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:
http://www.edd.ca.gov/direp/dipub.htm).
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 -
see
definition in California Family Code, Section 297. Employers may be able to
require evidence of the filing).
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.
