Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

October 21, 2020

New Leave-of-Absence Requirements Impact 6 million California Employers

Posted by Marina Brening

New Leave-of-Absence

Are you a small business with five to 19 employees based in California? It’s likely your employees have requested a leave of absence in the past, leaving you questioning your company’s legal (federal and state) responsibilities. Then upon research, you discovered a company your size is exempt from leave-of-absence requirements such as the Family Medical Leave Act (FMLA), California Family Rights Act (CFRA) and New Parent Leave Act (NPLA). 

Well, this has changed. With the recent passage of Senate Bill 1383 (SB 1383), signed by Governor Gavin Newsom on September 17, an estimated 6 million previously exempt California employers will now be required to grant job-protected leaves beginning January 1, 2021.

SB 1383 expands upon the CFRA.  Previously, CFRA qualifying employers (defined as those with 50 or more employees within a 75-mile radius) were required to provide 12 workweeks of unpaid-job protected leave for qualifying employees (those who served the company for 1,250 hours during the previous 12-month period). Qualified employees could then take these 12 workweeks of leave over any 12-month period (all at once or intermittently) for purposes of bonding with a new child, caring for themselves or caring for a close family member.

Effective January 1, 2021, the CFRA expansion now defines a qualified employer as one with five or more employees. A qualified employer’s eligible employees (same definition as above) will now be entitled to the 12 workweeks of unpaid job-protected leave of absence mentioned above. Note the difference between “job protection” and “paid leave.”  Job protection means that the employee must be granted the same (or equivalent) job as they held prior to the leave. 

Employees may be eligible for up to eight weeks of Paid Family Leave (PFL) state benefits for lost wages during this leave period.  The company is not required to pay the employee during this leave of absence; to do so is at the employer’s discretion.

What to Do Now

Have you discovered that you’re now an eligible employer?  If yes, it might be time to assess current policies for compliance and evaluate operations to reduce risk of hardship.  Remember, the leave is job-protected without a payment requirement.  Further, the employer has the right to request doctor certification for the work excusal.  Other specifics may apply, so please address each situation per the individual’s needs, while falling under the policy’s umbrella. 

Have questions? Reach out to our Human Resources Outsourcing team at [email protected] for help walking through scenario specifics.

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