California Revises Formula for Paid Family Leave and State Disability Insurance Benefits

By Susan E. Groff © Jackson Lewis October 3, 2022
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california capitol building in sacramento

After vetoing a similar bill last year, on Sept. 30, California Gov. Gavin Newsom signed Senate Bill 951, which increases wage replacement rates for low-wage earners under the state Paid Family Leave program (PFL) and the State Disability Insurance (SDI) program.

Starting in 2025, workers who earn 70 percent or less of the state's average wage will be eligible for 90 percent of their regular wages under the PFL and SDI programs. Currently, low-wage earners may be eligible for 70 percent of their regular wages under these programs.

Though PFL and SDI are state benefits, employees can apply for the benefits while on unpaid leaves, such as under the California Family Rights Act (CFRA) and the federal Family Medical Leave Act (FMLA). As such, this increase in the state benefits formula may make unpaid leaves for low-wage earners more palatable, as it will mean a less significant loss of income.

Earlier this year, California also started a grant program to assist small businesses with the costs associated with employees on leave under the Paid Family Leave program, such as expenses incurred in training existing staff or hiring temporary employees during employee leaves.

Susan E. Groff is an attorney with Jackson Lewis in Los Angeles. © 2022. All rights reserved. Reprinted with permission.

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