Farm Employers Labor Service

Farm Employers Labor Service

California Becomes First State to Provide Paid Family Care Leave
©Copyright 2002,Orrick,Herrington &Sutcliffe LLP. All Rights Reserved.

Overview
Key Provisions
Effective Dates
Other Key Provisions of the Legislation
Notice to employees
One-week waiting period
Requiring use of accrued vacation time
Coordination with FMLA and CFRA leave
Reinstatement rights
Voluntary plans

Overview

In legislation signed by Governor Davis on September 23, 2002, California will become the first state in the nation to provide workers paid family care leave.

Key Provisions:

The legislation creates, within the state disability insurance program ("SDI"), a family temporary disability insurance program to provide up to six weeks of wage replacement benefits ("family care benefits") to employees who take time off work to care for a child, spouse, parent, or domestic partner with a serious health condition, or to bond with a new child. The program is financed entirely by an increase in employee payroll contributions to the SDI fund.

Effective Dates:

Employees will begin paying into the fund on January 1, 2004, and will be eligible for family care benefits starting July 1, 2004. On average, employees will pay about $27 extra per year into the SDI fund to support family care benefits. Participating employees will be eligible for up to six weeks of family care benefits over a 12-month period, at rates up to 55 percent of the employee’s wages. The program will be administered by the California Department of Employment Development ("EDD").

Other Key Provisions of the Legislation

Eligibility for family care benefits: Employees are eligible for family care benefits if they provide a certification to the EDD establishing that either: (1) a "serious health condition" of a child, parent, spouse, or domestic partner "warrants the participation of the employee to provide care," or (2) the employee is taking leave for reason of the birth or placement of a child of the employee or the employee’s domestic partner, and the leave is taken within one year of the birth or placement. "Serious health condition" is given the same definition as contained in the California Family Rights Act ("CFRA"). Situations that "warrant the participation of the employee to provide care" include providing psychological comfort and arranging third party care for the family member, as well as directly providing or participating in medical care. However, an employee is not eligible for family care benefits for any day that another family member is able and available to provide the required care.

Notice to employees: The EDD is required to develop a notice informing workers of their rights to disability insurance benefits, including family care benefits. Employers must provide this notice to all employees hired after January 1, 2004, and to each employee leaving work on or after July 1, 2004 due to pregnancy, non-occupational injury, or illness, or to care for a family member.

One-week waiting period: The first seven consecutive days of leave taken for family care are deemed a "waiting period," during which no benefits are payable.

Requiring use of accrued vacation time: An employer may require an employee to take up to two weeks of accrued but unused vacation leave prior to the employee’s initial receipt of family care benefits. If the employer requires an employee to take vacation leave, the vacation leave must be applied to the one-week waiting period.

Coordination with FMLA and CFRA leave: The legislation specifies that employees who are entitled to leave under the Family and Medical Leave Act ("FMLA") or the CFRA must take family temporary disability insurance leave concurrent with their FMLA and/or CFRA leave.

Reinstatement rights: The legislation does not independently create any right to reinstatement upon the expiration of family care leave. To the extent otherwise applicable, reinstatement rights are governed by other laws, such as the FMLA, the CFRA, and the pregnancy disability leave law.

Voluntary plans: An employer may offer employees a voluntary plan (VP) in place of SDI coverage. A VP must provide all the benefits of SDI and at least one benefit that is better than SDI. The EDD must approve the VP and the majority of the employees must consent to it well before an employer can implement the VP.

Sections of this article were written by Orrick, Herrington & Sutcliffe LLP's Employment Law Department, which counsels and represents employers in the full range of employment and labor law. For more information, please go to www.orrick.com.

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