San Francisco Enacts New Military Paid Leave Act 

By: HUB's Absence Management Team

On January 20, 2023, San Francisco Mayor, London Breed, approved a city ordinance called the Military Leave Pay Protection Act. The ordinance requires large private employers to provide differential paid leave for military reservists called up to active duty. The law goes into effect on February 19, 2023 and makes San Francisco the first jurisdiction in the United States to require private employers to provide such paid leave.

Overview: The Military Leave Pay Protection Act

The Military Leave Pay Protection Act was signed on January 20, 2023, adding Article 33Q to the city Policy Code, and makes San Francisco the first jurisdiction in the country to require private employers to provide differential paid leave to employees who are members of the military while they perform military service. The ordinance goes into effect on February 19, 2023.

Covered Employers and Employees

The law applies to all private employers who have one hundred or more total employees (not necessarily within San Francisco) to provide differential pay to military member employees who work within the boundaries of San Francisco (County and City) in the event they are called for active military duty.

Military employees who work within the boundaries of San Francisco for a covered employer and are called for active military duty will be paid the difference between their military pay and the amount they would have received from their employer had they not been called in for military duty.

The ordinance does not, however, apply to employees covered by a collective bargaining agreement (CBA) where the requirements under the ordinance are expressly waived in the CBA in clear and unambiguous terms. The ordinance does not prevent any employer from adopting or retaining military leave policies that are more generous than what the ordinance provides.

Military Duty Definition

The ordinance defines military duty 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.” This includes providing support for responding to the COVID-19 pandemic or natural disasters.

Military duty under the ordinance also includes, “military training, drills, encampment, naval cruises, special exercises, Emergency State Active Duty, or like activity.”

Should an employee fail to return to their job within sixty (60) days after being released from military duty, the employer will be allowed to treat the differential compensation paid as a loan with “interest at a rate equal to the minimum amount necessary to avoid imputed income” under the Internal Revenue Code of 1986. Interest would begin to accrue ninety days after the later of either the employee’s release from military duty or return to fitness for employment, and the loan would be payable in equal monthly installments over a period of no longer than five (5) years.

Next Steps

Employers who meet the eligibility large employer definition and have employees within the boundaries of San Francisco will need to update their military leave policies to align and comply with the requirements of the Military Leave Pay Protection Act that goes into effect on February 19, 2023.