As many business owners know – California lawmakers approved an amended California Family Rights Act (CFRA) in September.

These amendments bring significant changes to an employee’s right and ability to take leave from work with specific job protections. The changes go into effect on January 1, 2021, and small business owners, in particular, must be ready.

Why? The number of employees needed for eligibility changed

The benefits and rights under the federal Family Medical Leave Act (FMLA) and the old CFRA extended to larger companies with 50 or more employees.  Meeting the numerical threshold was an important factor in determining an employee’s eligibility to take a leave of absence under those laws.

Importantly, the new CFRA applies to employers with five or more employees. This is a significant change that extends the requirements and rules to small businesses across the state.

Key provisions of the amended CFRA

The CFRA requires covered employers to provide up to 12 weeks of unpaid leave to eligible employees for specified reasons. To be eligible, the employee must have worked for the employer for at least 12 months and have worked at least 1250 hours in the past year before the leave of absence.  Assuming the employee is eligible, the employee may request a leave of absence due to the employee having a serious health condition, needing time off to care for a family member with a serious health condition, for bonding with a new child entering the home or for a qualifying exigency related to active duty the Armed Forces.  The employer must continue health insurance benefits for the employee and must generally hold the position for the employee until the leave is over.   Employers will need to study the details in the law regarding each of the above requirements.

Small business owners must prepare

The expanded coverage to entities with five or more employees, includes all private businesses and non-profit agencies.  Small medical practices, family-owned businesses, local restaurants and retail operations are all affected. This is not simply a matter affecting large private sector businesses anymore.

Small business owners must take heed of what this law requires them to do. This means that they must:

  1. Ensure they understand the different requirements under the FMLA and CFRA, and which ones apply to them
  2. Take time to prepare leave policies, including creating a record-keeping process and request process
  3. Include these matters in their employee handbook and policies according to the new rules

This is new territory for many small business owners who must be proactive and ready to comply with these new requirements as soon as possible. Failure to comply can lead to claims with the Department of Fair Employment and Housing and potential litigation.