Governor Signs Paid Family Leave Bill

Apr 13 2016 - Paid Family Leave - Gail Cecchettini Whaley

BabyBondingThis week, Governor Brown signed AB 908 which, beginning January 1, 2018, increases the amount of Paid Family Leave (PFL) benefits an employee can receive.

Background

PFL is a state-sponsored insurance program within the State Disability Insurance (SDI) program. PFL provides employees with partial wage replacement for up to 6 weeks in any 12-month period while absent from work to care for a seriously ill or injured family member or to bond with a minor child within one year of the child’s birth or placement in connection with foster care or adoption.

As with SDI, PFL is administered by the Employment Development Department (EDD), and employees apply directly to the EDD for benefits. PFL is funded by worker contributions; if you withhold SDI contributions from employees’ paychecks, you are also withholding for PFL.

PFL does not create the right to a leave of absence — it is merely a wage replacement program that the employee can use when he or she is already on an employer approved leave of absence, such as FMLA/CFRA leave. PFL does not require you to create a leave of absence policy. It simply allows the employee to receive benefits from the state if already out on an approved leave.

AB 908 Increases Benefit Amount

So what does the new bill do?

Currently, an individual’s weekly PFL benefit amount is 55 percent of their earnings (up to a maximum weekly benefit amount).

Under the new law, the level of wage replacement benefits will increase in 2018 to either 60 percent or 70 percent, depending on the employee’s income. There will still be a maximum limit on the amount.

The new law will also remove the current seven-day waiting period that exists before an employee is eligible to receive PFL benefits beginning January 1, 2018.

As previously mentioned, PFL is funded by worker contributions so this bill does not affect employer contributions. It also doesn’t mean that an employer has to provide a leave when it is not required to do so either by law or by the employer’s own policy.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Members can find out more information on Paid Family Leave, including employer guidance, in the HR Library. Not a member? See how HRCalifornia can help you.

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