The Expanded CA Paid Family Leave Act

Beginning July 1, 2020, the CA Paid Family Leave Act (PFL)will see an expansion that will once again set the bar for other states to follow. 

When it was passed, the CA Paid Family Leave Act was the first legislation of its kind to offer paid leave to those who took time off work to care for seriously ill family members or to bond with a new child. Since then, New Jersey, Massachusetts, New York, Washington, Rhode Island, and the District of Columbia have passed similar legislation to compensate workers who take time off under these circumstances. 

PFL - Current Limits

Currently, California residents are entitled to compensation during leave from where they are caring for a seriously ill family member. By definition, this includes a parent, child, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner. They may also do so to bond with a new child, whether the child enters the family via foster care, adoption or birth. These benefits include partial pay for up to 6 weeks, administered by the Employment Development Department. 

PFL - New Benefits

Beginning July 1, 2020, the CA Paid Family Leave Act will extend its maximum leave duration from 6 to 8 weeks. If there are two caregivers, each who take off 8 weeks in turn to care for a family member or new child, the family as a whole has the potential to benefit from four months of paid leave. California's governor Gavin Newsom has plans to expand CA Paid Family Leave Act benefits in the future to allow caregivers to benefit from a potential six months of paid leave, when taken in turn. 

Things to consider

Like any legislation of this type, there are other factors for HR professionals to consider. Many employers have opted to make up the difference in salary for employees taking leave under the CA Paid Family Leave Act. The expansion of benefits from 6 to 8 weeks may unintentionally discourage employers from following suit. 

Currently, the CA Paid Family Leave Act benefits are well funded through the state's temporary disability insurance program. As the state continues to expand benefits, payroll taxes may be the first area tapped to fund any expansion. Currently, California's payroll tax rate is 1.0 percent of the first $118,371 in wages.  As it is currently written, the law authorizes a tax rate of up to 1.5 percent. Analysts expect an increase to 1.1 percent as early as 2020 in order to fund expanded benefits for more workers, with additional increases possible in future years.