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Paid Family Leave in California Begins in 2004

On September 23, 2002, the State of California enacted the first-in-the-nation paid family leave. Beginning on July 1, 2004, nearly all non-governmental employees in California (those who are covered by the current State Disibility Insurance (SDI) plan or a substitute voluntary plan) will be eligible to receive up to six weeks of Family Temporary Disability Insurance (FTDI) benefits over a 12-month period. FTDI benefits will serve as a wage replacement to cover periods where a worker is unable to work because of a need to care for an ill child, spouse, parent or domestic partner, or for the birth, adoption or foster care placement of a child. Employees are immediately eligible for the program upon hire and can begin to receive benefits following a seven-day waiting period.

Under Paid Family Leave, employers are required to provide new employees and employees who request Paid Family Leave with a comprehensive review of rights, benefits and policies by posting updated versions of the Notice to Employees (DE 1857A), which, along with the claim form, are available at the web address:

FTDI benefits are funded through employee payroll deductions. The State Disability Insurance (SDI) withholding rate increased by 0.08 percent to allow for said benefits. FTDI benefits are determined by an employee's past quarterly earnings. For 2005, employees can receive between $50 and $840 per week.

There are some limitations to the FTDI program. First, the paid family leave entitlement does not give employees the legal right to take a leave of absence. It only provides partial pay for situations in which employees are otherwise legally entitled to take family leave, such as:

  • When an employer's policy specifically grants such leave
  • In situations covered by the Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA)
  • If employees quit their jobs to care for themselves or an individual covered by the law

Employers with fewer than 50 workers are not subject to the FMLA or the CFRA, so they have no legal obligation to provide employees with a leave of absence or hold their jobs open simply because these workers are receiving FTDI benefits. Moreover, while the new program provides paid benefits to employees taking leave to care for a registered domestic partner or to care for a child born to a registered domestic partner, neither the FMLA nor the CFRA has been amended to guarantee employees the right to such a leave. Employees may be entitled to paid leave in these situations, but employers do not have to grant the leave or guarantee those workers a job once their leave is completed.

As with FMLA and CFRA leaves of absence, to be eligible for FTDI benefits, employers may require employees to provide medical certification showing that the leave is necessary. Additionally, an employee must verify that he or she is the only person who will be caring for a family member or domestic partner.

Employees are not eligible for benefits if they are also receiving other unemployment or disability benefits. And where an employee is eligible for FMLA and/or CFRA leave, any period of leave for which FTDI benefits are paid must be taken concurrently with FMLA and/or CFRA leaves.

Finally, employees must be off work for at least seven days before FTDI benefits are available and employers may require employees to use up to two weeks of earned vacation prior to receiving FTDI benefits. If an employer requires that an employee take earned vacation, up to seven days of the vacation leave may be applied to the seven-day waiting period.

Implications for Employers:

  • Because more workers will now take family leave, employers are likely to incur additional costs. For example, overtime costs will no doubt rise because those employees not out on leave will have to pick up the slack for their absent co-workers
  • Employers will face expenses relating to locating, hiring and training replacement or temporary workers.
  • There also will be additional costs for administering the program, such as verifying the medical reasons for the leave
  • It may be impractical for employers to verify that the employee is the only person who can care for a family member or domestic partner (employers may require a doctor’s certificate), or whether the ill person even is a family member or domestic partner (State law requires that both members of a domestic partnership file a Declaration of Domestic Partnership with the Secretary of State).

Employers should re-evaluate their leave policies and short-term disability plans in light of this new law.

Miscellaneous Information on Family Leave:

  • Employees are entitled to a maximum leave time of six (6) paid weeks within a 12-month period.
  • The law gives an employer the discretion (option) to require an employee to take up to two weeks of earned but unused vacation leave.
  • Employers cannot require the use of sick leave in lieu of vacation.
  • Paid Family Leave requires an increase of 0.08 percent (.0008) in the SDI contribution rate for calendar years 2004 and 2005. The cost of Paid Family Leave insurance will be incorporated into the base SDI contribution rate from 2006 and beyond.
  • A worker may not receive Paid Family Leave insurance benefits if he or she is also eligible for or already receiving State Disability Insurance, Unemployment Compensation Insurance, or Workers' Compensation.
  • To be eligible for PFL benefits, an employee must be able to provide documentation of a family member in need of care or of a new child.
  • An employee may file a claim for Paid Family Leave insurance benefits for the following reasons:
    • To care for a seriously ill child, spouse, parent, or domestic partner
    • To bond with the employee's new child or the new child of the employee's spouse or domestic partner
    • To bond with a child in connection with the adoption or foster care placement of the child with the employee or the employee's spouse or domestic partner.
  • To qualify for the minimum weekly amount ($50), an individual must have at least $300 in wages in the base period.
  • If an employee files a claim for PFL benefits, his or her employer is permitted by law to require the employee to use up to two weeks of unused vacation leave before receiving PFL benefits. (This option does not apply to sick leave.)
  • The weekly benefit amount will be approximately 55 percent of employee's base period earnings up to the maximum weekly benefit amount.
  • Consistent with the SDI program, sick leave wages are treated as wages. Paid Family Leave insurance benefits will be reduced by the amount of sick leave wages received, and may render the individual ineligible for benefits depending on the amount of sick leave wages received and the individual's weekly benefit amount.

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