California Paid Family Leave: What Employers Should Know

The California Paid Family Leave (CA PFL) program provides partial wage replacement to eligible employees who take leave for a qualifying event. CA PFL is available to eligible employees who have paid into the State Disability Insurance program and have experienced wage loss while providing care for a family member, bonding with a new child, or have a qualifying event due to a family member’s military deployment.

However, California PFL is not job-protected leave. Other leaves offered by the state, as well as the federal Family and Medical Leave Act (FMLA), offer unpaid, job-protected leave. Employers should let an employee know about what types of leave are available and follow applicable notice requirements.

How Is the California PFL Program Funded?

Paid Family Leave in California is funded by employee contributions through mandatory payroll deductions to the State Disability Insurance (SDI) program. The contribution rate can change from year to year depending on factors such as the balance in the SDI fund and the amount of wages paid. As of Jan. 1, 2024, the contribution rate is 1.1%.

Who Qualifies for California PFL?

Individuals might qualify to receive paid family leave benefits in California if they are part- or full-time employees who have earned at least $300 in the 12-month base period of the claim, had deductions withheld from wages for the SDI program, and lost wages because they were:

• Bonding with a new child (includes newly fostered and adopted children)
• Providing care to a seriously ill family member*
• Involved in an event related to a family member’s military deployment to a foreign country

A self-employed individual can qualify for benefits if they have contributed to the Disability Insurance Elective Coverage Program during the prior 18 months.

Note: Citizenship and immigration status, as well as length of time spent on current job do not impact eligibility for the paid family leave program.

*A serious health condition is described as illness, injury, physical and mental condition that results in impairment, in-patient hospital or hospice care, or continuing treatment under the care of a doctor or medical practitioner. A family member is defined as a parent, child, spouse, registered domestic partner, sibling, in-law, grandchild, or grandparent.

What Benefits are Available Under CA PFL?

California Paid Family Leave provides benefits for up to eight weeks of leave in a 12-month period, and an employee’s PFL does not have to be taken all at once. Through 2024, eligible employees can receive between 60% to 70% of their weekly wages, with the weekly amount capped at $1,620. Beginning in 2025, the maximum weekly amount is expected to remain $1,620, but the benefit rate will change as follows:

• Lower wage earners will receive up to 90% of their average weekly wages
• Higher wage earners will receive up to 70% of their wages

Is There a Private Plan Exemption to CA PFL?

Under the California Unemployment Insurance Code, contributions to the State Disability Insurance program are mandatory, with two exemptions:

• An employer or a majority of the employees may apply for approval for a Voluntary Plan to replace SDI coverage, or
• If an employee’s religious beliefs require them to depend solely on prayer for healing, they may apply for a religious exemption under SDI.

A Voluntary Plan can offer short-term disability insurance to provide wage replacement when on leave for qualifying reason. If a business applies for an exemption to use a Voluntary Plan, the plan must:

• Offer the same benefits as SDI
• Not cost employees more than SDI
• Offer at least one benefit that is better than SDI
• Stay updated to match any increase in benefits that legislative or regulatory action mandates SDI to implement

Looking Forward

Businesses seeking to enhance their recruitment and retention efforts while looking to help maintain the well-being of employees could use a mix of benefits. Paychex also can track employees' time off and provides HR Services to help businesses.

Additional Resources

• California PFL website
• California PFL Eligibility FAQ