Davis Signs California Family Leave Bill

September 23, 2002 (PLANSPONSOR.com) -California's Governor Gray Davis signed a sweeping family leave bill into law today, making it the first state with such a law allowing most workers to take paid leave to care for a newborn or sick family member.

The legislation is also seen as a model for other states since California is often a bellwether for developing national trends.

Under the measure, which was written by Sen. Sheila Kuehl (D-Santa Monica), most workers will be paid about 55% of their salary for six weeks of leave for a new child or sick relative.

The program will expand the state fund providing insurance for disabled workers but will be funded entirely by employee payroll deductions, averaging about $26 a year. About 13 million of California’s 16 million workers would be eligible, according to the Times story.

Unions Jubilant

Labor unions and women’s groups across the country hailed Davis’ decision to sign the bill, according to the Times.

“This is a tremendous victory,” said Karen Nussbaum, assistant to AFL-CIO President John Sweeney in Washington, D.C., and an activist involved in the fight for paid family leave for more than 20 years. “It was a huge effort on the part of the labor movement.”

Business groups, which had battled against the bill during its trek through the legislature, denounced the governor’s decision. (See  California Family Leave Proposal Moves Forward ).

The California Chamber of Commerce led a coalition of groups that tried unsuccessfully to kill the Kuehl bill. The groups have described it as one of the most economically damaging pieces of legislation on the governor’s desk.

During the final legislative wrangling over SB 1661 in August, Kuehl said, she agreed to the governor’s suggestions to scale back the bill’s impact on businesses. She shortened the leaves to six weeks from 12 and shifted the expense entirely to workers rather than have employers and employees split the costs.

Under the Kuehl bill, only workers who pay into the state disability insurance system would be eligible for the paid family leaves. State government employees are exempted from that system because California covers them under a self-insured program.  Businesses with fewer than 50 employees are not required to hold a job for a worker who goes on paid family leave, according to the AFL-CIO, which helped write the bill.

Payroll deductions for eligible workers–ranging up to $70 a year for people earning more than $72,000 a year–would begin in January 2004. Workers would be allowed to start taking paid leaves as of July 1, 2004. The maximum payment will be $728 a week, and the payments will not be taxed.

Workers will only be allowed to take leaves to bond with a new child–whether by birth, adoption or foster care–or to take care of a sick child, spouse or domestic partner, parent or, in some cases, grandparent, the LA Times reported.