The new CFRA regulations take effect on July 1, 2015.  Because of the numerous detailed provisions contained in these new regulations, this report will not cover every revision and addition, but is intended to provide an overview.  The full text of the regulations, are available here:  http://www.dfeh.ca.gov/res/docs/FEHC/Final%20Text%20(1).pdf 

Summary of the CFRA Regulatory Updates and a Family Medical Leave Act (FMLA) Comparison

Many of the amended regulations clarify certain CFRA provisions, while others work to align the CFRA regulations with the FMLA regulations, which were amended in March 2013. 

Aligning the CFRA with the FMLA

The following are examples of the updated CFRA regulations, which now more closely track the FMLA regulations—these are also discussed in more detail in the report below:

• Definition of “covered employer” and “eligible employee.”
• Definition of “spouse” to clarify coverage for same-sex spouses.
• Reinstatement provisions, permissible defenses to a refusal to reinstate and “key employee” determinations and defenses.
• Employer requirements for responding to CFRA leave requests (revised regulations give employers 5 business days instead of 10 calendar days) and making retroactive designations.
• Intermittent leave and reduced schedule provisions regarding overtime, holidays and calculating leave entitlement.  This includes an employer’s ability to reduce exempt employee pay for intermittent or reduced periods of leave.
• Consequences of an employee’s failure to respond to employer inquiries regarding a CFRA leave request, failure to return a required medical certification, and fraudulently obtaining CFRA leave.
• Health coverage and payment of medical premiums.

Key Differences Remain

Despite the attempted alignment between the CFRA and FMLA regulations, many key differences remain.  A summary of these include the following, and are discussed in more detail within the report below:

• Medical Certifications: Under the FMLA, an employer may contact an employee’s health care provider to clarify or authenticate a medical certification.  Under the new CFRA regulations, an employer may only contact an employee’s health care professional to authenticate a medical certification.  The standard for seeking a second opinion also differs.  Under the FMLA, an employer may obtain a second opinion if there is “reason to doubt” the validity of a medical certification, whereas under revised CFRA regulations, the employer may obtain a second opinion if there is a “good faith, objective reason” to doubt the validity of the certification.  Moreover, under the CFRA, the employer is barred from seeking a second opinion unless the certification involves the employee’s own serious health condition (under the FMLA, the request can be related to the serious health condition of the employee’s family member), and may not ask the employee to provide additional information in the certification process (i.e., symptoms or the underlying condition).  Furthermore, under the CFRA, a fitness for duty examination cannot be automatically required at the end of an employee’s leave; rather, the examination can only be requested if it is job-related and consistent with business necessity.
   
• Substitution of Paid Leave: Under the FMLA, an employee may elect/or the employer may require the employee to substitute accrued paid leave during an otherwise unpaid FMLA leave.  Under the CFRA, the rule differs depending on whether the leave is for the employee’s own serious health condition (whereby the employee/employer may elect) or for other reasons (employee/employee may agree).  Moreover, under the CFRA, the employee may elect or the employer may require that the employee use unused PTO or vacation days for any unpaid CFRA leave.  The CFRA regulations also clarify that an employee receiving Paid Family Leave benefits is not on unpaid leave, therefore, the employer cannot require substitution of accrued time off during this portion of CFRA leave.

• Serious Health Condition: The CFRA and the FMLA have different definitions, including the definition of “inpatient care,” discussed further below. 

• Pregnancy Disability: Although pregnancy is a serious health condition under the FMLA, it is still not covered under the CFRA.  Nonetheless, recent CFRA regulations state that an employer must maintain an employee’s group health care benefits for the duration of the employee’s pregnancy disability leave (up to 4 months) and any subsequent CFRA leave (up to 12 weeks).

Updated Definitions

The following definitions were either added to or revised within the new CFRA regulations:

• Covered employer: added “successor in interest of a covered employer.”

• Covered employee: changed from “more than 12 months” of service to “at least 12 months” of service.

• Key employee: added to address new “key employee” reinstatement provisions.  Defined as an employee paid on a salary basis who is amongst the “highest paid 10 percent of the employer’s employees who are employed within 75 miles of the employee’s worksite.”

• Reason of the birth of a child: includes, but is not limited to, bonding with a child after birth.

• Reinstatement: explicitly added that reinstatement is defined as “the return of an employee to the position that the employee held prior to CFRA leave, or a comparable position,” not just that it is synonymous with “restoration” within the meaning of the FMLA.

• Inpatient care: no longer requires an overnight stay if there was an expectation that the person would remain at least overnight, but was discharged early.

• Incapacity: new definition under “serious health condition.”  Defined as “the inability to work, attend school, or perform other regular daily activities due to a serious health condition, its treatment, or the recovery that it requires.”

• Spouse: added registered domestic partner (as defined in Family Code sections 297-297.5).  Includes same-sex partners in marriage.

Covered Employers, Joint Employers and Eligible Employees

The new regulations provide additional detail regarding which employers are covered by the law, how joint employers are treated, and which employees are eligible; as follows:

Covered Employers

Under the new regulations, employees on paid or unpaid leave, including CFRA leave, a leave of absence, disciplinary suspension, or other leaves of absence are counted in the total number of employees to determine if the employer is a “covered employer.” (Section 11087(d)(1).) 

Similarly, under the FMLA, “Employees on paid or unpaid leave, including FMLA leave, leaves of absence, disciplinary suspension, etc., are counted as long as the employer has a reasonable expectation that the employee will later return to active employment.” (Section 825.105(c).) 

Joint Employers

The new regulations also provide guidance on when an employer is considered a “joint employer.”  Specifically, it provides that when two or more businesses exercise some control over the work or working conditions of the employee, the companies may be considered joint employers, even though the companies are separate and distinct entities with separate managers, owners and facilities.  (Section 11087(d)(3).)  Determination of “joint employer” status is made upon a consideration of the “entire relationship . . . viewed in its totality based on the economic realities of the situation.”  (Id.)

When a joint employer relationship exists, the employee must be counted by both employers when determining CFRA eligibility for the employer’s employees.  (Section 11087(d)(4)(B).)

The FMLA has similar (if not identical) provisions regarding joint employers.  However, the FMLA regulations provide examples and additional language not included in the new CFRA regulations.

Eligible Employees

Under the new regulations, full-time or part-time employee working in California employed for a total of at least 12 months (52 weeks) with the employer, are eligible.  This is a change from previous CFRA regulations, which stated an eligible employee was an individual “with more than 12 months (52 weeks) of service.”

The new regulations also clarify that periods of employment prior to a break of employment of seven years or more “need not” be counted towards the 12-month minimum, except for a break in service caused by military service.  (Section 11087(e)(2).)  An employer can consider this prior service as long as it does so uniformly.  (Id.)  This is similar to FMLA regulations, however the FMLA also exempts written agreements (including CBAs) concerning the employer’s intention to rehire the employee.  (See Section 825.110(b)(2)(i).)

For employees with no fixed worksite (e.g., work from home, etc.), their worksite is the location: (1) to which has been assigned as their home base; (2) from which their work is assigned; or (3) to which they report.  (Section 11087(e)(4)(A).)  For example, if a salesperson works from her home in California but receives assignments from the New York Office, the New York office rather than her home would be her worksite from which there must be 50 employees within a 75-mile radius.  The FMLA has similar provisions at Section 825.111(a)(2), but again provides additional examples.

Under the new regulations an, employee's “worksite” can refer to either a single location or a group of contiguous locations for purposes of determining whether the employer employs at least 50 employees within a 75-mile radius.  (Section 11087(e)(4).)  See FMLA Section 825.111(a) for similar language.  Further, if the employee is jointly employed by two or more employers, the employee’s worksite is the primary employer’s office from which the employee is assigned or reports, unless the employee has physically worked for at least one year at a facility of a secondary employer, in which case, the employee’s worksite is that of the secondary employer.  (Section 11087(e)(4)(B).)  The employee is also counted as an employee by the secondary employer to determine CFRA eligibility for the secondary employer’s employees.  See FMLA Section 825.111(a)(3) for similar language.

Once the employee meets the eligibility requirements and gives notice of intent to take leave (as opposed to takes a leave) the employer may not deny the leave if the number of employees falls below 50 in a 75-mile radius.  (Section 11087(e)(4)(C).)  See FMLA Section 825.110(e) for similar language.

If an employee is not eligible for CFRA leave at the start of the leave because the employee has not met the 12-month length of service requirement, the employee may nonetheless meet the requirement while on leave, because the leave counts towards length of service – but not towards the 1,250 hour requirement.  (Section 11087(e)(5).)  In this case, the employer should designate the portion of the leave after the requirement has been met CFRA leave. 

Finally, if an employee is on the payroll for any part of a week (paid or unpaid leave) during which benefits or compensation are provided to the employee (e.g., workers’ compensation or group healthcare), than that week counts as a week of employment.  (Section 11087(e)(5).)  See FMLA Section 825.110(d) for similar language. 

Serious Health Conditions Under the New Regulations

The definition of “serious health condition” was amended to explicitly state that it is not just limited to on-the-job injuries, and includes conditions that involve either inpatient care (with revised a definition, see below) or continuing treatment including, but not limited to, treatment of substance abuse.  (Section 11087(q).)

Under the new regulations, “inpatient care” is defined as a stay (not just an overnight stay) in a hospital, hospice or residential care facility, any subsequent treatment in connection with such impatient care, or any period of incapacity.  (Section 11087(q)(1).)  A person is now considered to be an “inpatient” when a health care facility formally admits the person to the facility with the expectation that the person will remain at least overnight and occupy a bed, even if the person is later discharged or transferred to another facility and does not stay overnight.  (Id.)  In previous regulations, inpatient care required an “overnight” stay in a health care facility.  Under the FMLA, “inpatient care” still requires an overnight stay.  (See Section 825.114.)

Under the new regulations, incapacity is now defined as the inability to work, attend school or perform other regular daily activities due to a serious health condition, its treatment or the recovery that it requires.  (Section 11087(q)(2.)  See FMLA Section 825.113(b) for similar language.  

Clarification Regarding Leave Limitations

The new regulations clarify that if both parents are eligible to receive CFRA leave, the employer may limit the leave for the birth, adoption or foster care placement of a child to a combined total of 12 months, but the employer may not limit the entitlement to take leave if leave is for any other reason, including the need to care for the serious health condition of a child.  (Section 11088(c).)  See FMLA Section 825.120(a)(3) and (6) for similar language.  

Reinstatement Guarantee and Rights Upon Return

The new regulations address and slightly revise reinstatement guarantees and rights upon return from CFRA leave, discussed below.

Reinstatement Guarantee

After granting CFRA leave, an employer must “inform the employee of its guarantee” to reinstate the employee to the same or comparable position, and shall provide the guarantee in writing upon request.  (Section 11089(1).)  The new regulations highlight that the employer shall “inform” the employee of the right to reinstatement rather than just “guarantee” the reinstatement, as previously stated.

An employee is entitled to reinstatement even if the employee has been replaced or his or her position has been restructured to accommodate the employee’s absence (new provision).  (Section 11089(2)(A).)  See FMLA Section 825.214 for similar language.  

Further, if an employee is no longer qualified for his or her position because of the employee’s inability to attend a necessary course, renew a license or fly a minimum number of hours, etc., as a result of the leave, the employee shall be given a reasonable opportunity to fulfill those requirements upon returning to work.  See FMLA Section 825.215(b) for similar language.  

Rights Upon Return

Several regulatory provisions were added regarding an employee’s rights upon return from CFRA leave, which mostly mirror the FMLA.  Employees are entitled to the “same position or to a comparable position that is equivalent (i.e., virtually identical) to the employee’s former position in terms of pay, benefits, shift, schedule, geographic location, and working conditions, including privileges, perquisites, and status.”  The position must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility and authority.  (Section 11089(b).)  The FMLA provides that the employee is “entitled to return to the same or equivalent position.”  (See FMLA Section 825.214.)

Equivalent benefits include benefits resumed in the same manner and at the same levels as provided for when the leave began, subject to any changes in the benefit levels that may have taken place during the CFRA leave affecting the entire workforce.  (Section 11089(b)(1).)  See FMLA Section 825.215(c) -(d) for similar language.  

Further, the new regulations do not prohibit the employer from accommodating the employee’s request to be restored to a different shift, schedule, position, location, etc., that better suits the employee’s personal needs upon return, or from offering the employee a promotion to a better position or from complying with an employer’s obligations to provide reasonable accommodation under the disability provisions of FEHA.  (Section 11089(b)(2).)  See FMLA Section 825.215(e)(4) for similar language.  

Updates to Employers’ Permissible Defenses

Within the new regulations, language regarding the following defenses was either revised or added:

Change in Employment Unrelated to Protected Leave

The existing regulations stated that an employer may terminate an employee on CFRA leave if employment would have ceased or hours reduced regardless of the protected leave.  (Section 11089(d).) The new regulations added, “or hours would have reduced.”  This is the employer’s burden and it shall not be satisfied if the employee has been replaced or his position has been restructured to accommodate the employee’s absence.  Thus, if the position was not eliminated, but it was restructured and the job duties were distributed because the employee took leave, this defense will not apply.  (Id.)  See FMLA Section 825.216(a) for similar language.  

Additionally, if a shift has been eliminated or overtime has been decreased, an employee would not be entitled to work that shift or the same overtime upon reinstatement.  (Section 11089(d)(1)(B).)  See FMLA Section 825.216(a)(2) for similar language. 

Key Employee Defense

An employer may refuse to reinstate a key employee “only” if the employer establishes by a preponderance of the evidence that all of the following exist:

(1) the employee is a salaried employee;

(2) the employee is among the highest paid 10 percent of employees who are employed within 75 miles of the worksite at which the employee is employed (whether the employee is among the highest paid 10 percent is determined by comparing year-to-date wages of the employer’s employees within 75 miles of the worksite where the employee is employed at the time of the leave request, divided by the number of weeks worked, including weeks in which leave was paid);

(3) the refusal to reinstate is necessary because it will cause substantial economic injury (the new regulations state that a precise test cannot be set for the level of hardship or injury to the employer, however, if the reinstatement would threatened the “economic viability” of the business or “substantial long-term economic injury” the required showing is met; minor inconveniences expected in the normal course of business do not suffice);

(4) the employer must inform the employee in writing at the time the employee gives notice of the need for CFRA leave that he or she is a key employee and of the potential consequences with respect to reinstatement and maintenance of health benefits if the employer determines it cannot reinstate the employee upon return (notice must be given as soon as practicable after determining the employee is a key employee – failure to give notice denies the employer of the right to deny reinstatement even if substantial and egregious harm will result); and

(5) the employer must notify the employee in writing after it determines that “substantial and egregious harm” will result if the employee is reinstated, stating that it cannot deny CFRA leave, but that it intends to deny reinstatement upon the completion of leave.  This notice should ordinarily be given before the start of leave, and be delivered by certified mail or in person.  (Section 11089(d)(2)(A)-(G).)  See FMLA Section 825.219 for similar language.  

If the employee does not return to work after receiving the notice that the employer does not intend to reinstate him or her, the employee is still entitled to health benefits until the employee gives notice that he or she no longer intends to come back to work or the employer denies reinstatement at the conclusion of the leave. (Section 11089(d)(2)G).)

Fraudulently Obtained CFRA Leave Defense

An employer may refuse to reinstate an employee who fraudulently obtains or uses CFRA leave.  The employer bears the burden to prove that the leave was fraudulent.  (Section 11089(d)(3).)  See FMLA Section 825.216(d) for similar language. 

Computation of Time Periods

The new regulations also discuss the computation of time periods used by employers to calculate how much CFRA time an employee may have:

Generally, employers may choose any of the following methods provided in the FMLA regulations:

(1) the calendar year;

(2) any fixed 12-month leave year;

(3) the 12-month period measured forward from the date an employees first CFRA leave begins, or

(4) a rolling 12-month period measured backward from the date an employee uses any CFRA leave. 

The revised regulations simply provide a clearer definition of these methods.  (Section 11090(b).)  Employers must apply this policy uniformly to all employees within California and notify employees requesting CFRA leave of its chosen method.  (Id.)  If the employer fails to select a method, the method most beneficial to the employee will be selected.  (Id.)  Employers must give 60 days-notice to employees if they want to change to another method, and employees in the transition must be given 12-weeks of leave under the method which affords the greatest benefit to employees.  (Id.)  See FMLA Section 825.200(b)(1)-(4).

Calculation of Workweek, Intermittent Leave, Holidays, Overtime and New Schedules

Workweek Variances

Under the new regulations, If an employee’s schedule varies from week to week, a weekly average of the hours scheduled over the 12 months prior to the beginning of the leave period shall be used to calculate leave entitlement.  (Section 11090(c).)  See FMLA Section 825.204(b)(3).

Intermittent Leave

For intermittent leave, only the time the employee is away from work may be deducted from the total leave allotted.  If the employee knows about the leave or it is for continued therapy, the employee must make reasonable efforts to schedule the leave so that it does not disrupt the employer’s operations.  (Section 11090(c)(2).)  See FMLA Section 825.204(b)(1).  Intermittent leave is also allowed for:

• The birth, adoption or foster care placement of a child, whereby the employer must grant a minimum of two leave requests of a duration less than two weeks, but may grant additional leave requests of a duration of less than two weeks.  (Section 11090(d).)  Note:  If the intermittent leave is needed for the birth, adoption or foster care placement of a child, the employer may require the employee to transfer to an alternative position.  (Section 11090(e)(1).)  See FMLA Section 825.204(a).
   
• Where the employee or family member is “incapacitated or unable to perform the essential functions of the job because of a chronic serious health condition, even if they did not receive treatment by a health care provider."  (Section 11090(e).)  See FMLA Section 825.202(b)(12).  Under new CFRA regulations, employers must limit the leave increments to the shortest time allowed, provided it is not greater than one hour.

Further, with regard to the use of intermittent leave, transfers may not be made so as to discourage the employee from taking leave, and any such transfers must comply with applicable CBAs—although a job transfer can have different duties.  (Section 11090(e)(1).)   See FMLA Section 825.204(b).  Moreover, if an employee cannot leave mid-day (flight attendant, etc.), the total time absent counts against the employee, but the employee should be permitted to return to work to perform administrative duties.  (Section 11090(e)(3).)  See FMLA Section 825.205(a)(2).

Finally, employers may reduce exempt employees’ pay for CFRA intermittent leave, so long as it is not inconsistent with any CBA or employer leave policies, the FEHA, or state or federal law. (Section 11090(e)(4.)

Holidays, Overtime and New Schedules

Under the new regulations, if an employee takes CFRA leave in increments of less than a week, the holiday hours are not counted against the employee, unless the employee was otherwise scheduled and expected to work during the holiday.  (Section 11090(c)(3).)  See FMLA Section 825.200(h).

For overtime, if the employee cannot work overtime because of the qualifying event and would have normally had to work overtime, such hours are counted against the employee (intermittent or reduced schedule leave).  Voluntary overtime that the employee elects not to work does not count against the employee.  (Section 11090(c)(4).)  See FMLA Section 825.205(c).

Finally, if a new schedule is in effect (for a reason other than the qualifying event), the new schedule should be used for making the leave calculation.  (Section 11090(c)(4).)  See FMLA Section 825.205(b)(3).

Requests for CFRA Leave

Under the regulations, the mere mention of vacation, other paid time off, or resignation does not render the notice insufficient, provided the underlying reason for the request is CFRA qualifying, and the employee communicates the reason to the employer.  The employer can inquire further to determine if the employee is requesting CFRA leave and to obtain the necessary information (commencement of leave, expected duration, and other permissible information).  An employee must respond to these questions, and failure to respond may result in denial of CFRA leave if the employer is unable to determine whether the leave is CFRA-qualifying.  (Section 11091(a)(1).)  See FMLA Section 825.302(c).

Employers can also retroactively designate leave as CFRA leave with appropriate notice to the employee and if the employer’s failure to timely designate does not cause harm to the employee.  (Section 11091(a)(1)(B).)  See FMLA Section 825.301(d).

Further, an employer cannot deny a CFRA leave for an emergency, so long as the employee provided notice to the employer as soon as practicable.  New regulations added “so long as the employee provided notice to the employer as soon as practicable.”  (Section 11091(a)(4).)  See FMLA Section 825.302(b).

Updated Notice Requirements

Employers must respond to a leave request as soon as practicable, and in any event, no later than “5 business days after receiving the employee’s request.”  This is a change from 10 calendar days.  (Section 11091(a)(6).) 

Medical Certifications

The employer may not contact the employee’s health care provider for any reason other than to authenticate a medical certification.  (Section 11091(b)(1)-(2).)  In contrast, under the FMLA, an employer can also contact a health care provider for “clarification.”  At the expiration of a leave for a serious health condition, the employer may request recertification, but only if additional leave is requested.  New regulations added “but only.” (Section 11091(b)(2).)

Further, under the new regulations, employer may require an employee, at the employer’s expense, to obtain a second opinion, but only if the employer has a “good faith, objective reason” to doubt the validity of the certification, and this provision only applies to the employee’s own serious health condition.  However, the employer shall not ask the employee to provide additional information (i.e., symptoms or the underlying condition) that is beyond the medical certification.  (Section 11091(b)(2)(A)(1).)  Under the FMLA, the standard is “reason to doubt,” and a second opinion can be requested for both an employee and an employee’s family members’ serious medical condition.  A sample Health Certification has been updated to comply with the new regulations and can be found within the text of the new regulations here:  http://www.dfeh.ca.gov/res/docs/FEHC/Final%20Text%20(1).pdf  

Employers may require a return-to-work certification from the health care provider, but only if the employer has a uniform policy or practice requiring such releases, and there is no CBA forbidding the practice.  The new regulations added “but only,” and a reference to CBAs.  The new regulations also state that an employer is not entitled to such a release when the leave is taken on an intermittent or reduce schedule leave, however, the employer is entitled to such a release for such absences no more than once every 30 days, if reasonable safety concerns exist regarding the employee’s ability to perform his or her duties.  (Section 11091(b)(2)(E).)

If the employee fails to provide the employer with medical certification within 15 calendar days of the employer’s request (at which time the employer must advise the employee of the consequences of failing to provide the certification), the employer may deny CFRA protections for the leave following the expiration of the 15-day time frame until certification has been provided (same applied to recertification).  If the employee never produces certification, the leave need not be classified as CFRA leave.  (Section 11091(b)(2)(F).)  Finally, the employer may not ask for a new certification before the initial certification expires, even if the initial certification included a “lifetime” condition.

Terms of CFRA Leave

Under the new regulations, an employer may now require, or an employee may elect to use, any accrued vacation or any other accrued time off (PTO) during unpaid CFRA leave.  An employee may