San Francisco Lowers Tenure Requirement for Supplemental Compensation Under Paid Parental Leave Ordinance

On August 7, 2026, the mayor of San Francisco, California signed File # 260451 (Ordinance 162-26), which will lower the amount of time an individual must be employed with their employer before they are potentially entitled to receive supplemental compensation under the Paid Parental Leave Ordinance (SF PPLO).

Under the SF PPLO, if a covered employee is receiving California paid family leave insurance (CA PFL) benefits for new child bonding – bonding with a minor child during the first year after birth or placement through foster care or adoption – employers with 20 or more employees (anywhere) must pay up to eight weeks of “supplemental compensation.” “Supplemental compensation” is the employer’s “top-up” payment that makes up the monetary difference between an employee’s normal weekly wages (calculated using the formula required by the Ordinance) and the amount the employee receives from the state in CA PFL benefits. The SF PPLO limits the total combined amount an employee may receive from CA PFL benefits and employer-paid supplemental compensation. For claims filed in 2026, that maximum combined weekly benefit amount is $2,522.

To be a “covered employee,” an individual must satisfy four criteria. The amendments change the first criterion, lowering the time an employee must be employed from 180 to 90 days (to align with the waiting period under San Francisco’s Paid Sick Leave Ordinance). The remaining criteria, however, have not changed: 2) the employee must perform at least eight hours of work per week in San Francisco; 3) at least 40% of the employee’s total weekly hours worked must be in San Francisco; and 4) the employee must be eligible to receive CA PFL benefits for new child bonding.

The amendments take effect in stages based on employer size. Employers with 100 or more employees must comply with the new 90-day employment requirement beginning January 1, 2027. Employers with 20 to 99 employees will have an additional year to comply, with the change taking effect on January 1, 2028. As under the current law, the SF PPLO does not apply to employers with 19 or fewer employees.

Covered employers should monitor the San Francisco Office of Labor Standards Enforcement’s Paid Parental Leave Ordinance webpage for updated guidance, posters, and forms. They should also review their paid parental leave policies and procedures to ensure they will comply with the revised SF PPLO.