On June 27, 2019, Governor Gavin Newsom signed Senate Bill 83 (“SB 83”) into law. The law, which goes into effect July 1, 2020, extends the maximum duration of Paid Family Leave (“PFL”) benefits employees may receive from California’s State Disability Insurance (“SDI”) program from six to eight weeks.
Employees continue to be able to use PFL benefits to:
- care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner; or
- bond with a minor child within one year of the birth or placement of the child via foster care or adoption.
By November 2019, the governor must also submit a proposal to increase PFL duration “to a full six months by 2021–22.” The required proposal will be limited to child bonding purposes, and “six months” represents the total duration of leave, if two parents claim PFL benefits. The governor must also consult a task force (to be created), which itself must “consult with representatives from employer groups, labor, early education representatives, other employment experts, and the Legislature when developing the proposal.”
These changes to PFL are only the beginning; the new law also requires the governor to assess and address:
- Increasing wage replacement rate up to 90% for low-wage workers. Today, California PFL provides wage replacement of approximately 60 to 70%, depending on an individual’s income.
- How to fund expand PFL benefits. SB 83 separately decreases the worker contribution rate, meaning the state will decrease the amount held in reserve to fund the program. The governor’s proposal must address a plan to implement and fund this new initiative.
- Built-in job protections for employees. Currently, California PFL does not independently provide employment protection for employees who are absent from work. Job protection is provided by other enactments including the federal Family Medical Leave Act, the California Family Rights Act, or the state New Parent Leave Act.
What Employers Can Do Now
Although the new law takes effect on July 1, 2020, California employers should start getting prepared now. Note that expectant parents can begin notifying their employers of their PFL plans in reliance on SB 83 as early as the January 1, 2020. Employers should therefore quickly begin reviewing leave policies, related procedures and practices, including parental or other paid leave benefits. SB 83 should trigger review of existing employee handbooks.
SB 83 may trigger local responses, too. San Francisco employers should monitor activity of the Board of Supervisors to see whether, and how, the Board may amend the local Paid Parental Leave Ordinance in response to these state-level changes. Additionally, companies with Los Angeles operations should monitor activity of the Los Angeles City Council, which is currently exploring the adoption of an ordinance similar to San Francisco’s, and which may require employers to provide up to 18 weeks of supplemental compensation to employees receiving SDI or PFL benefits prior to the birth of a child, for recovery from birth, and for new child bonding.
The trend to provide PFL is growing. California was the first state to create a paid leave program, which went into effect fifteen years ago. Since then, seven other states have adopted similar programs, most offering more leave than California. For example, Massachusetts offers 12 weeks, and both New York and New Jersey will soon provide 12 weeks. Beyond SB 83, the table is set for California to continue to even further expand PFL, and employers should anticipate the state doing so.
If you have any questions, now is the time to reach out to your employment counsel or HR professional. Dunn DeSantis Walt & Kendrick provides experienced guidance in the area of employment law and risk management.
