Today, Governor Jerry Brown signed into law Assembly Bill 908, which increases the level and duration of benefits provided in the Paid Family Leave (PFL) and State Disability (SDI) insurance programs. The law also removes the 7-day waiting period normally required for these benefits. The law goes into effect January 1, 2018.
More specifically, AB 908 revises the formula for determining benefits available under California’s unemployment compensation disability and family temporary disability insurance programs. Under the revisions, the wage replacement rate for PFL and SDI benefits are increased from 55% to:
1) Seventy percent for those who make up to 33% of the California average weekly wage.
2) Sixty percent for those who make more than 33% of the California average weekly wage.
The law is intended to address the inadequacy of the current PFL and SDI’s 55% wage replacement rate, particularly for lower income workers, who have extremely low utilization for both SDI and PFL when compared to workers with higher wages.
California’s Paid Family Leave was enacted in 2002 to extend disability compensation to individuals who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new minor child. The PFL program provides a cash benefit set at a percentage of “base period” wages for up to 6 weeks, which a current maximum weekly benefit of $1,104 (adjusted annually).
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