On January 20, 2023, the mayor of San Francisco signed into law the Military Leave Pay Protection Act (MLPPA), which took effect on February 19, 2023. The MLPPA requires employers with more than 100 employees nationally to provide supplementary pay when covered employees are out on a qualifying military leave for up to 30 days per calendar year.

Supplemental Pay and Coverage

• The MLPPA requires covered employers to supplement the pay of an employee on a covered military leave. Employers must pay eligible employees the difference between their gross military pay and the gross pay they would have received if working their regular schedule (not including overtime, unless regularly scheduled).
• Employers may offset their obligations under the MLPPA if they pay employees under any other law or company policy that applies while an employee is on leave.
• Because employers likely will not know individual employees’ gross military pay, they may need to ask employees for a copy of their most recent official leave and earnings statement (LES) for the purpose of calculating supplemental pay.
• Covered employees include those who
  • work in San Francisco, and
  • are members of the National Guard, reserve corps of the U.S. Air Forces, or other U.S. uniformed service organization, and
  • are absent from work while on military duty
• Part time and temporary employees are included in the ordinance.
• The requirements of the MLPPA can be waived in a bona fide collective bargaining agreement.

Return to Work and USERRA

• When employees receive supplemental pay under the MLPPA and are fit for employment in their previous position upon release from duty, but do not return to work within 60 days, the employer may treat the supplemental compensation paid as a loan subject to interest. Loan repayment (including interest) may begin 90 days after the later of either the employee’s release from duty or the employee’s return to fitness for work.
• Loans are to be repaid in equal monthly installments over a maximum of five years.
• However, under the Uniformed Services Employment and Reemployment Rights Act (USERRA), an employee who has been on military leave for 180 days or more has up to 90 days to request reemployment.

Penalties

• Employees who believe their rights under the MLPPA have been violated may file an administrative complaint with the San Francisco Office of Labor Standards Enforcement (OLSE).
• Under limited circumstances, a civil lawsuit could be filed against an employer for an alleged violation.
• Relief may include payment of unlawfully withheld compensation, interest, and damages of $50 per day of violation to each individual whose rights were violated.

Additional Information: FAQs

• OLSE has published FAQs to provide additional information about the administration of the MLPPA.
• The FAQs clarify that supplemental compensation should be calculated by using the employee’s basic pay rate for military service, excluding pay allowances (e.g., combat pay, clothing or housing allowance). This amount should be subtracted from the regular gross pay the employee would have received had they remained at work.
• The FAQs also state that “benefits, including, but not limited to, health care, retirement, and profit-sharing benefits must be paid as if the employee had worked their regular work schedule.”
• Supplemental pay under the MLPPA is not required for any hours normally worked outside San Francisco.
• Although the MLPPA did not explicitly include a notice requirement, the FAQs state that notice of supplemental military pay rights should be provided within a reasonable time after the employer learns that the employee will require time off for military leave.
• Employers with employee handbooks must add language describing the rights granted by the MLPPA in any subsequent editions of their handbooks.
• OLSE will be including a notice regarding the MLPPA in the annual poster mailings it sends to employers.
• Employers must keep records of employees’ hours scheduled, hours worked, and military leave taken. Records must be maintained for a minimum of four years.
• The MLPPA does not include any explicit language prohibiting discrimination or retaliation against employees who exercise their rights under the ordinance, but the FAQs note the protections against discrimination and retaliation under USERRA.