Why the Governor Should Veto SB 63

Chris Micheli
Attorney and Lobbyist at the Sacramento government relations firm of Aprea & Micheli, Inc.

The business community supports and promotes family-friendly policies so long as these measures do not impose an undue financial or compliance burden upon businesses operating in this state. Unfortunately, SB 63 (Jackson) does not fit this mold. To make matters worse, last year Governor Brown vetoed a similar bill by the same author that would have provided a 6-week protected leave of absence for new parents. This year’s version doubles the amount of the protected leave and does not adequately address the Governor’s veto message.

California is recognized by the National Conference of State Legislatures as one of the most family-friendly states given its existing list of programs and protected leaves of absence. Moreover, in a recent study titled “The Status of Women in the States: 2015 Work & Family,” California was ranked No. 2 in the nation for work and family policies.

SB 63 will have an adverse effect on small businesses in this state by reducing the current employee threshold from 50 to 20. Federal law (pursuant to the Family and Medical Leave Act), as well as over 40 states including California, utilizes the 50-employee threshold to ensure that businesses can comply with this mandated, protected leave of absence. By dramatically reducing the employee threshold, small businesses will struggle more under SB 63, especially when taking into consideration the increased minimum wage, higher energy and workers’ compensation costs, and the highest base sales and income taxes in the country.

This bill will impact worksites that have fewer than 20 employees because multiple locations in a 75-mile radius (the requirement imposed by this bill) may have fewer than 20 employees, but those separate facilities are combined under this bill to determine the substantially lower employee threshold. Unfortunately, the law does not provide discretion to the employer to work with potentially multiple employees out on leaves of absence.

Moreover, SB 63 does not do anything to protect these small businesses from civil lawsuits that will undoubtedly occur. The threat of litigation is real and that is because SB 63 amends California’s Fair Employment and Housing Act found in the Government Code, which provides not only injunctive relief and compensatory damages, but also exposes businesses to punitive damages and attorney’s fees by deeming a violation of SB 63 as an “unlawful employment practice”.

This year’s bill is worse than last year’s measure because SB 654 from the 2016 Session would have required a 6-week protected leave of absence, while this year’s version is a 12-week protected leave and fails to adequately address the Governor’s veto message. As Governor Brown said last year, “It goes without saying that allowing new parents to bond with a child is very important and the state has a number of paid and unpaid benefit programs to provide for that leave. I am concerned, however, about the impact of this leave particularly on small businesses and the potential liability that could result.” Nothing has changed in SB 63 that would warrant the Governor taking a different view of this year’s measure.

To make matters worse, the bill makes a feeble attempt to address the Governor’s stated concerns about the threat of litigation. In last year’s veto message of SB 654, Governor Brown said, “As I understand, an amendment was offered that would allow an employee and employer to pursue mediation prior to a lawsuit being brought. I believe this is a viable option that should be explored by the author.”  However, the newly amended language providing a “mediation pilot program” represents a legislative sleight-of-hand. What do I mean by that? Read the fine print in the bill.

First, the “mediation program” would need to be funded next summer in the state budget (“upon receiving the necessary funding, upon appropriation by the Legislature”) and then the program would have to be established (“the department…shall create a parental leave mediation pilot program”), which would take several months to occur. So, we could expect the pilot program to begin in late 2018. But then it will expire at the end of 2019 (“this section shall remain in effect only until January 1, 2020, and as of that date is repealed”). Hence, there will be a 1-year pilot program while the protected leave will continue indefinitely (i.e., there is no sunset or expiration date of the expanded leave program).

But wait, it gets better: while the pilot program would require an employee to participate upon an employer’s request to mediate a dispute, SB 63 would allow the employee to quit any time thereafter. That is why SB 63, in its attempt to address the Governor’s concerns, shows how one hand giveth and the other hand taketh away. According to the language of SB 63 (see new subdivision (k)), “if an employer requests mediation within 60 days of receipt of a right-to-sue notice, an employee shall not pursue any civil action under this section until the mediation is complete.” Sounds fair, right?

But that is the language that “giveth.” Here is the language, also contained in the same subdivision of SB 63, that “taketh away”: “For purposes of this subdivision, a mediation is complete when, at any time after the employer’s request, either party notifies the department’s Mediation Division Program and all other parties that it is electing not to participate in, or is withdrawing from, the mediation or the department notifies the parties that it believes further mediation would be fruitless.”  Because of this language, the employee can opt-out of the mediation program before it even begins! So, the actual fine print is really an empty promise of mediation. This cannot be what the Governor intended in last year’s veto message.

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