San Francisco Board Passes First-Of-Its-Kind Paid Military Leave Act for Private Employers

The City of San Francisco recently passed — subject to the Mayor’s approval or veto — a paid military leave mandate for private employers that is the first-of-its-kind in the United States.

On December 13, 2022, San Francisco’s Board of Supervisors passed the Military Leave Pay Protection Act (the “Act”), which requires employers with 100 or more employees to provide paid military leave in the form of differential pay to employees for up to 30 days per calendar year — i.e., the difference between what they would have earned at their private employer and what they earned in the military. The Act states that its provisions for private employers extend beyond existing California state laws and existing federal law — i.e., the Uniformed Services Employment and Reemployment Rights Act (“USERRA”).

• Scope. The Act applies to “any employee of any Employer who works within the geographic boundaries of San Francisco, including but not limited to part-time and temporary employees.” The Act provides that the Office of Labor Standards and Enforcement (“OLSE”) shall issue regulations that are expected to provide additional guidance on application and enforcement, including as to the scope of work that is considered “within” San Francisco. As an example, OLSE has previously stated, in the context of a separate employment rule, that for “employees who live in San Francisco, work performed for a Covered Employer from the employee’s own home, including telecommuting, shall qualify as work performed ‘within the City and County of San Francisco.’” See Office of Labor Standards Enforcement Rule Implementing Spending Requirement of the San Francisco Health Care Security Ordinance (HSCO) 3.3.
• Paid Military Leave Obligation. Under the Act, covered employees must receive paid military leave in the form of differential pay for leave periods up to 30 days per calendar year. Specifically, covered employees on military leave—such as leave to perform training drills—must receive the difference between the amount of their gross military pay and the amount of pay they would have received from the employer had they worked their regular work schedule (including overtime if regularly scheduled as part of the employees’ regular work schedule). This pay can be offset by other amounts paid to employees on military leave, so an employee does not receive greater compensation while on military leave than they would have if they had worked their usual schedule.
• Administrative and Private Enforcement. The Act contains robust administrative and civil enforcement provisions. OLSE can order an employer who violates the law to pay up to (i) three times the amount of differential pay withheld or $250, whichever is greater; and (ii) up to $50 per day to employees for each day the compensation was withheld. OLSE can also institute a civil action to secure compliance; request City agencies or departments to revoke registration certificates, permits, or licenses held until the employer complies; and assess additional penalties of up to $50 per day to cover the costs of enforcement. Employees can also bring civil actions themselves if they comply with certain administrative requirements and can obtain the same remedies, along with their attorneys’ fees. Suits brought by an employee on behalf of the public, however, may be subject to limitations on the available remedies.
• CBA Waiver. While the Act includes a “Waiver Through Collective Bargaining,” that CBA waiver applies only if the requirements in the Act “are expressly waived in the [CBA] in clear and unambiguous terms.”
• Effective Date. The Act is currently being reviewed by the Mayor of San Francisco, for approval or veto. The Act shall become effective 30 days after it is signed by the San Francisco Mayor, returned unsigned, remains unsigned by the Mayor within 10 days after she receives it, or when the Board of Supervisors overrides the Mayor’s veto. The Mayor has not yet acted on this bill.

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