United States: Legislative Update: Governor Signs Paid Family Leave Proposal Into Law

On September 23, 2002, Governor Davis signed into law the nation's first paid family leave legislation (S.B. 1661) affecting millions of employees and employers alike across the state. The new law goes into effect on January 1, 2004.

The cost of premiums will be borne exclusively by employees throughout the state, while employers will bear the burdens of accommodating extended leaves of absence and lost productivity. Premiums will be deducted from employee pay checks similar to the State Disability Insurance premiums. Employees who take leave to aid a family member's serious medical condition, or to bond with a newborn, newly adopted or foster child, may make a claim for benefits in the amount of 55% of the employee's average weekly salary, up to $728.00 per week, for a duration of up to six (6) weeks in any 12-month period.

The employee seeking benefits must wait seven (7) days from the date he or she is first unable to work while caring for a family member before receiving

any benefits. In addition, an employee is not eligible for benefits when another family member is able and available to provide medical care during the same period of time as the employee. As a condition to receiving paid family leave, the employer may require that the employee take up to two (2) weeks of earned but unused vacation leave prior to the initial receipt of benefits under this law, but the first week of vacation period taken will count towards the initial seven-day waiting period for benefits.

Family members whose condition trigger benefits under this law include the child, parent, spouse or domestic partner of the employee. Employers may also adopt, subject to the approval of the state, paid family leave plans that provide for greater benefits than the statutory minimum provided under this new law. Any paid leave taken by the employee under this new law runs concurrently with any unpaid leave taken under the California Family Rights Act or the federal Family Medical Leave Act, both of which apply only to employers with 50 or more employees.