At a ceremony on April 11, Governor Jerry Brown signed a bill increasing the amount workers would earn while on paid family leave. The news fell on the fifteenth anniversary of the state’s first paid leave law, the first in the U.S.
Effective January 1, 2018, workers earning up to $108,000 annually will be entitled to 60 percent of their wages for up to six weeks while on leave. Individuals earning close to minimum wage or less will receive 77 percent of their pay while on leave. Benefits are capped at $1,100 a week.
While the duration of paid leave permitted is not new, the respective percentages are—the original law had entitled employees to a flat rate of 55 percent. California’s income-specific model marks a new, nuanced approach to statewide paid leave. The state’s program is paid exclusively by employees through recurring payroll deductions. The expanded benefits are expected to cost $587 million per year by 2021.
San Francisco employers could be an unexpected beneficiary of the new law. That city recently passed an ordinance mandating fully paid leave, with businesses shouldering whatever percent of wages is not covered by the state.
With states acting at a blistering pace on workplace issues in 2016, the legislation is unlikely to be the last of its kind this year.
Andy Przystanski is Content Marketing Manager at Namely, the all-in-one HR, payroll, and benefits platform built for today's employees. Connect with Andy and the Namely team on Twitter, Facebook, and LinkedIn.
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