Alert: Employees May Obtain State Family Leave Payments Beginning July 1, 2004
June 29, 2004
Effective July 1, 2004, California's paid family leave program will provide partial wage replacement for time taken off from work to bond with a new child or to care for a seriously ill child, spouse, parent, or domestic partner. Although paid family leave benefits will be funded exclusively through mandatory employee State Disability Insurance ("SDI") contributions and not through employer-provided payments, employers should be aware of what are (and what are not) their obligations under the program.
The program has been 100% funded by employee payroll deductions which began January 1, 2004. The Employment Development Department ("EDD") is responsible for the program's administration. The benefits will provide up to 55% of weekly lost wages, with a cap of $728 per week in 2004. Next year, the cap will be $840 per week. The monetary cap will thereafter increase annually based upon that average wage increase within California.
The benefits begin after the first seven days of the qualifying leave. Employers may mandate that employees exhaust up to two weeks of accrued vacation leave before receiving benefits, provided that they do not disregard any collective bargaining responsibilities in so doing. The same option does not apply, however, to accrued sick leave. Workers may receive these benefits for a maximum of six weeks over a twelve month period.
Employers should appreciate that this program creates no new obligations to grant leaves of absence. Employees with less than one year of tenure or employers with fewer than 50 local employees may not be covered by mandated leave laws such as the Family Medical Leave Act. This new program purports to merely grant employees a right to receive payments when they are on leaves granted by their employers. Of course, employers should consult an employment attorney before denying leaves due to medical conditions of employees or their families.
For employers, the new law creates additional obligations to educate new and existing employees about their legal rights. Employers are obliged to provide a brochure explaining paid family leave (available from the EDD) to new employees and to employees who request the type of leave covered by the program. Employers are not, however, required to provide employees with claim forms. Because EDD regulations concerning the paid family leave insurance program are currently under review, employers should stay apprised of the status of these regulations, as they will likely provide additional guidance in this area.
For more information about this or other employment-related matters, please contact Doug Dexter at (415) 954-4409 or at ddexter@fbm.com, or any member of the Farella Braun + Martel Employment Practice Group.