Paid Parental Leave Form and Instructions to an employee within a reasonable time after the employee informs the employer that s/he is expecting a newborn or the placement of an adopted or foster child or sooner if the employee inquires about paid parental leave. We recommend that employers covered by the federal Family and Medical Leave Act (“FMLA”) provide employees with a copy of this form at the time they provide employees the “Notice of Rights and Responsibilities” required by the FMLA.
Note: Employers are required to provide the Paid Parental Leave Form in English and in any languages spoken by more than 5% of the employer’s workforce. The OLSE is required to make the form available in Spanish, Chinese, and Filipino/Tagalog but has not yet done so.
- Paid Parental Leave Notice: Covered employers must post this notice in a conspicuous place in any workplace or job site where employees covered by the ordinance work.
- Instructions for Calculating Supplemental Compensation for an Employee. The OLSE has published instructions to calculate supplemental compensation in four different situations, specifying the calculation for (a) employees with either a single employer or multiple employers, and for each, (b) employees who do and do not receive tips as part of their compensation.
What Should Covered Employers Do?
- Post the new OLSE notice
- Update leave forms to include information on the ordinance
- Update leave policies in employee handbooks to incorporate the requirements of the ordinance
- Distribute the Paid Parental Leave Form to employees who may be taking leave to bond with new babies or children
We are proud to announce that our colleague, John Levin, will be honored by the Stanford University School of Medicine as a Dean’s Medal Recipient on October 24, 2016. The Dean’s Medal is one of the School of Medicine’s highest honors. It is presented to individuals whose scientific, medical, humanitarian, or other contributions have significantly advanced the mission of Stanford Medicine. John is one of three recipients of the Dean’s Medal for 2016.
John is the Chair of Folger Levin and his practice focuses on transactions and strategic advice for businesses, high net worth individuals, and non-profit organizations. John received his Masters and J.D. from Stanford University, and his commitment to the University and its School of Medicine is longstanding. He currently serves as the Chair of the Board of Directors of Stanford Health Care, and is also a member of the Board of Directors of the Lucile Packard Children’s Hospital. He has previously served as the Vice-Chair of the Stanford University Board of Trustees. Together with his wife, Terry, he established the John and Terry Levin Center for Public Service and Public Interest Law at Stanford Law School. In 2015, John received Stanford’s Golden Spike Award, the University’s highest honor for volunteer service.
Folger Levin is proud to serve as a sponsor of the Legal Aid Society’s Employment Law Center’s 100th Anniversary Gala. This noteworthy event will take place on Thursday, September 22, 2016 at the Hyatt Regency San Francisco to celebrate LAS-ELC’s 100th anniversary, with special guest, George Takei, who has been a staunch advocate and beloved spokesperson for human rights in many areas, including Japanese internment during World War II and LGBT rights. LAS-ELC advances justice and economic opportunity for low-income people and their families at work, in school, and in the community, by advocating for policy change, providing limited representation and conducting impact litigation, offering information about workers’ legal rights online, in person and in workshops, and serving thousands of clients each year, for free, in clinics across California. Learn more about this organization here: https://las-elc.org/.
The California Court of Appeals has issued an opinion in favor of Folger Levin’s client in an important case involving the rights of survivors of domestic violence. The Court of Appeal held that the trial court erred in denying a request for renewal of a restraining order, finding that the trial court decision was based on an erroneous understanding of the term “abuse,” as used in the Domestic Violence Prevention Act. Critically, the Court of Appeal held that, in considering a request for renewal of a restraining order to protect a parent, trial courts should consider evidence of abuse of the parent’s child, as such abuse can make the parent fear for the safety of herself and her children. The opinion was certified for publication on July 11, 2016.
Folger Levin represented the appellant on a pro bono basis, serving as co-counsel with attorneys from Bay Area Legal Aid and Family Violence Appellate Project. A copy of the opinion can be found here.
U.S. Department of Labor Issues New Regulations on Overtime that Impacts Classification of Exempt Employees
Summary of the New Overtime Rules
On May 18, 2016, the U.S. Department of Labor released its Final Rule regarding revised overtime regulations, which rule goes into effect December 1, 2016. The key provisions of the Final Rule focus on updating the salary and compensation requirements for Executive, Administrative, and Professional workers to be exempt under federal law. Those key provisions include:
- An increase to the salary requirement for Executive, Administrative, and Professional exempt employee classifications. The salary requirement is increased to $47,476 per year ($913 per week), from the current salary requirement of $23,660 ($455 per week). Salaries for exempt employees thus must be raised to this amount by December 1, 2016, or the employee otherwise must be re-classified as non-exempt.
- Employers will be permitted to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the new minimum salary level, as long as those payments are made on at least a quarterly basis.
- The total annual compensation for highly compensated employees (HCE) (not permissible under California law) increases to $134,004 (from the current $100,000 per year).
- A mechanism for automatically updating the salary and compensation levels every three years, with the first automatic increase to occur in 2020.
The original version of the rule also proposed changing the duties test for each FLSA exemption; however, the Final Rule does not contain any changes to the duties test for the FLSA exemptions.
What’s Important for California Employers
Between state and federal wage-and-hour laws, California employers must follow whichever is more favorable to an employee. Usually, California wage-and-hour laws, including the Wage Orders, are more generous to employees than federal law. This has been true with respect to the Executive, Administrative, and Professional exemptions. With the new federal overtime regulations, however, California employers now must comply with the more beneficial salary requirements under federal law (at least as of 12/1/16). Specifically, California employers will be impacted as follows:
- Salary: The new U.S. DOL salary threshold of $47,476 exceeds the California threshold for exempt employees of two times state minimum wage, or $41,600 as of 1/1/16. This means that California employers will need to match the federal salary test to maintain exempt classifications of employees. California employers must either raise the salaries of their exempt employees to meet the new federal requirements, or alternatively, re-classify them as non-exempt. California employers will also need to stay informed as to whether California or federal law provides the higher salary after December 1, 2016, and pay exempt employees in accordance with whichever threshold is higher.
- Job Duties: The new U.S. DOL rules do not affect the California requirement that exempt employees must spend over 50% of their working time performing exempt work.
- Highly Compensated Employees: California employers still may not utilize the federal HCE exemption because no such exemption exists under California law.
The Labor and Employment attorneys at Folger Levin are here to answer any of your questions about the new U.S. DOL Overtime rules and how they might affect your business. Please feel free to reach out to one of our attorneys.