Pending California Leave Laws Cause New Burdens

Even in the face of the coronavirus pandemic and a historic economic shock, the California Legislature is considering legislation that would expand employee leave protections, thus increase the cost on employers of maintaining workers on the payroll.

            Our friends at Barsamian & Moody, identified four bills pending that will expand or create a new leave of absence requirements on employers with at least a single (1) employee:

• AB 3216 (Kalra) – 12 weeks of leave under CFRA a year, 4 months of pregnancy disability leave, 80 hours of emergency leave/year, and at least 3 days of paid sick leave/year
• AB 2999 (Low) – 10 days of bereavement leave per year
• SB 1383 (Jackson) – unlimited time off from work for a school closure or day care closure
• AB 2992 (Weber) – protected time off for an employee who is a victim of a crime or a family member who is a victim of a crime

           (NOTE: links to pending legislation were active as of this article but may expire due to legislative outcome)

Supporters claim that the leaves of absence are generally “unpaid” (except for sick leave and the new emergency leave) and therefore should not be a burden on employers. But just because a leave is “unpaid,” does not mean there is not a cost.

Usually left out of a cost discussion is related employer responsibilities that impact costs and productivity. For example, take method of leave enforcement. To avoid violations and penalties, employers take on a huge responsibility meeting leave requirements to stay compliant. Depending on the number of employees out on a leave, a full time position could be justified. Thus creating a catch 22 for smaller employers or modest HR departments. And, these proposed leaves cannot be viewed in isolation, but must be considered as a part of the existing leaves California already offers.

An unpaid leave of absence has a significant burden and cost on an employer. Each leave is “protected,” meaning an employer must return the employee to the same position the employee had before going out on leave. Under AB 3216, this means holding a position open for three months or more. While an employer can temporarily fill the position with a new employee, that replacement usually comes with challenges.

• A replacement employee knows the position is short term, and therefore, can negotiate a premium wage,
• Short term employees can be less dedicated to the position
• They often leave for a better opportunity at a moment’s notice.

Not to mention employee onboarding and ramp up. Many jobs require extensive amount of time and money to train a new employee, adding another cost. Other employers might shift the work to other existing employees, which often leads to overtime pay and lead to morale and burn out. And, most of the leave of absences require employers to maintain health benefits while the employee is out.

Each of the leaves of absence also comes with a threat of costly litigation if there is any dispute regarding the leave. For example, AB 2999 includes two separate options for litigation:

(1) an individual private right of action with costs and attorneys only for the employee; or a

(2) a representative action under Labor Code Private Attorney General Act (PAGA) with statutory penalties, damages, and attorney’s fees; or

(3) Labor Commissioner enforcement.

AB 3216 also includes a private right of action with lost wages, punitive damages, and attorney’s fees for any alleged violation.

What This Means for Employers:

            Even though these leaves of absence are not required to be paid, administration and properly doling out these leaves could leave employers in the lurch searching for ways to continue operations while employees are on leave. This is a potentially huge burden, especially for smaller employers. Each one must be managed in conjunction with the many existing leaves already available to California employees.

OnePoint HCM Leave Manager simplifies leave case management by seamlessly accessing, time and labor, HR and payroll data to manage the interplay of leaves and streamline tracking of all requirements under federal and state laws.