Oct 25, 2011

New California Laws Relating to Insurance Coverage During Pregnancy Leave and New Hires

California Governor Jerry Brown recently signed into law legislation requiring employers to maintain and pay for insurance coverage for employees on pregnancy disability leave, as well as legislation requiring a written notice at the time of hiring to non-exempt employees. The new laws become effective on January 1, 2012.

Insurance Coverage During Pregnancy Leave

The insurance legislation amends the California Fair Employment and Housing Act’s pregnancy disability provisions to prohibit employers from refusing to maintain and pay for insurance coverage for the duration of maternity leave, up to four months. Employers must provide pregnant employees the same level of group health benefits during pregnancy-related leave as provided prior to taking the leave. Employers may recover the insurance premiums paid to continue the employee’s coverage during the leave from the employee if the employee fails to return from pregnancy disability leave, provided that the employee’s failure to return from leave is not due to leave taken under the Family and Medical Leave Act (“FMLA”), the Moore-Brown-Roberti Family Rights Act (“CFRA”), or for another circumstance beyond the control of the employee.

The leave under the new law is in addition to traditional maternity leave provided under the FMLA and CFRA. Prior to the passage of the new law, employees on pregnancy disability leave were entitled to the same insurance benefits provided by an employer to employees on other types of disability leaves. With respect to continuation of health benefits, many employers limit the continuation of insurance coverage to 12 weeks, as this is the required time period for continuation of coverage under the FMLA and CFRA for family and medical leaves of absence. With the passage of the new law, California employers must extend the continuation period to four months for pregnancy disability leaves.

Written Notice Required for Non-Exempt Employees

Under the law regarding wage and employment information to new hires, California employers must provide each non-exempt employee a written notice, “in the language the employer normally uses to communicate employment-related information to the employee,” containing the following information:

  • The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates of overtime, as applicable;
  • Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
  • The regular payday designated by the employer;
  • The name of the employer, including any “doing business as” names used by the employer;
  • The physical address of the employer’s main office or principal place of business, and a mailing address, if different;
  • The telephone number of the employer;
  • The name, address, and telephone number of the employer’s workers’ compensation insurance carrier, and
  • Any other information the Labor Commissioner deems material and necessary.

If an employer makes any changes to the information set forth above, it must notify employees in writing of the changes within seven calendar days of the change. Although some of the information above is already covered by required workplace posters, the law does not repeal the posting requirements. Pursuant to the new law, the Labor Commissioner must prepare a template that complies with the requirements above.

If you have any specific questions regarding these new laws, please contact your employment counsel at Smith, Gambrell & Russell, LLP.

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