California’s Small Employer Family Leave Mediation Program: Is It Good for Employers and Employees?

California’s employment laws are known for being robust and employee-friendly, but they also place significant responsibilities on employers—especially small businesses. To help balance these obligations with the needs of both employers and employees, the state established the Small Employer Family Leave Mediation Program. This program offers a structured, lower-cost alternative to litigation for disputes arising from family and medical leave, and it’s particularly relevant for businesses with fewer than 20 employees.

For employers and employees alike, understanding how the program works—and when to use it—can help prevent disputes from escalating and foster better workplace relationships. For help with an employment dispute in San Francisco, contact Richard Koss to speak with an experienced Bay Area employment law attorney.

What Is the Small Employer Mediation Program?

The Small Employer Family Leave Mediation Program was created as part of the expansion of the California Family Rights Act (CFRA) in 2021. Under the amended law, CFRA protections now apply to employers with as few as five employees. In response to concerns from small businesses about potential exposure to litigation, California lawmakers added a safety net: a mediation program administered by the California Civil Rights Department (CRD).

The program allows either the employee or the employer to request mediation before the employee files a lawsuit concerning alleged violations of leave rights under the CFRA. These rights include job-protected leave for bonding with a new child, caring for a seriously ill family member, or dealing with the employee’s own serious health condition. As of 2024, the program also covers disputes related to bereavement leave and reproductive loss leave.

Once an employee requests a right-to-sue notice from the CRD, either party has 30 days to request mediation. The CRD is required to initiate the mediation process within 60 days of receiving the request. During that time, the employee is not allowed to proceed with a civil lawsuit until the mediation concludes or is declined.

Benefits for Employers

For small employers, one of the most appealing aspects of the program is that it offers a chance to resolve disputes before they turn into costly and time-consuming litigation. Small businesses often lack the legal resources and in-house human resources departments that larger companies rely on to deal with intensive employment law matters. Mediation provides a streamlined, less adversarial path forward.

Confidentiality is another major benefit. Unlike a lawsuit, which is part of the public record, mediation is private. This can help employers avoid reputational damage, even when disagreements arise. Additionally, mediation may preserve working relationships—something that can be particularly valuable in smaller teams where interpersonal dynamics are closely knit.

Importantly, the process comes at no cost to the employer. The CRD provides the mediator and administers the process, which makes it more financially accessible to businesses that may not be able to absorb the expense of prolonged legal disputes.

Advantages for Employees

From the employee’s perspective, the program provides an accessible and empowering way to resolve workplace issues. Mediation tends to be less intimidating than formal legal proceedings and gives employees the opportunity to speak directly with their employer in a facilitated setting.

Because the program is designed to be completed quickly, employees may also benefit from a faster resolution of their claims. Lawsuits can take months or even years to resolve, while mediation can potentially bring closure in a matter of weeks.

Another benefit is that the mediation is free for the employee as well, removing financial barriers that might otherwise discourage someone from pursuing their rights under the CFRA.

Potential Downsides and Considerations

While the Small Employer Mediation Program has clear advantages, it’s not without its drawbacks. First, participation in the program is voluntary. Although the CRD facilitates the process, neither party is obligated to reach a resolution. If one side is uncooperative or enters mediation in bad faith, the process may end in a stalemate.

Second, mediation does not result in a legally binding decision unless the parties reach a settlement and put it in writing. Unlike a judge’s ruling, a mediated agreement relies on mutual consent. If no agreement is reached, the employee is free to file a lawsuit once mediation concludes, which could ultimately lead to the same costs and risks the employer was trying to avoid.

Finally, the program is limited in scope. It only applies to disputes related to family and medical leave under the CFRA (and, more recently, bereavement and reproductive loss leave). Other types of employment disputes—such as wage and hour claims or harassment allegations—are not eligible for mediation under this program.

Final Thoughts

The Small Employer Family Leave Mediation Program represents a meaningful effort to provide balance in California’s employment law landscape. It gives small employers a fair opportunity to resolve disputes without the burden of litigation, while also preserving employees’ rights under the CFRA.

Employers should consider integrating mediation into their broader risk management strategies, particularly as compliance with expanded leave laws becomes more complex. Employees, on the other hand, can benefit from understanding that mediation offers a real chance for their voices to be heard and their concerns addressed without having to go to court.

Legal Counsel Can Help With Employment Disputes and Mediation

For both parties, early legal advice can be invaluable. An experienced employment law attorney can help assess whether mediation is the right course of action and how best to prepare for a productive outcome.

If you are a California employer or employee facing a family leave dispute, or if you simply want to understand your rights and options, contact the law offices of Richard Koss on the San Francisco Peninsula (Redwood City) or East Bay (Antioch). With deep experience representing both employers and employees throughout the San Francisco Bay Area, Richard Koss offers clear, practical guidance tailored to your specific circumstances.