New Job Killer Bill Would Devastate Small Employers in California

A bill requiring that all employers provide 12 weeks of protected family leave and includes a private right of action has been labeled a job killer by the California Chamber of Commerce.

The bill, SB 1383 (Jackson; D-Santa Barbara) significantly expands the California Family Rights Act (CFRA), which currently only applies to larger employers, to any employer with only one employee and requires these small employers to provide each eligible employee with 12 weeks of protected leave from work.

“Now is not the time to place costly burdens on employers who are struggling to reopen and rebuild,” said Jennifer Barrera, CalChamber executive vice president. “To be clear, the bill is not limited in scope to only address COVID-19. It would disproportionately impact the smallest of employers in California at a time when they can least afford it. SB 1383 will put California’s small businesses out of business.”

Threat of Litigation Against Small Employers

The 12 weeks of leave mandated under SB 1383 is enforced through a private right of action that includes compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees. This provision would particularly hit small businesses who do not have a dedicated human resources team or in-house counsel to advise them on how to properly administer this leave.

The leave is not just as easy as giving an employee 12 weeks off and returning them to a workforce.  The leave can be taken in small increments of one to two hours, placing a huge administrative burden on small employers to track the leave and then provide coverage while the employee is out. Any employee who believes an employer did not properly administer the leave, interfered with the leave, or denied the leave, can file for litigation.

A 2015 study by insurance provider Hiscox regarding the cost of employee lawsuits under the Fair Employment and Housing Act (FEHA) estimated that the cost for a small to mid-size employer to defend and settle a single plaintiff discrimination claim was approximately $125,000.   Small employers cannot afford this additional cost.

Other Leaves Already in Place

This 12-week leave of absence on small employers cannot be viewed in isolation, but must be considered with regard to all of the other California-specific leaves employers must juggle, including the following: Pregnancy Disability Leave (up to four months); disability leave under the FEHA (no specific amount of time – but not unlimited either. The leave provided must be considered as a “reasonable” accommodation for the disability); workers’ compensation injury (amount of leave based upon doctor’s recommendation); California Paid Sick Leave (minimum of 3 days); Paid Leave for Organ/Bone Marrow Donation Leave (30 days/year); Jury Duty Leave (unlimited); Victim of Crime or Witness Leave (unlimited); Victim of Domestic Violence/Sexual Assault (unlimited); Emergency Duty of volunteer firefighters, reserve peace officers, or emergency rescue personnel (unlimited); Civil Air Patrol Leave (10 days/year); School Suspension Leave (unlimited); School Activities Leave (40 hours/year).

SB 1383 Will Impact Larger Employers As Well

CFRA and FMLA leave normally run together, so the total time taken is a maximum of three months.  SB 1383, however, greatly expands the definition of “family member” to include a child of a domestic partner, grandparent, grandchild, sibling, or domestic partner. Additionally, the bill removes the requirement that a “child” be under the age of 18 or a dependent adult child. Because a domestic partner, a child of a domestic partner, a grandparent, a grandchild, or a sibling are not family members covered under FMLA, these leaves will not coincide.

Accordingly, an employee can take leave under SB 1383 for three months to care for a domestic partner, child of a domestic partner, grandparent, grandchild, or sibling, return to work, and then take another three months off under FMLA for the employee’s own medical condition or the medical condition of a spouse, child or parent or for the birth, adoption or foster care placement of a child.

3 months – CFRA leave for a domestic partner, child of a domestic partner, grandparent, grandchild, or sibling;

PLUS (+)

3 months – FMLA leave for his or her own medical condition or the medical condition of his or her spouse, child or parent, or for the birth, adoption or foster care placement of a child.

Thus, SB 1383 creates six months of job-protected leave for larger employers covered by FMLA.

Parents Also Impacted

Given the broad definition of “employer” in SB 1383 to include any employer that has one or more employees, SB 1383 captures working families who have in-home childcare providers or senior care.

Many working families are choosing to keep their children home while they return to work in order to minimize any risk of COVID-19 infection. SB 1383 would impose a 12-week leave of absence on parents who utilize this as an option and threaten them with litigation if they make any mistake in its implementation.

Working parents are not the same as a large employer and do not have the capacity or resources to implement this type of leave or respond to a lawsuit.

Staff Contact: Jennifer Barrera

Jennifer Barrera took over as president and chief executive officer of the California Chamber of Commerce on October 1, 2021. Previously, she oversaw the development and implementation of policy and strategy as executive vice president and represented the CalChamber on legal reform issues. She led CalChamber advocacy on labor and employment and taxation from September 2010 through the end of 2017. As senior policy advocate in 2017, she worked with the executive vice president in developing policy strategy. Before joining the CalChamber, she worked at a statewide law firm that specializes in labor/employment defense. Barrera earned a B.A. in English from California State University, Bakersfield, and a J.D. with high honors from California Western School of Law. See full bio.