California revises formula for paid family leave and state disability benefits

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

Starting in 2025, workers earning 70% or less of the average state wage will be eligible for 90% of their normal wage under the PFL and SDI programs. Currently, low-income people can qualify for 70% of their regular salary under these programs.

Although PFL and SDI are state benefits, employees may request these benefits while on unpaid leave, such as under the California Family Rights Act (CFRA) and statute. Federal Family Medical Leave (FMLA). As such, this increase in the state benefit formula may make unpaid leave for low earners more palatable, as it will mean less loss of income.

Earlier this year, California also launched a grant program to help small businesses with costs associated with furloughed employees under the paid family leave program, such as expenses incurred to train existing staff or hire temporary employees during employee holidays.

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

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