New California “Designated Person” Standards Could (Further) Complicate Leave Administration

On September 29, 2022, California’s governor signed Assembly Bill (AB) 1041, which, beginning January 1, 2023, expands the definition of a “family member” under the California Family Rights Act (CFRA) and California’s Healthy Workplaces Healthy Families Act (HWHFA) to include a “designated person.” Under both the amended CFRA and HWHFA, employees will be able to identify a designated person for whom they want to use leave when they request unpaid (CFRA) or paid (HWHFA) leave.  Further, under both amended laws, employers will be able to limit an employee to one designated person per 12-month period.  How these laws will each define designated person, however, differs slightly.

Under the CFRA, a designated person will mean “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” Under the HWHFA, however, a designated person is “a person identified by the employee at the time the employee requests paid sick days” – the individual need not be related by blood to the employee, and their association need not be the equivalent of a family relationship. Subject to guidance from California’s Labor Commissioner, a designated person for HWHFA purposes possibly might include a roommate, a new romantic partner, or a next-door neighbor.

The designated-person changes will affect how employers comply with similar federal, state, and/or local leave laws.

CFRA & FMLA: Under the CFRA, which applies to employers with five or more employees, one reason eligible employees can use unpaid leave is to care for a family member who has a serious health condition. Individuals whom the CFRA considers to be a family member is broader than its federal counterpart, the federal Family and Medical Leave Act (FMLA). For example, though both the FMLA and CFRA consider a child, parent, and spouse to be a family member, the CFRA additionally considers a family member to include a domestic partner, grandchild, grandparent, and sibling. With AB 1041, the list of CFRA family members will further expand and further distinguish itself from the FMLA by including a designated person. The most obvious challenge associated with the change will be accurately tracking how much job-protected unpaid family medical leave the employee can use and/or has used during the relevant 12-month period. The possibility that an employee could be off work for a substantial period of time during a 12-month period for a similar reason but for different family members, and have job protections attach to those lengthy absences, becomes more real.

Example: An employee’s father and the father’s twin brother (the favorite uncle of the employee) each have a serious health condition. If the employee chooses the uncle as a designated person, the employee could use up to 12 weeks of CFRA leave to care for the uncle. Because the uncle is not an FMLA family member, those 12 weeks of leave would not count against the employee’s federal leave entitlement, meaning the employee could then use up to 12 weeks of FMLA leave to care for the employee’s father. Note, however, that if the order of care were reversed, and instead the employee elected first to provide up to 12 weeks of care for the employee’s father, an employer could “double count” that leave under both the FMLA and CFRA, so the employee would be unable to use an additional 12 weeks of leave to care for the employee’s uncle during that same 12-month period.

CFRA & Paid Family Leave: The amended CFRA definition not only creates (further) disharmony with its federal counterpart for unpaid family medical leave, but also will create a partial disconnect when it comes to paid leave under California’s Paid Family Leave (PFL) program.  Similar to the CFRA, the CA PFL program allows eligible individuals to receive PFL wage replacement benefits from the state when they need to care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner who has a serious health condition. Currently, for example, an employee might be able to convert a portion of their otherwise unpaid CFRA absence into a partially paid absence via PFL – which provides up to eight weeks of wage replacement benefits in a 12-month period for covered uses – and have (possibly) the entire absence be job-protected by virtue of the CFRA (as PFL does not provide job-protected leave, just partial wage replacement). If, however, the employee uses their CFRA leave to care for a designated person, the entire absence would be unpaid unless an employer voluntarily provides a paid family medical benefit that allows employees to use leave for the designated person or an employee uses other paid leave benefits their employer offers during the absence, like vacation or PTO.

HWHFA & Local Ordinances: California’s HWHFA applies to employers of all sizes. Under the HWHFA, employees can use paid leave the law requires employers to provide for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, a family member, which, before AB 1041, included a child, grandchild, grandparent, parent, registered domestic partner, sibling, and spouse. On or after January 1, 2023, eligible employees will also be able to use their mandatory paid sick leave to care for or assist a designated person under these circumstances.

The amended HWHFA will not be the first law in California to allow employees to use paid sick leave for a designated person. Under the paid sick and/or safe leave ordinances in Berkeley, Emeryville, Oakland, and San Francisco (and under the San Francisco Public Health Emergency Leave Ordinance), an employee without a spouse or registered domestic partner can designate a person for whom they can use paid leave. Unlike the amended HWHFA, which will allow an employee to designate a person at the time they request leave, these local ordinances require an employer to, shortly after employment begins, allow an employee to make a designation that will apply to future leave requests, and to update that designation annually.

The different designated-person standards could present a few challenges. In addition to the basic difference about who can even make such a designation – all employees (state law) or certain employees (local ordinances) – because under the HWHFA employees can make the designation at any time, employers will be less able to set a specific time period each year for HR to coordinate employees’ family member designations. The state law is silent concerning how the designation interacts with similar local laws, so an employee possibly could designate one person for whom to use leave under a local ordinance and a different person under state law. Add on to that challenges that exist already when reconciling state and local leave requirements – e.g., determining whether the reason for leave is available under state and local law and whether employees can use leave to care for or assist a family member – and this small change to state law could have an outsized impact on leave administration.

HWHFA & Kin Care: Labor Code sections 233 and 234 are informally known as California’s “kin care” law. In a nutshell, the kin care law requires that, if an employer provides employees paid sick leave employees can use for specific reasons, the employer must allow an employee to use a portion of that leave to care for or assist a family member for covered reasons. Since 2016, the kin care law has defined family member by using the HWHFA’s definition: “‘Family member’ has the same meaning as defined in Section 245.5.” The kin care definition, however, does not include the phrase “as amended,” as some terms in other California leave laws might. For example, Labor Code section 230.1 (leave for victims of crime or abuse) includes “as amended” when it refers to incorporated definitions of “domestic violence” and “sexual assault.” Accordingly, questions currently remain as to whether the family member definition in the kin care law will change because the HWHFA definition will, or whether it will remain the same. If the latter, similar to the scenario discussed above with designating leave as CFRA and/or FMLA, an administrative challenge could arise for employers when determining whether an employee’s use of paid leave to care for or assist a family member could count against the employee’s leave entitlements under both the HWHFA and kin care law.

Next Steps: Employers should review their paid and unpaid leave policies, practices, procedures, and forms to determine what changes, if any, are necessary to comply with new CFRA and HWHFA designated-person standards. Employers should also monitor the websites of California’s Civil Rights Department (formerly the Department of Fair Employment and Housing) and Labor Commissioner for forthcoming guidance or proposed rules. Employers will have less than three months to sort out leave administration issues that AB 1041 creates, so they should start thinking now about how they can quickly and competently respond to “on the spot” designations that may accompany a leave request from an employee on or after January 1, 2023.

https://www.littler.com/publication-press/publication/new-california-designated-person-standards-could-further-complicate