Brief Summary: San Francisco’s new city ordinance, effective February 19, 2023, requires private employers with 100+ employees to provide up to 30 days of supplemental compensation for military leave.
Often the leader in employment-related legislation, San Francisco’s new city ordinance requiring private employers to provide paid military leave is no exception. The city ordinance, titled the “Military Leave Pay Protection Act” (MLPPA) was signed by San Francisco Mayor London Breed on January 20, 2023. The MLPPA, which takes effect 30 days after enactment on February 19, 2023, is the first major city ordinance in the U.S. to require private employers to provide paid military leave.
Covered Employers & Employees
Employers subject to MLPPA are those employers with 100 or more employees, regardless of location. This means that MLPPA applies to all employers with 100 or more employees worldwide even if they have just a few San Francisco-based employees. The City of San Francisco and other governmental employers are not subject to the MLPPA.
Covered employees under the MLPPA includes employees who work within the geographic boundaries of San Francisco (including part-time and temporary employees) and who are members of the reserve corps of the United States Armed Forces, National Guard, or other uniformed service organization of the United States.
The MLPPA does not apply to employees covered under a bona fide collective bargaining agreement that expressly waives the MLPPA requirements in clear and unambiguous terms.
Military Duty
Military duty is defined under the MLPPA as “active military service in response to the September 11, 2001 terrorist attacks, international terrorism, the conflict in Iraq, or related extraordinary circumstances, or military service to provide medical or logistical support to federal, state, or local government responses to the COVID-19 pandemic, natural disasters, or engagement in military duty ordered for the purposes of military training, drills, encampment, naval cruises, special exercises, Emergency State Active Duty, or like activity.”
Supplemental Compensation
Under the MLPPA, supplemental compensation is the amount that employees on leave for military duty receive from their employers comprising the difference between the amount of the employee’s gross military pay and the amount of gross pay the employee would have received from their employer had the employee worked their regular work schedule (excluding overtime unless regularly scheduled as part of the employee’s regular work schedule).
The supplemental compensation required to be paid by the employer to the employee may be offset by amounts paid under any other law or employer military leave policy so that the employee does not receive excessive payments for their MLPPA leave.
If an employee does not return to their position with their employer within 60 days of release from military duty, the employer may treat the supplemental compensation received as a loan payable with interest. In such cases, interest will begin to accrue 90 days after the later of either employee’s release from military duty or return to fitness for employment. Such loans will be payable in equal monthly installments over a period not to exceed five years.
Employers may, but are not required to, provide more generous paid military leave policies than what is required under the MLPPA.
MLPPA leave can be taken in daily increments for one or more days at a time, for up to 30 days in any calendar year.
Enforcement & Penalties
The San Francisco Office of Labor Standards and Enforcement (OLSE) will implement and enforce the MLPPA. OLSE will investigate any suspected violations of the MLPPA.
OLSE may order relief for MLPPA employer violations including, but not limited to, administrative penalties of three times the amount of the withheld supplemental compensation or $250, whichever is greater. If an MLPPA employer violation resulted in other harm to an employee, the administrative penalty may also include $50 for each day the violation occurred or continued.
The MLPPA also includes civil enforcement provisions permitting civil lawsuits against employers for MLPPA violations under certain circumstances, provided that written notice is sent to OLSE and the San Francisco City Attorney in advance of an intent to bring an action.
USERRA
Covered employers are advised to consult with their employment counsel to determine how the MLPPA interacts with the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which provides certain reemployment and benefit rights to employees following military service along with protection from employment discrimination on the basis of their service.
Next Steps for Employers
The MLPPA joins a myriad of other San Francisco employment-related ordinances for employers to navigate through with respect to their San Francisco-based employees, including the Health Care Security Ordinance, the Public Health Emergency Leave, Paid Parental Leave Ordinance, and Paid Sick Leave Ordinance.
Employers with San Francisco-based employees are advised to review and update their leave policies and payroll practices to ensure compliance with the MLPPA in advance of the upcoming February 19, 2023 effective date.
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