Millions of California workers will see increased family leave benefits under new law

As a physician at the Sacramento County Health Center, Dr. Sharad Jain said he has watched as patients and their family members have been forced to choose between providing for their loved ones financially and staying at their bedside to care for them.

“These are situations that, at the moment, for low-income workers, there is no good answer,” Jain said. “It just feels very unfair.”

A new law signed by Gov. Gavin Newsom on Friday aims to alleviate that burden for millions of workers across California.

Twenty years after California became the first state in the nation to offer paid family leave, Newsom signed Senate Bill 951 into law to boost the portion of a worker’s salary that would be covered should they choose to take time off work to bond with a new child or care for a sick family member.

“California families and our state as a whole are stronger when workers have the support they need to care for themselves and their loved ones,” Newsom said in a statement. “California created the first Paid Family Leave program in the nation 20 years ago, and today we’re taking an important step to ensure more low-wage workers, many of them women and people of color, can access the time off they’ve earned while still providing for their family.”

The new law will extend the state’s current wage replacement rates through 2024 and increase them starting on Jan. 1, 2025, from 70% to 90% for low-wage workers earning less than $57,000 a year and from 60% to 70% for all other eligible workers.

Proponents of the bill argued that California’s program failed the state’s lowest wage earners. The payments rates were so low, they said, that it was not economically feasible for them to take part in it.

“People should never have to make that choice between taking care of a member of the family or being able to stay at home with your newborn and putting food on the table,” said Sen. Maria Elena Durazo, D-Los Angeles, the author of SB 951. “What I expect now is that families will be able to stay together, help each other, bond and nurture and all of the things we first envisioned when this was first passed 20 years ago.”

In 2020, 37% of workers earning less than $20,000 a year were eligible for paid family leave yet only 14% used it — a significantly lower rate of participation than their medium and high-wage earning counterparts, according to an analysis from the California Budget and Policy Center.

For a worker making $15 an hour, a handful of other states offer higher wage-replacement rates than California, including Colorado, New York and Oregon, where they would receive nearly double the amount of money they’d get in the Golden State.

Last year, Newsom vetoed a similar plan to strengthen the state’s paid family leave program, citing budget constraints. There was an elevated sense of urgency this time around, since the current wage replacement rates were set to expire at the end of the year. Without Newsom’s signature, the replacement rate was slated to slip to 55%.

To fund the expected increase in program costs, the new regulation removes a contribution ceiling for workers earning annual salaries of more than $145,000.

The majority of California’s 18.5 million workers contribute to the state’s paid family leave and state disability insurance programs through 1.1% payroll deductions and are eligible to take up to eight weeks of paid leave. Since the program took effect in 2004, $10.6 billion in benefits have been distributed across 3.7 million claims, according to state data.

The expansion of California’s program was celebrated by labor unions and advocates.

Sonja Diaz, founding director of the UCLA Latino Politics and Policy Institute, called the measure a “common sense, data-backed reform” that aims to remedy a gap that disproportionately affects families of color.

Tia Orr, executive director of SEIU California, said it marked a step in the state’s “journey toward racial, gender and economic equity.”

In California, Latino workers make up nearly 38% of the state’s overall workforce and the majority of the state’s low wage earners, according to data from the U.C. Berkeley Labor Center.

“This is a victory for every hard-working mom and dad, for every son, daughter, sister, and brother in our communities who put our families first,” Orr said in a statement. “Bonding and caregiving will no longer be a privilege for the few.”