California is one of the few states that has a paid family leave program (PFL), in additional to disability insurance, that allows parents and caregivers to provide care for a new child, or for a seriously ill family member. Last year’s budget extended the duration of the leave from six to eight weeks – with the change due to take effect on July 1, 2020. Despite this, the current program has some well-known flaws. Low-wage workers use PFL at around one-third the rate of higher earners. This is, in part, because it only provides 70% wage replacement for low-wage workers, many of whom cannot afford to take a 30% cut in their earnings. California’s PFL program also does not provide job protection for workers who use it, which may also lead to reluctance by workers to take the leave that they have already paid for through a mandatory wage deduction. Because of these differential rates of use, in effect low-wage workers are subsidizing their higher wage colleagues’ PFL.
Last year, a task force commissioned by Governor Newsom developed a series of recommendations to improve the program. These included (i) ensuring that all Californians who take PFL have their jobs protected while supporting small businesses to facilitate workers to take the leave, (ii) increasing wage replacements rates for PFL (and the state disability insurance program) so that low-wage workers can afford to take the leave, (iii) increasing benefits duration and coverage, and (iv) addressing existing gaps in who can use the PFL program. These recommendations were provided to the Governor and legislature in December and may have been the motivation behind the call in his January Budget Proposal to “extend job protections to more employees, thereby expanding the number of families that can take advantage of this benefit.”