As a business owner in California, there’s a lot you need to know to meet the requirements of the law, including those of the California Paid Family Leave program.
The good news is that there’s not much required of you when it comes to the California Paid Family Leave employer requirements. As long as you’ve got your payroll system set up to handle contributions to the program correctly and you have the right information available to employees, you should be set.
Not familiar with the California Paid Family Leave program? Here’s what you need to know.
What is the California Paid Family Leave program?
California Paid Family Leave is actually an insurance program run by California’s State Disability Insurance division.
It’s mandatory for all California employees, no matter the size of their employer.
Employees pay into the program and can receive 60-70% of their salary, up to $1,216 per week, for up to six weeks within any 12-month period. The exact amount depends on their salary.
The benefits apply if your employee takes time off to:
- Care for seriously sick family members, or
- Bond with a new child (birth, adoption, or foster).
That’s right: the program is employee-funded through payroll deductions.
This means even if you’re a small business that can’t afford to pay your employees while they’re on family leave, the California Paid Family Leave program gives your employees benefits if they’re eligible.
The employee contributions are made to the State Disability Insurance program, and the withholding rate for 2018 is 1%, with a maximum of $1,149.67 per employee each year.
Keep in mind that the California Paid Family Leave program applies to remote workers as well. So if you have an employee who lives in California, you must set up that employee’s payroll to follow California employment laws—even if your business is headquartered outside of California.
Okay, so what am I on the hook for?
Your obligation under the law is to let your workers know how the California Paid Family Leave program works and to make sure you withhold their contributions when you run payroll.
There are two pamphlets and an informational poster that you must provide to your team. You can get them from the California Employment Development Department for free.
These resources give your employees a chance to understand their California Paid Family Leave eligibility.
Here are some key facts:
- They need to have earned at least $300 that included withholdings for the State Disability Insurance program. SDI deductions are marked as CASDI on pay stubs.
- If they use the leave to care for an illness or injury, a healthcare professional needs to certify the claim.
- If they take leave for new child bonding, there needs to be proof of their relationship to the child. This proof can include a birth certificate, adoption records, or foster care paperwork.
- Claims must be filed with the State Disability Insurance program, and not with you. This can be done either by mail or by using the online portal.
Lastly, when employees make claims, you’re notified, and you need to respond to the state government with the information they ask for.
Are there any scenarios when I’m responsible for covering paid family leave?
Because the California Paid Family Leave is an employee-funded program, you aren’t legally required to contribute to paid family leave benefits—unless your employee is located in San Francisco.
San Francisco’s Paid Parental Leave Ordinance (PPLO) requires employers with 20 or more employees to supplement income for employees who are taking California Paid Family Leave to bond with a new child.
You’ll have to pay the difference between what your employee receives from the California Paid Family Leave program and 100% of their wages, up to the weekly maximum, for the 6-week leave period. In 2018, the total maximum weekly amount for both the California Paid Leave and San Francisco PPLO benefit is $2,027.
What does that look like in practice?
Let’s say Joyce, your San Francisco-based employee, makes $2,500 per week before taxes and goes on leave to bond with her new child.
The weekly maximum that Joyce can receive from the California Paid Leave program is $1,216. The San Francisco PPLO requires you to fill in the gap between that amount and $2,027, which means you would supply the additional $811 each week.
Your employees are eligible if:
- They work at least 40% of their total weekly hours in San Francisco;
- They have been employed by you for at least 180 days before the start of the leave period;
- They work for you for at least 8 hours per week in San Francisco; and
- They are eligible to receive benefits for bonding with a new child under the California Paid Family Leave program.
Can I require employees to take vacation time instead of claiming paid family leave?
Before allowing your employees to use their benefits under the California Paid Family Leave program, you can require them to use up to two weeks of their earned vacation time first.
Keep in mind, though, that you can’t ask them to use their sick leave. That’s a different story.
How does California Paid Family Leave work with other types of leave?
Both the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) require employers with 50 or more employees to allow eligible employees to take up to 12 unpaid weeks off to take care of themselves or family members without fear of losing their jobs.
The California New Parent Leave Act (NPLA) also requires employers with 20-49 employees to provide up to 12 weeks of unpaid, job-protected leave to employees who are bonding with a new child (birth, foster, or adoptive).
While the other types of leave are unpaid, your employees can claim their California Paid Family Leave benefits while they’re on FMLA, CFRA, and NPLA leave.
Make sure to stay up to date with federal, state, and local laws, and chat with an HR professional to make sure you’re compliant.