On Tuesday, San Francisco became the first city in the United States to pass legislation that will provide fully paid parental leave to new parents. The city’s Board of Supervisors unanimously passed the measure, and with the Mayor’s anticipated formal approval, it will go into effect on January 1, 2017.

California currently offers paid parental leave through its public disability insurance, which pays 55% of a worker’s pay for up to six weeks. Under San Francisco’s new law, employers will be required to supplement the remaining 45% of a worker’s pay during those six weeks of leave.

The Law’s Application

The new law will apply to San Francisco employers with 20 or more employees, but its application will be phased in over a period of one year. Employers with 50 or more employees must comply beginning January 1, 2017; employers with 35-49 employees must comply as of July 1, 2017; and employers with 20-34 employees will need to comply starting January 1, 2018.

To be eligible for paid parental leave upon the birth or adoption of a child, an employee must work at least 8 hours per week and conduct at least 40% of his or her work within the city of San Francisco. Leave will be provided to both mothers and fathers, same-sex and opposite-sex couples.

Employer Action

For employers who offer a more generous paid parental leave benefit, San Francisco’s law will not apply. However, for those who do not currently offer a parental leave benefit, or whose benefit is not as generous as that provided under the new law, the January 2017 – January 2018 deadlines will quickly approach. These employers should begin to consider the new law’s requirements and, pending further details on the law’s operation, prepare to have a strategy in place within the next two years.