On August 7, 2026, San Francisco Mayor Daniel Lurie signed Ordinance 162-26 which reduces the amount of time an employee must work for an employer before they become eligible for supplemental compensation under the Paid Parental Leave Ordinance (SF PPLO). Effective January 1, 2027, certain employees will qualify for employer-paid parental leave benefits after just 90-days of employment, down from the prior 180-day requirement. Note that there is a phased-in approach to this law change based on employer size (explained further below).
Background
The city of San Francisco (SF) requires that certain employers provide up to 8 weeks of supplemental Paid Family Leave (PFL) benefits to employees who are also receiving California Paid Family Leave (CA PFL) to bond with a new child. The state provides partial wage replacement funded through employee payroll contributions. San Francisco requires covered employers to supplement that state benefit, so the employee receives 100% of their regular wages during up to eight weeks of bonding leave.
Covered Employers
SF PPLO applies to all employers with 20 or more employees, regardless of where the employer is located. When determining employer size, employers must count all employees, regardless of location or classification, including employees currently on leave. All employees within a controlled group of corporations defined by federal tax law are counted.
Covered Employees (old rule)
Employees eligible for PPLO benefits are those who:
- Began employment at least 180 calendar days before the start of leave.
- Work at least eight hours per week in San Francisco, including employees working from home.
- Work at least 40% of their total weekly hours in San Francisco.
- Are eligible for and receiving Paid Family Leave benefits under the California’s PFL law to bond with a new child.
Qualifying Leave
Qualifying reasons for leave include birth, adoption, and foster care placement. Importantly, employees must also be eligible to receive CA PFL benefits to bond with a new child.
SF PPLO Updated Rule
The amended ordinance reduces the eligibility waiting period from 180 days to 90 days. However, the ordinance includes a temporary phase-in period that preserves the 180-day requirement for certain employers, based on size:
- Employers with 100+ employees: 180-day rule applies through December 31, 2026.
- Employers with 20-99 employees: 180-day rule applies through December 31, 2027.
After this transition period ends, the 90-day standard will apply uniformly to all covered employers.
Employer Action Items
Employers should begin preparing well before their transition deadline. Reviewing workforce, policies, systems, and procedures now will help ensure eligible employees receive supplemental pay under the updated 90-day service requirement. Here are a few key action items for employers to consider:
- Confirm the applicable compliance date by determining the total worldwide headcount, including employees within any applicable controlled group.
- Update leave policies and employee handbooks. Revise paid parental leave policies, eligibility descriptions, leave-request materials, and handbook provisions to replace the 180-day service requirement with the 90-day requirement by the applicable effective date. San Francisco requires covered employers to include information about the PPLO in their handbooks.
- Coordinate PPLO administration with California PFL. Establish procedures for obtaining the employee’s California PFL benefit information, calculating the employer’s required supplemental compensation, and coordinating payments.
- Update notices, forms and postings. Monitor the San Francisco Office of Labor Standards Enforcement for revised PPLO posters, application forms, FAQs, calculators and employer guidance. Display the current required poster and provide the prescribed PPLO form when an employee indicates that they will become or have become a parent.
- Maintain supporting documentation. Retain records showing employee service dates, San Francisco work hours, work location, California PFL benefit information, wage calculations, notices, forms, and supplemental payments in accordance with applicable recordkeeping requirements.
- Consult employment counsel on complex cases. Seek guidance regarding fluctuating headcount, controlled-group determinations, employees working in multiple jurisdictions, employees with multiple employers, intermittent leave, and coordination with more generous company benefits.
Employers should review their paid parental leave policies and procedures to ensure they comply with the revised eligibility rules of SF PPLO before any applicable transition period ends.
Additional Resources
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