As national discourse around women’s pay equality came to the forefront in 2017, Governor Brown signed several bills in an effort to create a more egalitarian workplace. One such measure came in the form of Senate Bill 63, otherwise known as the New Parental Leave Act, which became effective January 1, 2018. Under prior law, employers with 50 or more employees were required to provide job-protected parental leave. Now employers with at least 20 employees within 75 miles must allow employees with (1) more than 12 months of service with the employer and (2) that have worked at least 1,250 hours with the employer during the previous 12-month period, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.

The bill also requires employers to maintain and pay for coverage under a group health plan for an employee who takes parental leave. Importantly, the bill requires employers to provide the employee with an affirmative guarantee of employment in the same or a comparable position upon the employee’s return. If the employer does not provide an affirmative guarantee, then the employer is deemed to have denied employment upon termination of the leave, in violation of this law.

In 2016, Governor Jerry Brown vetoed a similar bill, which proposed six weeks of protected leave, out of concern for the hardship such leave would place on small businesses. In his veto message, Governor Brown stated mediation between the employer and employee may serve as a viable avenue to mitigate potential liability for small business owners.

In response, SB 63 creates a two-year mediation pilot program in which the Department of Fair Employment and Housing (DFEH) would mediate disputes arising from the new law prior to litigation. Pursuant to this program, an employer may request all parties to participate in mediation within 60 days of receipt of a right-to-sue notice. If the employer requests mediation, the employee is not to pursue litigation until mediation is complete. Mediation is considered complete if either party notifies the DFEH’s Mediation Division Program and all other parties that it has either elected not to participate in mediation or plans to withdraw from mediation. Mediation is also considered complete if the DFEH notifies the parties that it believes further mediation would be fruitless. It is important to note that the employee may refuse to participate in mediation entirely and file a civil action against the employer, exposing the employer to liability and litigation costs.

The Act does not apply to employees who are covered by both the federal Family and Medical Leave Act (FMLA) and the Moore-Brown-Roberti Family Rights Act (the California Family Rights Act or CFRA), both of which already provide 12 weeks of unpaid, protected leave for baby bonding purposes to eligible employees of employers with at least 50 employees.

We recommend employers to determine whether they are subject to the New Parental Leave Act, and update personnel rules and handbooks accordingly. Moreover, the development of formal leave procedures and forms may provide for consistent application in each instance.