Briefing Regarding Revisions to the California Family Rights Act. Presented by: Julie Capell Annette Salazar-Shreibati June 17, 2015

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1 Briefing Regarding Revisions to the California Family Rights Act Presented by: Julie Capell Annette Salazar-Shreibati June 17, 2015

2 Today s elunch Presenters Julie Capell Partner Los Angeles jcapell@winston.com Annette Salazar-Shreibati Associate Los Angeles ashreibati@winston.com

3 Overview of Today s Topics An examination of the California Family Rights Act ( CFRA ) changes effective July 1, 2015: Incorporate March 6, 2013 FMLA regulations to the extent they align with the scope of Government Code section Greatly expand which employers and employees are covered under CFRA Increase employer s obligations vis-à-vis communications with employees regarding their medical leave Add CFRA penalty provisions for employees who do not comply with CFRA regulations 3

4 Changes to CFRA Definitions Covered employer [Aligns with FMLA] Adds successors in interest of covered employers who directly employ 50 or more persons within 75 miles of worksite Number of employees includes employees on paid or unpaid leave, disciplinary suspension, or other work absence so long as employer reasonably expects employee will later return to active employment Joint employer [Aligns with FMLA] Where two or more businesses exercise some control over work or working conditions of employee, businesses may be joint employers under CFRA Eligible employee [Aligns with FMLA] At least 12 months (52 weeks) and 1,250 hours during 12-month period before leave Employment periods prior to break in service of 7 years or more need not be counted in determining 12-month requirement unless caused by military service or written agreement Employees who have not met 12-month requirement at start of leave may become eligible during leave 4

5 Changes to CFRA Definitions Worksite [Aligns with FMLA] Can refer to single location or group of contiguous locations For employees with no fixed worksite, worksite is considered site to which they are assigned as home base, from which their work is assigned, or to which they report When employee is jointly employed, employee s worksite is primary employer s office from which employer is assigned or reports, unless employee physically worked for at least one year at facility of secondary employer, in which case employee s worksite is that of secondary employer Key employee [Aligns with FMLA] Paid on salary basis and among highest paid 10% of employees within 75 miles of worksite Reason of the birth of a child [Aligns with FMLA] Includes, but is not limited to, bonding with child after birth 5

6 Changes to CFRA Definitions Serious health condition [Aligns with FMLA] Includes treatment for substance abuse Inpatient care Includes not only overnight stays at hospital, but also anticipated overnight stays (even if stay does not occur) [FMLA: employee must stay overnight] Incapacity [Aligns with FMLA] Means inability to work, attend school, or perform other regular daily activities due to serious health condition, its treatment, or recovery that it requires Spouse Includes registered domestic partners and same-sex marriage partners [FMLA: domestic partners not included. Whether the same-sex marriage will be recognized under FMLA depends on the state where the place of celebration took place, not where the employee currently resides.] 6

7 Changes to Employers Posting and Written Notice Obligations Post notice explaining CFRA provisions and providing information concerning the procedures for filing complaints in conspicuous places [Aligns with FMLA] Must be readily visible by employees and applicants [Aligns with FMLA] Must be large enough to be easily read and must contain fully legible text [Aligns with FMLA] Electronic posting is sufficient to meet posting requirement so long as it otherwise meets requirements [Aligns with FMLA] If workforce has 10% or more employees who speak another language as their spoken language, employer must provide CFRA notice in that language [FMLA: must translate when different language is spoken by significant portion of workers not literate in English] For language added to written posting, see

8 Expansion of Key Employee Provision Key Employee Employee who is paid on a salary basis and is amongst highest paid 10% of employees who are employed within 75 miles of employee s worksite at time of leave request [Aligns with FMLA] Highest Paid 10% Calculation Determined by comparing the year-to-date wages of employer s employees within 75 miles of worksite where requesting employee is employed at the time of leave request, divided by number of weeks worked (including weeks in which paid leave was taken) [Aligns with FMLA] 8

9 Expansion of Key Employee Provision Notice to Key Employee of Denial of Reinstatement [Aligns with FMLA] Notice must be given in writing at the time the employee gives notice of the need for CFRA leave (or when CFRA leave commences, if earlier) that he/she is a key employee and potential consequences with respect to reinstatement and maintenance of health benefits if employer should determine that reinstatement will result in substantial and grievous economic injury to its operations Or as soon as practicable if there is a need to determine whether the employee is a key employee Failure to provide notice will result in employer losing the right to deny reinstatement After good-faith determination that substantial and grievous economic injury to its operations will result if it reinstates key employee, employer must notify employee in writing that it cannot deny CFRA leave, but that it intends to deny reinstatement on completion of leave Employer should give such notice prior to employee starting leave Employer must serve notice either in person or by certified mail Notice must explain basis for employer s conclusion, and, if leave has commenced, must provide employee reasonable time in which to return to work, taking into account the circumstances, such as duration of leave and urgency of need for employee to return 9

10 Expansion of Key Employee Provision Health Benefits to Key Employees [Aligns with FMLA] Regardless of response to employer s notification of intent to deny reinstatement, employee continues to be entitled to maintenance of health benefits coverage and employer may not recover its cost of health benefit premiums Key employee s rights under CFRA continue unless and until employee either gives notice that he/she no longer wishes to return to work, or employer actually denies reinstatement at the conclusion of the leave Reinstatement Rights of Key Employees [Aligns with FMLA] After employer notifies an employee that substantial and grievous economic injury will result if employer reinstates employee, employee is still entitled to request reinstatement at end of leave period even if he/she did not return to work in response to employer s notice Employer must then again determine whether reinstatement will result in substantial and grievous economic injury, based on facts at that time If employer determines that substantial and grievous economic injury will result, employer shall notify employee in writing (in person or by certified mail) of denial of reinstatement 10

11 Addition of Fraud Provision [Aligns with FMLA] Employee who fraudulently obtains or uses CFRA leave is not protected by CFRA s job reinstatement or maintenance of health benefits provisions Employer has burden of proving that employee fraudulently obtained or used CFRA leave 11

12 Changes to Group Health Plans Payment [Aligns with FMLA] Group health plan coverage must be maintained for employee on CFRA leave until: Employee s CFRA leave entitlement is exhausted; Employer can show that employee would have been laid off and employment relationship terminated for lawful reasons during period of CFRA leave; or Employee provides unequivocal notice of intent not to return to work If employees are required to pay premiums for any part of group health coverage, employer must provide employee with advance written notice of terms and conditions under which payments must be made If CFRA leave is paid, employee s share of premiums must be paid by method normally used during any paid leave unless voluntary agreement between employer and employee dictates otherwise [FMLA: no voluntary agreement option] If CFRA leave is unpaid, employer may require that payment be made to employer or to insurance carrier, but may not add additional charges for any administrative expenses If employer terminates employee s health benefits coverage because of employee s nonpayment of premiums and fails to restore the employee s health insurance upon employee s return, employer may be liable for benefits lost and other monetary losses 12

13 Addition of Interactive Process Requirement [Aligns with FMLA] Requires employers and employees to engage in an interactive process if CFRA leave involves a disability, and the employee cannot return to work at conclusion of CFRA leave This is consistent with existing employer obligations under the Fair Employment and Housing Act, but this is the first time the requirement has been stated in CFRA regulations 13

14 Calculation Methods for CFRA Leave [Aligns with FMLA] 12-Month Period Employer may choose any of the methods for determining the 12-month period in which 12 weeks of CFRA leave entitlement occurs: Calendar year Any fixed 12-month leave year 12-month period measured forward from date any employee s first CFRA leave begins Rolling 12-month period measured backward from date an employee uses any CFRA leave 14

15 Calculation Methods for CFRA Leave [Aligns with FMLA] Method must be applied consistently and uniformly Must inform employees of chosen method If employer fails to select one of the above methods for measuring 12-month period, the method that provides the most beneficial outcome for employee will be used 60 days notice required for change to method Transition must take place in such a way that employees retain full benefit of 12 weeks of leave under whichever method affords greatest benefit to the employee New method cannot be implemented in order to avoid CFRA s leave requirements If employee s schedule varies from week to week to such extent that employer cannot determine with any certainty how many hours employee would otherwise have worked (but for the taking of CFRA leave), a weekly average of hours scheduled over 12 months prior to beginning of leave period (including any hours for which employee took leave of any type) shall be used for calculating employee s leave entitlement 15

16 Changes to Intermittent or Reduced Leave [Aligns with FMLA] If intermittent or reduced leave schedule is for a planned medical treatment, then employee must make reasonable effort to schedule treatment so as not to unduly disrupt employer s operations May be taken for absences where employee or family member is incapacitated or unable to perform essential functions of position because of chronic serious health condition, even if he/she does not receive treatment by a health care provider Employer must limit leave increments to the shortest period of time that employer s payroll system uses to account for absences or use of leave, provided it is not less greater than one hour Where it is physically impossible for employee using intermittent leave or working reduced leave schedule to commence or end work mid-way through shift, entire period that employee is forced to be absent is designated as CFRA leave and counts against employee s CFRA entitlement Employee shall be permitted to return to work if he/she is able to perform other aspects of the work that are not physically impossible, such as administrative duties, and thereby shorten time designated as CFRA leave Employer may not transfer employee to alternative position to discourage employee from taking leave or to otherwise work hardship on employee 17

17 Changes to Intermittent or Reduced Leave Reduction in Pay for Intermittent Leave Employer may reduce exempt employees pay for CFRA intermittent leave or reduced work schedule, provided reduction is not inconsistent with any applicable collective bargaining agreement or employer leave policy, the FEHA, or any other applicable state or federal law [CFRA only] Expansion of Intermittent Bonding Rules If employee needs intermittent leave or leave on reduced work schedule that is foreseeable based on planned medical treatment for employee or a family member, or if employer agrees to permit intermittent or reduced schedule leave for the birth or placement of a child, employer may require employee to temporarily transfer to alternate position, which need not have equivalent duties [Aligns with FMLA] 18

18 Additional Changes to Computation of Time Periods [Aligns with FMLA] Holidays If employee uses CFRA leave in increments of less than one week, fact that a holiday may occur within a week in which employee partially takes leave does not count against employee s CFRA entitlement unless employee was otherwise scheduled and expected to work during the holiday Overtime If employee normally would be required to work overtime, but is unable to do so because of a CFRA-qualifying reason that limits employee s ability to work overtime, hours that employee would have been required to work may be counted against the employee s CFRA entitlement Permanent or Long-Term Schedule Change If employer has made permanent or long-term change to schedule (for reasons other than CFRA, and prior to employee s notice of need for CFRA leave), hours worked under new schedule are to be used for making calculation 19

19 Changes to Employee Requests for CFRA Leave [Aligns with FMLA] Verbal Notice Required Absent Waiver Unless employer waives employees notice obligations, employee shall provide at least verbal notice sufficient to make employer aware that employee needs CFRA leave, and anticipated timing and duration of the leave Notice Must Provide CFRA-Qualifying Reason The mention of vacation, other paid time off, or resignation does not render notice insufficient, provided underlying reason for request is CFRA-qualifying, and employee communicates that reason to employer Further Inquiry If Employee Notice is Vague Employer should inquire further of employee if necessary to determine whether employee is requesting CFRA leave and to obtain necessary information concerning the leave (i.e., commencement date, expected duration, and other permissible information) Employee has obligation to respond to employer s questions designed to determine whether an absence is CFRA-qualifying Failure to respond to permissible employer inquiries regarding leave request may result in denial of CFRA protection if employer is unable to determine whether leave is CFRA-qualifying 20

20 Additional Changes to Employee Requests for CFRA Leave [Aligns with FMLA] Retroactive Designation Employers may not retroactively designate leave as CFRA leave after employee has returned to work, except with appropriate notice to employee and where employer s failure to timely designate does not cause harm or injury to employee Denial of CFRA Leave If Notice Is Not Provided as Soon as Practicable Employer shall not deny CFRA leave, the need for which is an emergency or is otherwise unforeseeable, on basis that employee did not provide advance notice of need for leave, so long as employee provided notice to employer as soon as practicable Time to Respond to CFRA Request Shortened Employer shall respond to leave request as soon as practicable and in any event no later than 5 business days after receiving employee s request [Aligns with FMLA changed from 10 calendar days] 21

21 Changes to Rules Regarding Certification Contact with Healthcare Provider Employer may not contact health care provider for any reason other than to authenticate medical certification [FMLA: employer may contact health care provider to authenticate or clarify medical certification] Penalties for Employee Noncompliance with Certification [Aligns with FMLA] Employer may require that employee provide any certification within no less than 15 calendar days of employer s request for such certification, unless it is not practicable for employee to do so Absent extenuating circumstances (e.g., unavailability of health care provider), if employee fails to timely return certification, employer may deny CFRA protections until sufficient certification is provided At the time employer requests certification, employer also must advise employee of anticipated consequences of his/her failure to provide adequate certification Certification Form Amended Amends sample Certification of Health Care Provider form [FMLA certification form may be used, but must not contain section regarding symptoms and diagnosis. To avoid confusion, use CFRA certification form] 22

22 Additional Changes to Rules Regarding Certification Second Opinion In order to request a second opinion as to employee s serious health condition certification, employer must have a good faith objective reason to doubt the validity of certification [FMLA: employer only needs a reason to doubt validity of first medical opinion] Employer may only obtain second opinion concerning employee s health condition [FMLA: employer may obtain second opinion concerning either employee or family member] Employer may not ask employee to provide additional information (symptoms, diagnosis, etc.) in medical certification [FMLA: certification may include information on symptoms and diagnosis if necessary to support need for leave] Requests for Recertification Upon expiration of time period health care provider originally estimated employee needed for his own serious health condition, employer may require employee to obtain recertification only if additional leave is requested [FMLA: employer can request new certification at least every six months] 23

23 Changes to Employer s Ability to Seek Fitness-For-Duty and Return-to-Work Information [Aligns with FMLA] Fitness-For-Duty Employer may not require employee to undergo fitness-for-duty examination as condition of employee s return; after employee returns from CFRA leave, any fitness-for-duty examination must be job-related and consistent with business necessity Return-to-Work Employer is not entitled to release to return-to-work for each absence taken on intermittent or reduced leave schedule Employer is entitled to release to return-to-work for such absences up to once every 30 days if reasonable safety concerns exist regarding employee s ability to perform his/her duties 24

24 Changes to Provisions Regarding Reinstatement Rights Same or Comparable Position [Aligns with FMLA] Employee is entitled to reinstatement even if employee has been replaced or his/her position has been restructured to accommodate employee s absence Employee is entitled to same position or to comparable position that is equivalent to employee s former position in terms of pay, benefits, shift, schedule, geographic location, and working conditions, including privileges, perquisites, and status Position must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility, and authority Equivalent benefits include benefits resumed in same manner and at same levels as provided when leave began, subject to any changes in benefit levels that took place during period of CFRA leave affecting entire workforce, unless otherwise elected by employee CFRA leave shall not constitute break in service or cause employee to lose seniority, even if other paid or unpaid leave constitutes break in service for purposes of establishing longevity or seniority, or for layoff, recall, promotion, job assignment, or seniority-related benefits 25

25 Changes to Provisions Regarding Reinstatement Rights [Aligns with FMLA] Qualifications If employee is no longer qualified for position because of employee s inability to attend necessary course, renew license, fly minimum number of hours, or other non-qualifying reason, as result of leave, employee shall be given reasonable opportunity to fulfill those conditions upon returning to work Accommodation CFRA does not prohibit employer from accommodating employee s request to be restored to different shift, schedule, position, or geographic location that better suits employee s personal needs on return from leave, from offering promotion to better position, or complying with employer s obligation to provide reasonable accommodation under FEHA Employer Defense New defense to failure to reinstate to same position if hours would have been reduced regardless of leave 26

26 Paid Leave Substitution Vacation Time [Aligns with FMLA] Employee may elect to use, or employer may require employee to use, any accrued vacation time or other paid accrued time off (including undifferentiated PTO), during otherwise unpaid portion of CFRA leave Sick Leave Employee may elect to use, or employer may require employee to use, any accrued sick leave during otherwise unpaid portion of CFRA leave if CFRA leave is for employee s own serious health condition or any other reason if mutually agreed between employer and employee [FMLA: employer has right to require substitution of sick leave even when leave is not for employee s own health condition] Partial Wage Replacement [Aligns with FMLA] If employee is receiving partial wage replacement benefit during CFRA leave, employer and employee may agree to have employer-provided paid leave, such as vacation, paid time off, or sick time supplement the partial wage replacement benefit, unless otherwise prohibited by law Paid Family Leave [Aligns with FMLA] Employee receiving Paid Family Leave to care for serious health condition of family member or to bond with new child is not on unpaid leave, and, therefore, employer may not require employee to use paid time off, sick leave, or accrued vacation 27

27 Paid Leave Substitution Paid Leave Where No CFRA-Qualifying Reason [Aligns with FMLA] If employee uses paid leave under circumstances that do not qualify as CFRA leave, leave will not count against employee s CFRA leave entitlement Short- or Long-Term Disability Leave Plan [Aligns with FMLA] For leave for employee s own serious health condition, employee may also substitute leave taken pursuant to a short- or long-term disability leave plan, as determined by terms and conditions of employer s leave policy, during otherwise unpaid portion of CFRA leave This paid disability leave runs concurrently with CFRA leave, and may continue longer than CFRA leave if permitted by disability leave plan Employee receiving any form of disability payments is not on unpaid leave and, therefore, employer may not require employee to use PTO, sick leave, or accrued vacation 28

28 Changes to Health Coverage Under CFRA Group Health Coverage Time that employer maintains and pays for group health coverage during pregnancy disability leave (up to 4 months) shall not be used to meet employer s obligation to pay for 12 weeks of group health coverage during leave taken under CFRA, even where employer designates pregnancy disability leave as family and medical leave under FMLA [FMLA: leave covers both pregnancy disability and baby bonding, so employer need only maintain health benefit for 12 weeks] Entitlement to employer-paid group health coverage during pregnancy disability leave and during CFRA are two separate and distinct entitlements 29

29 Changes to CFRA Retaliation Provisions and Addition of CFRA Interference Prohibition Retaliation and Interference [Aligns with FMLA] Any violation of CFRA or its implementing regulations constitutes interfering with, restraining, or denying the exercise of rights provided by CFRA Interfering with exercise of employee s rights includes (1) refusing to authorize CFRA leave; (2) discouraging an employee from using such leave; and (3) action by employer to avoid responsibilities under CFRA Prohibits employer from discriminating or retaliating against employee or prospective employee for having exercised or attempted to exercise CFRA rights or giving information or testimony regarding his/her CFRA leave, or another person s CFRA leave, in any inquiry or proceeding All individuals, and not merely employees who are CFRA-qualified, are protected from retaliation for opposing (e.g., filing a complaint about) any practice that is unlawful (or they reasonably believe is unlawful) under CFRA No Waiver [Aligns with FMLA] Employees cannot waive, nor may employers induce employees to waive, their rights under CFRA 30

30 Preparing for Changes to CFRA Update CFRA policies, procedures and train the human resources department and/or management to ensure compliance with the new regulations Replace workplace posters and medical certification forms to comply with the new CFRA requirements. A sample certification form is included in California Code of Regulations section The DFEH has not yet published its sample new workplace poster, but has stated it will do so by July 1,

31 Thank You! Julie Capell Partner Los Angeles Annette Salazar-Shreibati Associate Los Angeles