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California Paid Family Leave Law Is First in the Nation

California Paid Family Leave Law Is First in the Nation
  • October 3, 2002

It is important to note that since the California paid leave bill will not apply to new leaves of absence until July 2004, employers will have ample time within which to revise policies and procedures to comply. Additionally, it should be noted that employers do not have to "pay" employees for leave. Rather, the paid benefit is through already mandated state disability insurance, and employees are taxed via payroll deduction for the new disability benefits. Also, the bill does not impact employees who are absent from work due to their own serious health condition. They are already entitled to state disability insurance benefits.

California Senate Bill 1661: Paid Family Leave / Mandated Benefits

Purpose: To provide state disability insurance compensation for any individual who is unable to work due to the need to care for a seriously ill child, spouse, parent, or domestic partner, or for the birth, adoption, or foster care placement of a new child. Employees who are absent from work due to their own serious health conditions are already eligible for state disability insurance.

Effective date: The act becomes effective January 1, 2004. Benefits are payable for periods of family temporary disability leave commencing on or after July 1, 2004.

6 weeks wage replacement: Establishes, within the state disability insurance program, a family temporary disability insurance benefit program to provide up to 6 weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new child.

Employee contributions: Provides the benefits through additional employee disability insurance tax contributions.

Employer's right to require employee to use vacation leave: Authorizes employers to require that employees utilize up to 2 weeks of earned but unused vacation leave prior to that employee's receipt of these additional benefits, as provided.

Application to collective bargaining agreements: Specifies that these provisions may not be construed to relieve an employer of any collective bargaining duties.

Press release issued by the Office of Governor Davis:

First-of-Its-Kind Legislation Will Make Family Leave More Family-Friendly

Governor Gray Davis today signed historic legislation to extend disability compensation to cover individuals who take time off of work to care for a new child or to care for a sick or injured family member.

"Californians should never have to make the choice between being good workers and being good parents," Gov. Davis said. "This is groundbreaking legislation. This bill will help millions of California workers meet their responsibilities to both their families and their employers. It sends a message around the world that California is pro-worker, pro-employer and pro-family."

SB 1661 by Senator Sheila Kuehl (D-Santa Monica) establishes the Family Temporary Disability Insurance program within the existing Disability Insurance program. This new program will expand disability coverage to individuals who demonstrate to a physician the need to take time off from work to care for a sick or injured family member, or for the birth, adoption, or foster care placement of a new child.

Studies show that three out of four workers who need to take Family Leave choose not to because they can't afford go without a paycheck. This bill will aid families in balancing the demands between the workplace and home, reduce employee turnover by allowing paid job-protected leave and increase employee morale.

"This bill will make it easier for Californians to help their loved ones through a health crisis, without going broke in the process," added Governor Davis.

Under current law, the DI program provides disability payments to an eligible individual who is unable to perform his or her customary work due to a non-industrial injury, illness, or pregnancy.

Under SB 1661, beginning July 1, 2004, workers will be allowed to receive up to six weeks of paid leave per year to care for a seriously ill child, spouse, parent or domestic partner or to bond with a new child.

SB 1661 creates the Family Temporary Disability Insurance program that will be 100-percent funded by employees through the State Disability Insurance system. Key provisions of the bill include:

  1. A one-week waiting period before workers can apply for the program;
  2. Employers can require employees to use up to two weeks of unused vacation time before receiving paid leave;
  3. Payments are capped at six weeks over a 12-month period and at 55 percent of wages, up to an annually-adjusted maximum.

As in the original federal and state Family Leave laws, small businesses with less than 50 employees are not required to hold a job open for a worker on leave.

©2002 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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