The City and County of San Francisco amended its Paid Parental Leave Ordinance to account for recent state law changes and to clarify employer requirements to provide supplemental compensation to employees who receive State Paid Family Leave for purposes of bonding with a new child.  

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San Francisco Amends its Paid Parental Leave Ordinance (PPLO)

Dec 19, 2016

Background on the Ordinance:
The City and County of San Francisco amended its PPLO to account for recent state law changes and to clarify employer requirements to provide supplemental compensation to employees who receive State Paid Family Leave for purposes of bonding with a new child.

The effective date of the PPLO is phased in based on employer size (regardless of location):

  • January 1, 2017, for employers with 50 or more employees
  • July 1, 2017, for employers with 35 or more employees
  • January 1, 2018, for employers with 20 or more employees

On a practical level, the amendment is effective on the same dates as the PPLO.

Impact on Employers:
The amendment, signed on September 14, 2016, mirrors recent changes to the state’s California Paid Family Leave insurance program and clarifies an employer’s obligations related to providing supplemental compensation. The following discussion is a high level overview.

California Paid Family Leave (PFL): 
This state program provides six (6) weeks of partial wage replacement to eligible employees for caring for a seriously ill family member or to bond with a new child. PFL is available to most private sector employees who pay into the State Disability Insurance (SDI) fund either through payroll deductions or voluntarily.

Currently the weekly benefit amount is 55% of the employee’s weekly wages, capped at a maximum weekly amount. Effective January 1, 2018, the wage replacement rate will be 60% for high-income earners and 70% for low-income earners .

San Francisco Paid Parental Leave (PPLO):
Signed in April, 2016, this ordinance generally requires employers to provide supplemental compensation to employees who are receiving state PFL for purposes of bonding with a new child, so that the total of state and San Francisco leave compensation equals the employee’s normal weekly gross wages.

The amendment, signed on September 14, 2016, mirrors recent changes to the state’s California Paid Family Leave insurance program and clarifies an employer’s obligations related to providing supplemental compensation. The following discussion is a high level overview.

Employees are eligible to receive supplemental compensation if they work for a covered employer and:

  1. began employment with the employer at least 180 days prior to the start of the leave period
  2. perform as least eight (8) hours of work per week for the employer within the city boundaries
  3. at least 40% the total weekly hours worked for the employer are within the city boundaries
  4. are eligible to receive paid family leave from the State of California under PFL for the purpose of bonding with a new child

The Amendment:
The amendment lowers the percentage of weekly wages the employer must pay as compensation under the PPLO, to correspond with the increases in the PFL so that the total equals 100%.

The amendment also clarifies that an employer’s obligation to provide PPL supplemental compensation will not be triggered until the employer has the state PFL weekly benefit information that the covered employee must provide or authorize the state to disclose. For the employer to calculate the supplemental compensation, it must know the:

  1. employee’s normal gross weekly earnings
  2. percentage rate of the weekly benefit provided by the state
  3. dollar amount received from the state

Other PPLO requirements:

  • City or other government entities are not covered employers
  • To be eligible to receive supplemental compensation a covered employee must agree to allow, in the employer’s discretion, to apply up to two weeks of unused vacation leave to help meet the employer’s obligation
  • Special language is provided related to requirements when an employee is covered by a collective bargaining agreement
  • Anti-retaliation provisions are explained in detail
  • Employers must post a notice in the workplace informing employees of their rights in all languages spoken by more than 5% of the San Francisco workforce
  • Employers must retain related records for a period of three years
  • Rules are provided for apportioning PPL compensation among employers when an affected employee works for more than one employer

For more information, please see:
San Francisco Paid Parental Leave Ordinance

Technical amendment to the PPLO:
https://sfgov.legistar.com/View.ashx?M=F&ID=4686751&GUID=81EBAD4D-FA26-436F-860B-6896090FB104