A ‘job killer’ family leave bill is now law for small business. Here’s how it’s working out
When Ghuan Featherstone was poring over options for a paternity leave before the recent birth of his fourth daughter, he liked what he heard from a human resources representative at the Inglewood general contracting company where he works.
Under a new California law, he would be eligible to take as many as 12 weeks of unpaid leave to bond with his newborn, with the guarantee that his job as a project superintendent would be waiting for him when he returned.
When baby Serenity was born in late October, Featherstone, 48, concluded that he could not afford to take unpaid time. Instead, he and his boss at Curtom-Dunsmuir negotiated a compromise. Featherstone would take vacation time before the birth, then three weeks of fully paid paternity leave—a kind gesture on the part of his company, not dictated by state or federal law—before returning to work this week.
Brenda Curry, co-owner of Curtom-Dunsmuir, had a ready explanation for why the company decided to accommodate Featherstone’s needs. “He’s a proven employee that we definitely need next year,” she said.
So far, employers and employees are feeling their way under the new law, which the California Chamber of Commerce opposed as a potential “job killer.” Those affected must weigh the pros and cons—and try not to get lost in the state’s envied-but-complex patchwork of family leave legislation.
The New Parent Leave Act builds on existing law, allowing eligible employees at companies with 20 to 49 employees to take three months of unpaid leave to care for a newborn or newly adopted child, with the guarantee that their jobs will remain open for them. The time can be combined with the state’s separate, paid family leave insurance program, which replaces as much as 70 percent of lost wages, thus giving California workers at small businesses a version of the paid, job-protected benefits enjoyed by employees of larger businesses. Public education on the option is a work in progress, though.
Passed last year amid intense lobbying by worker and family advocates and state business interests, the new protections cover an additional 16 percent of the state’s labor force, or about 2.7 million more workers. Parents may take the leave within one year of the child’s adoption, foster-care placement or birth.
State Sen. Hannah-Beth Jackson (D-Santa Barbara) worked for two years to win passage so that employees of smaller companies could take baby-bonding time without worrying about losing their employment. Her intent, she said, was to address the disparity in bonding time that resulted for parents who worked for smaller companies.
“If you want to have healthy families and productive employees, you have to recognize they have lives outside of work,” said Jackson.
First 5 California, a Sacramento-based organization focused on children’s early learning and well-being, also praised the measure.
“The first months of life are incredible foundational moments for every child,” said Erin Gabel, First 5 California’s deputy director. “We see paid family leave and family leave protections as the first step in the comprehensive early learning system that children need to thrive and to become productive members of our communities.”
The United States is the only developed nation with no mandated paid parental leave. California is among the few states that have sought to backfill with their own legislation.
Like counterparts throughout the nation, California employers with at least 50 employees must comply with federal and state laws that allow eligible employees to take 12 weeks of unpaid leave, with the right to reinstatement, to bond with a new child, recuperate from a serious health condition or care for an ailing family member, among other specified reasons.
In 2002, California became the first state to offer any paid parental leave, but job protection applied only to companies with 50 or more employees. The law extended unemployment disability compensation to individuals who took time off work to care for a seriously ill family member or to bond with a new minor child.
A change that took effect this year allows people earning close to minimum wage to be paid 70 percent of their salaries while on leave for six weeks; workers with higher pay, as much as $108,000 annually, may get 60 percent of their salaries during leave. Workers’ contributions fund the program. SB 63 is one of many measures that legislators have used to fill in gaps in job protection and coverage.
Employers offer mixed reviews of the New Parent Leave Act, which they say adds to a sometimes confusing welter of federal and state family leave laws.
“I applaud that it’s there for those who want it,” said Curry, the Curtom-Dunsmuir co-owner. “But it can cause a hardship for any size business, especially small businesses. If you have enough time to plan around it, it works.”
Mike Carson, president of Brody Pennell, a Mid-City Los Angeles heating and air-conditioning company with 36 employees, agrees.
He said he counts himself lucky that his business is dominated by men and that most of his female employees are past child-bearing age. Under the new law, he might soon have to hire someone to cover for a male employee whose wife is pregnant, even as heating and air-conditioning technicians are in short supply.
“I really don’t have a problem with the baby-bonding bill,” he said. “If it is really necessary, we can work around it. The problem I have is that bills like SB 63 allow the camel to get his nose under the tent. … What’s next? … It just doesn’t seem to stop.”
Two years ago, when Brody Pennell’s main dispatcher wanted more time to bond with her newborn and couldn’t afford to take all of the weeks unpaid, the company scrambled to arrange a combination of state disability and paid time off. In anticipation, Carson hired an additional dispatcher for the busy summer months. It helped that the employee cut short her leave and returned to work ahead of schedule.
“It was a little tough, but we managed,” Carson said. “I understand that family and people’s health come first. But I hope that employees understand we still have a business to run.”
For workers, the New Parent Leave Act affords a welcome measure of flexibility.
Chris Cobb, a structural engineer at BWE Inc., a San Diego engineering company with 48 employees, said the timing works for him and his wife, Jenny, who is nine months pregnant. He said he expects to take some unpaid leave after the birth.
“The nice thing is that the law puts the decision in our hands,” Cobb said. He said he has a good relationship with his company. “Personally, I know that even if I wasn’t protected, I would be able to negotiate something with my employer.”
CalChamber said it remains concerned about SB 63’s potential effects on employers.
“Because this bill adds another protected leave to the myriad of leave programs that already exist in the state, we continue to believe the new law will have a detrimental impact on small employers … by exposing them to higher administrative costs as well as devastating litigation,” said Jennifer Barrera, CalChamber’s senior vice president of policy.
“We will know more after the law is fully implemented and there is an accurate assessment of the number of administrative complaints and civil actions filed.”
Mark Herbert, California director for Small Business Majority, an advocacy organization for small businesses, said CalChamber’s concerns were unfounded. Small Business Majority’s scientific opinion polling shows that small-business owners overwhelmingly support the publicly administered paid family leave policy and the extension of job protections for employees of companies with 20 or more employees.
Adam Rochon co-owns (with his mother, Belinda Roberts) Sequoia Employee Benefits & Insurance Solutions in Exeter, Calif. They have three employees. Rochon calls himself a “pretty moderate Democrat” who supports family leave legislation, including job protection for employees at small enterprises.
Although he understands that some employers might view the new law as a burden, he says in the long run job protection will help employer as well as employee. “Knowing that someone can leave and come back—still trained and knowing how to do the job—that’s a good thing,” he said.