Editorial: A better family leave benefit for Californians
California Gov. Jerry Brown signs into law a measure increasing the amount of income Californians can receive during the state’s existing six weeks of paid family leave in Sacramento, Calif. on April 11.
Days after San Francisco mandated a dramatic expansion of family leave benefits in the private sector, Gov. Jerry Brown approved a comparatively modest upgrade in California’s pioneering family-leave program that won’t take effect until 2018. Yet the statewide measure, AB 908, is still a win for workers, particularly lower-wage workers who can’t afford to take advantage of the family leave benefit at its current level.
California launched the nation’s first family leave program in 2004, offering up to six weeks of paid leave to workers who need to care for a new baby or an ailing family member. The program, which is financed through the disability insurance taxes that employees pay, costs employers nothing. But it covers only 55% of the worker’s lost wages, currently up to $1,104 per week.
The new law will raise the “wage replacement rate” to 70% for anyone making one-third or less of the state’s average wage, and to 60% for everyone else (up to the existing maximum benefit). That increase should be large enough to make the program usable for low-wage workers who can’t make ends meet even temporarily with today’s benefits, but it’s small enough to be funded almost entirely by unspent revenue from the current program.
San Francisco’s new ordinance requires workers to be paid 100% of their wages while on family leave, with employers covering the amount not paid by the state program. Such a rule might fly in a job market as hot and as expensive as that city’s, but it gives employers a reason to avoid hiring the workers most likely to need the benefit.
Researchers have found that the state’s family leave program has benefited workers, their families and their employers, thanks to increased productivity and retention. It also helps small businesses compete for young workers against big firms that are increasingly offering generous family leave benefits on their own dime. AB 908 makes a welcome effort to increase participation, and it requires the state to reassess the effort in 2021 — a good opportunity to see if more generous benefits are warranted.
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