How the Expanded California Family Rights Act Is Going To Impact Small Businesses
If you are a small business, it is time to brush up on your knowledge of the California Family Rights Act. In a historic move, Governor Newsom approved an expansion of California's Family Rights Act (CFRA) by signing SB 1383 on September 17th, 2020. The changes are effective from January 1st, 2021. Before then, it is important to understand how this will impact your business if you are operating in California.
What are the changes to the California Family Rights Act?
The expansion of CFRA requires Californian businesses with five employees or more to provide eligible workers up to 12 weeks of family care and medical leave every year. We have provided a breakdown of the major historical changes to the CFRA below.
1. Small businesses are now subject to CFRA
Small businesses (with 5+ employees) are now required to provide their workers 12 weeks of unpaid protected job leave. Previously, CFRA only applied to private sector businesses with over 50 employees. Therefore, small businesses should become familiar with the law’s new requirements which is subject to tight deadlines.
2. Employees can take CFRA Leave to care for specific family members
The original CFRA enabled workers to take job-protected leave if they had a serious health condition, to care for a parent, spouse, or child, or if they gave birth to or adopted/fostered a child.
SB 1383 extends CRFA leave to workers who have to take time off to care for their grandparent, grandchild, sibling, or domestic partner if they become ill.
3. Employers are unable to decline to reinstate certain employees after they take CFRA leave
The new bill removes the 'key employee provision' from the CFRA. This means that if a "key employee" takes CFRA, employers are not allowed to decline reinstatement when employee seeks to return. Previously, employers were allowed to refuse to reinstate an employee after they took CFRA leave.
The only exemption to this is if the worker's role is highly paid and significant to the business. If the employer can prove that they are unable to wait for them to return due to necessity of their position within the business, they can replace them with a new worker.
4. California's New Parent Leave Act is repealed
The New Parent Leave Act requires employers with more than 20 workers to provide those who recently gave birth up to 12 weeks of unpaid leave to bond with their newborn baby.
The signing of SB 1383 means employers with 5 or more employees now must grant CFRA, subsequently, this repeals the New Parent Leave Act which previously guaranteed unpaid leave to workers who weren't eligible for the CFRA due to the size of their employer. This is effective from January 1st, 2021.
Who is eligible for CFRA Leave?
A worker is eligible for CFRA if they have been employed by their company for more than 12 months and have worked at least 1,250 hours during that period.
What do employers need to action before January 1st 2021?
As the CFRA will be effective from January 1st, 2021, employers who are eligible to provide CFRA leave should start preparing in advance in order to remain compliant and avoid potential costly mistakes. Some suggestions to prepare your business for the changes to CFRA include:
Revise the new law requirements – Many small companies who were previously not subject to CFRA are revising and reviewing the new requirements before they become effective on January 1st, 2021 to ensure they are compliant.
Update CFRA policies - Businesses in California have been recommended to update and circulate policies to include the extended eligibility requirements before January 1st, 2021, and make sure any policy complying with the New Parent Leave Act is removed.
Train HR workers who may receive questions regarding CFRA leave on the changes
Review the Notice of Eligibility and Rights and Responsibilities and form Designation Notice
Overall, the new expansion of CFRA not only impacts numerous small businesses in California, it also requires large businesses to update their policies. Employers should educate themselves on the requirements that the expansion of CFRA brings in order to prepare and remain compliant from January 1st, 2021.
We keep up with these rapid employment law changes for our clients, ensuring they remain compliant when operating within the US. If you are interested in learning more about what we do for our clients, get in touch!
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.