Significant Changes to California Pregnancy Leave Will Take Effect on December 30, 2012

by Wilson Sonsini Goodrich & Rosati
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The Fair Employment and Housing Commission (FEHC) recently issued revised regulations that govern pregnancy disability leave (PDL) in California.1 The new regulations take effect December 30, 2012, and include changes that will affect employers' pregnancy leave of absence policies.2 California employers with five or more employees are covered by PDL. As such, nearly all employers in California will want to take note of the new regulations. There are many revisions to the regulations, but here are the five most significant changes:

1. Health Benefits Continuation During PDL Is Separate and Distinct from Coverage During CFRA/FMLA.

The regulations clarify that employers must continue an employee's health care benefits during leave taken under PDL, as well as during family medical leaves taken under the California Family Rights Act (CFRA) or Family and Medical Leave Act (FMLA). Now, employers with 50 or more employees must provide health care continuation for the duration of PDL (up to 4 months) and during a CFRA/FMLA leave (up to 12 weeks), for a potential maximum of 29 1/3 weeks.3 Employers should review their handbooks to ensure the accuracy of their policies regarding health benefits continuation during PDL and family/medical leaves.

Since January 1, 2012, California employers with five or more employees have been required to provide continued health benefits to employees on PDL for the duration of the leave.4 Employers with 50 or more employees already had a similar obligation to provide up to 12 weeks of health benefits continuation under CFRA and/or FMLA.5 When the 2012 requirement for benefits continuation during PDL took effect, there was a lack of clarity as to whether employees who already were guaranteed benefits during a CFRA/FMLA leave were entitled to additional benefits during PDL.6 The new regulations clarify that benefits continuation during PDL is separate and distinct from benefits continuation during a CFRA leave, and therefore coverage must be continued during both leave periods. Employers with between 5 and 49 employees are not covered by CFRA or FMLA, and are thus only required to continue health benefits during PDL.

2. An Employer That Fails to Reinstate an Employee to a Comparable Position Must Now Notify the Employee of Available Positions for 60 Days Following the Scheduled Date of Reinstatement under One of the Employer's Permissible Defenses.

The new regulations significantly increase employers' obligations regarding reinstatement of an employee who has been on PDL—in particular, the requirements that an employer must meet in order to justify the failure to reinstate an employee to a comparable position. Now, non-reinstatement of an employee to a comparable position requires the employer to prove either:

  1. that the employer would not have offered a comparable position to the employee if she would have been continuously at work during the pregnancy disability leave or transfer period, OR
  2. that there is no comparable position available.7

Subsection (A) is a new addition to the regulations. Subsection (B) is not entirely new, but the FEHC has significantly changed the definition of an "available" comparable position. Now, "available" means that there is a position open on the employee's scheduled date of reinstatement or within 60 calendar days for which she is qualified or to which she is entitled by company policy, contract, or collective bargaining agreement.8 Moreover, employers have an "affirmative duty" to provide notice of "available" positions to the employee, which can include notice by letter, phone, or email (for example, emailing links to job postings on the company's website).9 These requirements mean that an employer must notify a terminated employee of available comparable positions for 60 days following her scheduled date of reinstatement in order to justify a decision not to reinstate her to a comparable position.

Generally, an employee on PDL has a right to reinstatement to the same position, or a comparable position, subject to employer defenses. Reinstatement to the same position is not required if the employer can show that the employee would not otherwise have been employed in the same position at the time of reinstatement, due to legitimate business reasons that are unrelated to PDL (such as a layoff pursuant to a plant closure).10

Even if the employer is excused from reinstating the employee to her same position, the employer must make an additional showing in order to refuse to reinstate the employee to a comparable position—a standard that has been significantly changed in the new regulations. Now, an employer can justify non-reinstatement to a comparable position by showing that it would not have offered a comparable position to the employee had she been continuously at work. Alternatively, the employer can show that there is no comparable position "available," in which case it must notify the employee of open positions for 60 days following the scheduled date of reinstatement. This type of an ongoing obligation is unprecedented in California employment law, and it remains to be seen how it will be administered and enforced.11 Employers should familiarize themselves with the changes in this area, and consult with counsel when making reinstatement or termination decisions that may be impacted by these rules.

3. Revised Definition of "Four Months" of Leave.

The new regulations clarify how to calculate the duration of PDL and an employee's specific PDL entitlement, and make it clear that an employee's entitlement to PDL varies based on the number of hours typically worked in a week. This may change PDL calculations for intermittent and/or continuous leave for some employees.

"Four-month leave" now is defined as time off "for the number of days or hours the employee would normally work within four calendar months (1/3 of a year or 17 1/3 weeks)."12 Under this definition, an employee who works 40 hours per week is entitled to 693 hours of leave (based on 17 1/3 weeks).13 Employees who work more or less than 40 hours a week (including employees with variable work schedules) are entitled to "four months" of leave on a proportional basis.14 For example, an employee who works 20 hours per week would be entitled to 346.5 hours of leave, and an employee who works 48 hours per week would be entitled to 832 hours of leave.15 PDL calculations are especially important when determining leave entitlement, as it is allocated between intermittent leave (which employees may use in small increments) and continuous leave. The revised regulations provide formulas and examples for intermittent and continuous leave calculations, and employers are advised to refer to the regulations and consult with employment counsel when administering pregnancy disability leaves under the new rules.16

4. Broader Definition of "Health Care Provider."

The regulations expand the definition of "health care provider" to include a broader list of professionals who are authorized to provide medical certifications and advice related to PDL. For purposes of PDL, the definition of "health care provider" has been expanded to include marriage and family therapists, licensed acupuncturists, licensed midwives, clinical psychologists, clinical social workers, chiropractors, and physical assistants.17

5. "Perceived Pregnancy" Is Protected.

The regulations clarify that "perceived pregnancy," in addition to actual pregnancy, is protected under California law. Employers may not discriminate, harass, or take other adverse actions on the basis of "perceived pregnancy."18 "Perceived pregnancy" is defined as "being regarded or treated by an employer or other covered entity as being pregnant or having a related medical condition."19

In addition to the above, the FEHC has implemented other changes throughout the new regulations, including revisions to the required employee notices.20 Employers should review the changes to the regulations, available here, and update their policies, notices, and forms as necessary.

For more information on California employment laws and regulations relating to leaves of absence or other employee matters, please contact Fred Alvarez, Rico Rosales, Marina Tsatalis, Laura Merritt, Alicia Farquhar, or another member of the firm's employment and trade secrets litigation practice.


1 Effective January 1, 2013, the Fair Employment and Housing Commission will be replaced by the Fair Employment and Housing Council. The change follows the passage of SB 1038, which eliminates the commission, ends administrative adjudication, creates the council, and authorizes the new FEHC to bring civil actions directly in court. See SB 1038, available at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201120120SB1038&search_keywords=.

2 The full text of the regulations and a redline showing the changes are available at http://www.fehc.ca.gov/act/pdf/pregnancyregulations/Approved_Preg_Regs_11_30_12.pdf.

3 The actual duration of a PDL or CFRA leave may vary depending on how the leave is calculated and administered, because an employee's use of intermittent leave may change the total number of weeks of continuous leave to which she is entitled. The 29 1/3-week maximum assumes that both the PDL (17 1/3 weeks) and CFRA baby-bonding leave (12 weeks) are taken continuously.

4 Cal. Gov't Code § 12945(a)(2).

5 Cal. Gov't Code § 12945.2(f); Cal. Code of Regs. (C.C.R.) tit. 2 � 7297.5(c).

6 Employees who are eligible for PDL and CFRA/FMLA may take a leave of absence for up to 4 months under PDL plus 12 weeks of baby-bonding leave under CFRA.

7 § 7291.10(c)(2).

8 § 7291.10(c)(2)(B)(1) (emphasis added).

9 § 7291.10(c)(2)(B)(2).

10 § 7291.10(c)(1).

11 Wilson Sonsini Goodrich & Rosati submitted public comments to the FEHC and attended the public hearing on these regulations during the public comment period. We addressed the 60-day notification requirement as well as other issues in this alert.

12 § 7291.9(a)(1).

13 See § 7291.9.

14 § 7291.9(a)(2).

15 § 7291.9(a)(2)(A).

16 See § 7291.9(a).

17 § 7191.2(n).

18 See §§ 7291.3, 7291.5, 7291.6(a).

19 § 7291.2(q).

20 See §§ 7291.17, 7291.18. The final text of the regulations, which includes the notices and form, is available at http://www.fehc.ca.gov/act/pdf/pregnancyregulations/FINAL_APPROVED_
PREG_REGS_CLEAN_11_30_12.pdf
.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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