Yesterday, California Governor Jerry Brown signed Assembly Bill 908 (“AB 908”). This new bill increases the amount of weekly benefits payable to employees who take leave under California’s existing paid family lave law.
California’s existing paid family leave law allows an employee to request paid leave to care for a family member with a “serious health condition” or to bond with a new child. While on leave under existing law, an employee receives 55% of his or her usual salary, up to a maximum of $1,129/week, for a period of up to 6 weeks. These benefits are paid for by employees through mandatory payroll deductions payable to the state’s SDI program. The benefits begin after a 7 day waiting period.
Under the new law AB 908, the state will increase the weekly benefit amounts to employees who go out on paid family leave starting on January 1, 2018. The amount of the increase in benefits will be determined by the employee’s income. An employee earning below about $20,000/year will now receive 70% of his or her usual salary. A higher income worker will receive 60% of his or her usual salary, up to a maximum benefit of around $1,260/week.
(Note: These numbers are estimates because the income threshold and maximum benefit amounts are tied to the state’s average weekly wage, which changes every year. In addition, the new law states that the maximum benefit “shall not exceed the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.” This number also changes every year based on the state’s average weekly wage. So the actual threshold number and weekly maximum benefit amount for 2018 cannot be known until January 1, 2018. You can find a chart showing existing 2016 maximum benefit amounts here.)
Finally, AB 908 will eliminate the 7 day waiting period so that these increased benefits become payable immediately.