California Paid Family Leave Program Offers Grants for Employers to Offset Costs

California businesses that might have had to make do with staffing shortages when employees take leave for emergencies or caring for family can tap into an additional funding source; grants through the California Paid Family Leave (PFL) program.

What Businesses Qualify for California PFL Grants?

Businesses with 1 to 100 employees in California that have at least one employee who was on or is on PFL on or after June 1, 2024, can apply for a grant – $1,000 per employee for businesses with 51 to 100 employees and $2,000 per employee for those with 1 to 50 employees – if they meet additional eligibility requirements.

• They are registered to do business in California.
• They have active status with the California Secretary of State’s office.
• They have an active California Employer Account Number.

The grant period is June 1, 2024, to May 31, 2026, or until funds are exhausted.

Some businesses using a Professional Employer Organization (PEO) might be ineligible for the grants. A small business whose PEO’s California Employer Account Number (CEAN) is used to pay state unemployment insurance (UI) taxes for the business’s employees is ineligible for the grants. If the company’s CEAN indicates they pay into the CAUI tax for its own employees, then they might be eligible.

Note: Paychex PEO reports using the individual client CEAN.

Grants are made possible by funding from the California Labor and Workforce Development Agency and the California Employment Training Panel.

How Can California PFL Grants Be Used?

The grant money is intended to defray the associated costs when an employee takes leave, such as recruitment and hiring, as well as training a new employee or cross training an existing one. In fact, one of 16 questions on the online application is: How do you intend to use the funds from the PFL grant?

How Can Businesses Apply for California PFL Grants?

The California Paid Family Leave Grant application is available online and should take less than 20 minutes to complete. In addition to some company information (e.g., address, email, etc.), the process will move more quickly if you have your California Employer Account Number, your North American Industry Classification System (NAICS) code, the 10-digit EDD Customer Account Number of the employee taking leave, and the date the employee went on California paid family leave.

Looking Forward

Eligible employers should evaluate their circumstances to determine if they can apply for a grant. Paychex continues to monitor the legislative and regulatory landscape in California and can provide additional support to help your business with its HR needs.