February 2023: New San Francisco Law Requires Supplemental Compensation During Military Leave

15 Feb


Update Applicable to:
Employers with 100 or more employees.

What happened?
On January 20, 2023, San Francisco’s mayor signed the Military Leave Pay Protection Act (MLPPA), allowing covered employees to qualify for military leave.

What are the details?
Effective February 19, 2023, the MLPPA will require employers with 100 or more employees to supplement the pay of covered employees during a qualifying military leave for up to 30 days in a calendar year. 

Covered Employers
The ordinance applies to employers who employ 100 or more employees, regardless of location, but excludes the City of San Francisco and other governmental employers.

Covered Employees
The ordinance applies to any employee of a covered employer who (1) works within the geographic boundaries of San Francisco, including part-time and temporary employees; and (2) is a member of the reserve corps of the United States Armed Forces, National Guard, or other uniformed service organization of the United States.

Supplemental Compensation
Under the ordinance, while on covered military leave, employers must pay covered employees the difference between the amount of the employee’s gross military pay and the gross pay the employer would have paid the employee had the employee worked their regular work schedule. When calculating the employee’s gross pay, covered employers are not required to include overtime unless the overtime is scheduled as part of the employee’s regular work schedule.

Covered employees may take the leave in daily increments for one or more days at a time, for up to 30 days in any calendar year.

Limits on Supplemental Compensation
The ordinance does include limits on the leave taken, including the following:

  1. The supplemental compensation the employer is required to pay the employee can be offset by amounts paid under any other law or employer military leave policy so that the employee does not receive excessive payments for the leave time taken.
  2. If an employee can return to work but does not do so within 60 days of release from military duty, the employer may treat any supplemental compensation paid to the employee during the employee’s military leave as a loan to the employee to be repaid, with interest, to the employer under the terms of the ordinance.

Collective Bargaining Waiver
The ordinance does not apply to employees covered by a bona fide collective bargaining agreement if the collective bargaining agreement expressly waives the ordinance’s requirements.

For more information, please see the links below:

Military Leave Pay Protection Act (MLPPA)

San Francisco Office of Labor Standards Enforcement

Article 1Article 2Article 3

What do employers need to do?
Employers should review the links above and consider starting discussions with HR, payroll, and legal about managing military duty absences and their supplemental compensation obligations effectively.

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