Seth Sandronsky May 19, 2016, 7:29am

SACRAMENTO - California Senate Bill 1166, the New Parent Leave Act that Sen. Hannah-Beth Jackson, D-Santa Barbara introduced in February, would expand California’s current protected parental leave law to employers with payrolls of five to 50 workers, mandating that employees receive 12 weeks of parental leave.

But, the proposal is not without controversy. Jackson says it is intended to promote parent-child bonding, but critics say it could actually hurt women and minorities, as well as lead to costly litigation. 

The state's Family Rights Act already provides a 12-week leave provision for employees working for businesses with more than 50 workers, as long as they have worked at least 1,250 hours in the preceding 12 months, 

A hearing on SB 1166 took place in the Senate Appropriations Committee on May 2. At the time, a majority of members present and voting placed the bill, due to its fiscal impact, into a “suspense file” for consideration at a May 16 testimony-only hearing. 

The bill passed on a 4-2 party line vote in the Senate Judiciary Committee on April 19. Four Democrats, including Sen. Jackson who chairs the committee, voted for the measure. 

Sen. John M. W. Moorlach, R-Costa Mesa, and committee vice chair, and Sen. Joel Anderson, R-Alpine, cast the two no votes.

"I support the right to choose the benefits you offer to employees,” Anderson told the Northern California Record. “I am opposed to Senator Jackson's SB 1166 because I believe it hurts women and minorities who are working hard in a start-up or growing business."

Moorlach said he voted against SB 1166 due to his employer experience as a partner in a CPA firm. He focused his criticism on the stipulation that requires employers to guarantee workers at the outset of their leave that they will have the same or comparable position when their leave expires, 

 “It’s very difficult for small employers to keep a position open for an employee on parental leave in the real world,” he told the Northern California Record. “I had a problem with the bill because of its effects on small businesses.”

SB 1166 would not apply to employers with less than five workers. 

The Sacramento Bee, in an unsigned editorial, supported passage of Jackson’s bill, writing “we hope lawmakers of all persuasions and parties will get behind a more secure family life for Californians because this year’s proposal will particularly benefit men who would like to take paternity leave” 

SB 1166 supporters include the American Civil Liberties Union of California; California Labor Federation, AFL-CIO and Western Center on Law and Poverty. 

The California Chamber of Commerce termed SB 1166 a “job killer,” joining in opposition with the Civil Justice Association of California, National Federation of Independent Business and Western Growers Association: 

Kim Stone, CJAC president, agreed with Moorlach's criticism, saying there could be tremendous financial consequences to small businesses if SB 1166 passes. 

“SB 1166 would expose California employers to costly lawsuits unless they provide all employees with up to 12 weeks of parental leave,” she told the Northern California Record. “If the company doesn’t do so, it’s labeled an 'unfair employment practice,' which, under California law, means the employer can be sued under the Fair Employment and Housing Act (FEHA was enacted in 1980).”

“FEHA allows compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney’s fees,” according to Stone. “If enacted, this bill will lead to increased litigation costs for businesses big and small in California.”

An April 26 CJAC letter opposing SB 1166 to the Senate Appropriations Committee chair, Sen. Ricardo Lara, D-Bell Gardens, and Sen. Patricia Bates, R-Laguna Niguel, and the remaining five members, cited a recent report by Hiscox, a major global insurer. 

The Hiscox Guide to Employee Lawsuits says that American firms on average had at least an 11.7 percent risk of facing an employment lawsuit.

By contrast, California employers face a 40 percent risk of employment lawsuits, topped only by three states: Alabama (41 percent); Nevada (47 percent) and New Mexico (66 percent).

The Hiscox Guide draws on current employment charge data from the federal Equal Employment Opportunity Commission and its state equivalents nationwide. 

“A representative study of 446 closed claims reported by small-to medium-sized enterprises with fewer than 500 employees showed that 19 percent of employment charges resulted in defense and settlement costs averaging a total of $125,000," the report says. "On average, those matters took 275 days to resolve.”

An amended version of SB 1166 calls for the employee using parental leave to first use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer.

It also requires employer-paid group health plan payment to continue for a qualified parent on leave.

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