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California Gets Paid Family Leave Law

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NU Online News Service, Sept. 23, 10:22 p.m. – California Gov. Gray Davis, a Democrat, today signed S.B. 1661, a bill that makes California the first U.S. state to require affected employers to provide paid leave for employees who take time off work to care for a new child or a sick or injured family member.

The bill, introduced by Sen. Sheila Kuehl, D-Santa Monica, Calif., expands the state’s existing disability insurance program by creating the Family Temporary Disability Insurance Program.

Starting July 1, 2004, employees of companies with 50 or more workers who can show that they need to take time off to care for family members, or to attend to the birth, adoption or foster care placement of a child, will be eligible for up to six weeks of paid leave per year.

Employers can require employees to use up to two weeks of unused vacation time before receiving paid leave, and, in the year the new law takes effect, payments will be capped at a maximum of 55% of wages. But Davis issued a statement contending that the new law will make a big difference in many employees’ lives.

“Californians should never have to make the choice between being good workers and being good parents,” Davis said in the statement. “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.”

Under the current law, the state disability insurance program provides disability payments only for employees who are unable to work due to pregnancy, illness or off-the-job injuries.

Employers will be responsible mainly for holding employees’ jobs open while they are on leave. Employees themselves will fund the new benefits through the state disability insurance system, according to California officials. Employees now pay a premium equal to 0.9% of their wages, up to $46,300 per year, to participate in the program.

State officials estimate the new law will cost employees who participate in the program about $73 million in increased disability contributions during the first 12 months the program is in effect.

The state disability insurance program covers a majority of the state’s workers, or about 13 million people, according to a report prepared by the California Office of Senate Floor Analyses. Employees who are exempt include employees of nonprofit agencies, employees of religious institutions and many government employees. Some other employees are covered through private disability plans that are required by state law to offer benefits that are comparable to or richer than those offered by the state program.

Many large labor, religious and advocacy groups have supported S.B. 1661, but the California Chamber of Commerce, Sacramento, Calif., and other large employer groups have opposed it, arguing that it will drive up costs for employers and workers at a time when the job market is already shaky.

The state Senate passed an early version of the bill 22-15, and the Assembly passed the bill 46-31.

More information about the bill, including the full text and legislative history, is available at