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How the Paid Family Leave Law Works

Key components of the new law, from vesting to administration provisions.

September 18, 2003
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Related Topics: Employee Leave, HR & Business Administration
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Majority-party Democrats, pushed by labor, passed a paid family leave programthrough a divided California legislature. Business groups put up a strong fight,primarily over cost, but lost. One problem: they were battling a motherhood andapple- pie issue. The intent of the legislature was to provide incentives tofamily members to take up to six weeks off at more than half pay to care fornewborn or adoptive children, or provide care to ill parents or other relatives.Here, in a nutshell, are key components of the controversial new law.

Funding: Mandatory payroll deductions for the Family Temporary DisabilityInsurance program will begin January 1, 2004; benefits begin July 1, 2004.

Eligibility: About 13 million workers now paying state disability insurancewill be eligible to receive up to 55 percent of their pay for six weeks.Payments will range from $50 to $728 a week and not be taxed.

Vesting: Workers become eligible immediately upon taking a job, after aseven-day waiting period. Employers can require employees to use up to two weeksof vacation time before going on paid leave.

Coverage: Leave allowances will track the federal FMLA, providing time offfor the birth, adoption, or foster-care placement of a child, and for the careof a seriously ill child, spouse, parent, or domestic partner.

Administration: Processing claims and administering the leave program are theresponsibility of the state Employment Development Department, rather thanemployers.

Job Protection: Employees now covered by FMLA (firms employing 50 or moreworkers) receive the same job-protection guarantees they now receive with unpaidleave. Employers with fewer than 50 employees will not be required to hold jobsopen for workers on leave.

Workforce, January 2003, p. 41 -- Subscribe Now!

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