New Law Expands California's Paid Family Leave and State Disability Insurance
New Law Expands California's Paid Family Leave and State Disability Insurance

Approximately 15 years ago California became the first state to provide paid time off to workers to care for a new child or ailing family member.  The law, which is funded by required worker contributions, provides for up to 6 weeks of wage replacement in connection with certain qualifying events, which events include the temporary disability of an individual worker, caring for certain family members, bonding with a minor child within one year of

birth, or the placement of a child in connection with foster care or adoption.  This week Governor Jerry Brown expanded that law by signing Assembly Bill 908.

At the same time, Governor Brown authorized increases in California’s disability insurance program.  Specifically, AB 908 will revise the formulas used under the paid family leave and state disability law for determining benefits in a manner designed to increase the benefits commencing on January 1, 2018.  These increases are designed to raise the amount of wage replacement from the current of 55% of weekly wages to approximately 60% to 70% for most workers.  In addition, the bill will remove the 7-day waiting period to receive the benefits as of January 1, 2018.

AB 908 also includes a provision which requires the Employment Development Department to report to the Legislature and specified committees by March 1, 2021, on levels and trends regarding utilization, costs, and rates with respect to family leave and disability insurance.  Which may well mean further amendments to these laws in the near future.

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