In our latest webinar, our guest speaker and legal pro, Ted Bacon, Partner-in-Charge at Frost Brown Todd | Alvarado Smith, discussed how to manage employee leaves of absence. With a tailored focus on California leave law compliance, this highly-rated webinar is a must-watch for employers operating in the Golden State.
During the webinar, we held an open forum to field specific questions and by and large, the topic under scrutiny was California’s Paid Family Leave (PFL) program. We did this with a purpose – to collect the real questions that employers, just like you, have and then provide you with the right corresponding answers.
And, in this article, that is exactly what we will do!
So, ready to discuss PFL?
More specifically, are you ready for expert answers to the 5 most asked questions employers have about compliance with PFL in California?
Ready or not…here we go!
What is Paid Family Leave?
PFL in California is a state-administered insurance program under the State Disability Insurance (SDI) umbrella, providing up to eight weeks of benefit payments to employees during pivotal personal and family situations.
California's PFL is designed to provide financial assistance to eligible workers who temporarily need to step away from their jobs for the following reasons:
- Family care:
PFL provides essential support when a family member is seriously ill, enabling employees to care for their loved ones without the added stress of financial instability.
- New child bonding:
The arrival of a new child, whether by birth, adoption, or foster care placement, is a significant event – PFL benefits allow parents to spend vital early moments bonding with their child, fostering a strong family unit.
- Qualifying military events:
Recognizing the unique challenges faced by military families, PFL extends benefits to those needing time off for situations arising from a family member's military deployment.
The program's goal is to support workers who need to be away from work during significant life events so that they don’t have to choose between receiving a paycheck and supporting the needs of their families.
Paid Family Leave FAQs
Now that we've laid the groundwork, you might be wondering about some of the more confusing aspects of California’s PFL program.
Let’s go ahead and address the most common questions that employers tend to ask about PFL.
Keep reading, so that you are fully equipped with the knowledge to effectively manage PFL benefits and stay compliant in 2024 and beyond.
FAQ #1 – Who is Eligible for Paid Family Leave?
California's PFL program is designed to meet the needs of a broad employee base. But who exactly qualifies for it?
Here’s what you need to know about the criteria surrounding employee eligibility for PFL benefits:
Employment status:
The PFL program in California is designed to accommodate the diverse needs of its workforce, including both part-time and full-time employees.
This broad inclusivity not only reflects California’s commitment to cultivating an adaptable employment environment but also ensures that workers in various sectors and job situations have access to the benefits of PFL when they need it.
Earnings requirement:
To qualify for PFL benefits, employees must satisfy a minimum earning requirement of $300 during the base period with SDI deductions taken from those wages.
This base period is typically the 12 months ending just before the last complete calendar quarter before a claim starts. For example, if an employee files a claim in July 2024, their base period, during which they must have met the $300 earning minimum, would be from April 1, 2023, to March 31, 2024.
SDI contribution requirement:
Eligibility for PFL benefits hinges on whether employees have contributed to the SDI program through payroll deductions.
This contribution is a mandatory part of the California Unemployment Insurance Code, with very few exceptions. The contributions are made automatically through payroll deductions by the employer, making most employees who earn wages in California and have deductions taken for SDI eligible for PFL benefits.
Residency considerations:
Eligibility for PFL is not confined to California residents.
Employees who have moved out of state but previously contributed to the SDI program and meet the other eligibility conditions can still apply for and receive PFL benefits.
FAQ #2 – What is considered a qualifying “Serious Health Condition” for Paid Family Leave?
A "Serious Health Condition" under California's PFL law is defined as an illness, injury, impairment, or physical or mental condition that necessitates significant medical attention.
This includes conditions that require either:
- Inpatient care: Admission to a hospital, hospice, or residential medical care facility for at-home or in-patient care, highlighting the need for substantial medical intervention.
- Continuing treatment: Ongoing medical treatment or supervision by a physician or health care practitioner, ensuring the condition is managed under professional medical guidance.
Under the scope of these conditions are:
- Chronic conditions: Conditions that require ongoing visits to a healthcare provider, last for an extended period, and result in intermittent rather than continuous incapacity (e.g., asthma, diabetes).
- Permanent, long-term conditions: Conditions under the supervision of a healthcare provider that are not expected to be cured, such as Alzheimer's, severe strokes, or terminal diseases.
- Multiple treatments: Conditions that could lead to the incapacity of more than three consecutive days if untreated and absences to receive ongoing treatments for restorative surgery including recovery periods.
Note: Unless complications arise, cosmetic treatments, common colds, cases of flu, earaches, upset stomachs, minor ulcers, and non-migraine headaches do not qualify as serious health conditions. This distinction ensures that PFL benefits are reserved for those instances that genuinely require an employee to take time off to care for themselves or a family member facing significant health challenges.
Verifying a serious health condition for PFL requires thorough documentation.
Employees must provide medical certification from a licensed healthcare provider that details:
- The condition's nature
- The necessity for care
- The expected duration of the leave
This includes specific records for inpatient care, such as admission and discharge documents from the relevant medical facility.
For conditions necessitating continuing treatment, the certification should outline the treatment type, its ongoing need, and any appointments. Additionally, documentation for chronic or long-term conditions must confirm their persistence and the requirement for regular medical attention. Similarly, conditions that demand multiple treatments, including those for restorative surgery, should come with a comprehensive treatment plan, highlighting scheduled treatments and anticipated recovery periods.
Employers play a crucial role in informing employees about the required documentation for PFL claims and must handle all medical information with the utmost confidentiality, adhering to HIPAA regulations and state privacy laws.
FAQ #3 – What's the duration limit for Paid Family Leave?
Under PFL program, employees are entitled to take up to 8 weeks of leave within a 12-month period.
The 8-week duration limit aims to balance the needs of employees taking necessary time off with the operational requirements of employers, enabling workers with adequate time to address personal and family needs while minimizing disruption to the workplace.
Note: This duration is subject to the state's regulations and can fluctuate with legal changes. Employers should stay informed about any changes to the PFL program to ensure compliance and to accurately inform their employees about their leave entitlements.
FAQ #4 – How much financial support does Paid Family Leave provide?
Under PFL program, eligible employees can receive financial support that compensates for a portion of their lost wages.
An employee’s PFL payments will range from approximately 60% to 70% of the wages they earned 5 to 18 months before the claim start date. The specific percentage of weekly wage replacement depends on the individual's income level.
This benefit amount is calculated based on the employee's highest quarterly earnings:
- If your highest quarterly earnings were less than $929, your weekly benefit amount will be $50.
- If your highest quarterly earnings were between $929 and $7,154.32, your weekly benefit amount will be approximately 70% of your earnings.
- If your highest quarterly earnings were more than $7,154.33, your WBA is approximately 60 percent of your earnings.
Note: For 2024, the maximum weekly benefit amount is $1,620 and the minimum weekly benefit amount is $50.
FAQ #5 – Can employers require accrued leave to be used before Paid Family Leave can be claimed?
Employers CANNOT require the use of sick leave prior to employees receiving PFL benefits.
This provision ensures that employees retain their sick leave for health-related absences separate from the specific situations covered by PFL.
However, employers CAN require employees to use up to 2 weeks of unused vacation time or paid time off (PTO) before receiving PFL benefits.
Note: When it comes to utilizing PFL benefits in California, the rules around using accrued employer-provided leave such as vacation time or PTO beforehand can vary by employer, so it's crucial to check with human resources for specific policy inquiries.
Additionally, there may be circumstances where employees can simultaneously take unused sick leave and receive PFL benefits.
In such cases, the total combined benefits cannot surpass 100% of their regular earnings. If they do, PFL benefits will be adjusted downwards by the amount of sick leave wages received to prevent overcompensation.
Still have questions? We can help!
Understanding California's PFL Law is a business essential. And this article has equipped you with the know-how to align your business with the key aspects of PFL and achieve complete compliance.
However, at Combined we recognize that every business is unique, and your situation might require additional guidance. Our team of experienced HR specialists is here to offer you personalized support.
Do you still have unanswered questions?
Do you need help implementing compliant policies and procedures within your organization?
We are committed to making sure you understand your responsibilities, uphold your employees' rights, and avoid compliance roadblocks.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
