California Increases Paid Family Leave Rates Statewide

On April 11, 2016, California Governor Jerry Brown signed Assembly Bill 908, which passed the state legislature earlier this year by a wide margin, expanding employee benefits under California’s Paid Family Leave.

California enacted the first Paid Family Leave (PFL) program in the nation in 2002. The PFL law, which went into effect in 2004, set up a scheme for all California employees to receive a portion of their salary while out of work caring for a new child or ill family member. The PFL program, which is funded entirely through payroll taxes assessed by the state, currently pays 55 percent (up to a maximum weekly amount) of an employee’s base salary when they need to take time off from work for qualified reasons.

When effective, Bill 908 will increase the benefits level to 60 percent for those employees who make more than 33 percent of the California average weekly wage, and up to 70 percent for those making less than 33 percent of the average weekly wage. The new benefit levels will go into effect on January 1, 2018.

The PFL law applies to all employees who are covered by State Disability Insurance. There is no required minimum number of hours worked, or days employed, in order for an employee to qualify for benefits. PFL provides for up to six covered weeks of pay assistance within a twelve-month period, and can be used in any increment, but employees must wait the full seven day waiting period before receiving PFL benefits.

The full text of the Bill 908 is available here.

Although the new benefit level increases will not immediately take effect, employers should remain aware of local ordinances that may require employers to compensate employees in addition to the PFL amounts paid by the state.

For more information regarding the expansion of paid family sick leave, see our recent briefings San Francisco Passes Paid Parental Leave Ordinance; New York & California Legislation Update: NYC Amends Pack Sick Leave Rules, New York Budget Includes Paid Sick Leave and Wage Minimum Increases; California Enacts Minimum wage. For more information about employer obligations under California’s paid sick leave laws, see our briefings California Enacts Paid Sick Leave Law and New Changes to the California Family Rights Act.