California’s rules and laws regulating employment leave are, to say the least, very involved. Covering different circumstances from sickness to having a baby, the Golden State currently has seven types of employee leave. Some of them are paid, whereas other promise job reinstatement for a specific amount of time. It isn’t surprising both employees and employers have a lot of questions. I am going to talk about how these laws will affect your charter school.

Paid Family Leave for Charter Schools in California

On April 11, 2016, California’s Government Brown signed the AB 908 bill, which is going to increase the percentage of wage substitution employees should receive when they take an absence leave from work. Brown explained that globalization has placed pressure on benefits and salaries. ‘’California is currently going more in the aggregate than other states,’’ he said. ‘’We are trying to make up for the gross inequality that isn’t a concept, but it is currently bringing down a lot of people’s lives who reside in California’’. He also said that providing more help to the lowest earners in California on family leave will assist in fixing the increasing income disparity in the state. Gov. Brown delayed approving the family leave bill during his negotiations with different labor unions in California to increase the minimum wage of the state. He accepted a plan to increase the minimum wage in California to $15 per hour by the year 2022.

The leave is going to be covered by California’s Paid Family Leave (PFL) or State Disability Income (SDI) programs. Payroll taxes include these programs, so there isn’t a direct effect on employers because of this change. However, the bill is expected to have an indirect effect on employers because of increased use of leave benefits and provisions by employees. Currently, employees in California can take six PFL weeks to care for sick family members or to bond with a newly adopted child, foster child, or newborn babies. Eligibility expires one year from the date of adoption, placement in foster care, or birth.  Throughout the leave, employees are going to get a 55% wage replacement to a weekly benefit worth $1,104.00, modified every year based on the state’s average wage.

The SDI program

The State Disability Income (SDI) program is for employees that can’t work because of pregnancy, sickness, or injuries that aren’t related to their job. To qualify for the program, employees should have their disability confirmed by a medical professional. Employees approved for receiving SDI will receive 55% of their overall wages. The amount is going to be up to the maximum amount of benefits up to fifty-two weeks. Many employees and companies in California add to the fund to pay the benefits, including charter schools.

AB 908 is going to do the following, starting January 1, 2018:

  • Increase the rate of wage replacement for the Paid Family Leave (PFL) or State Disability Income (SDI) programs from 55% to:-
  • $50 per week for employees with a salary more than $929 per quarter but lower than 33% of the average quarterly wage in California.
  • 70% of wages for employees who make 33% of the average quarterly wage in California.
  • Employees who make 23.3 % or more of California’s average weekly wage.
  • Employees who make 33% or more of the average quarterly wage in California.
  • States that the weekly benefit amount of employees shouldn’t go beyond the maximum employees’ payment temporary disability guarantee weekly benefit amount set the by the Industrial Relations Department.
  • Sunset the percentage of increase during January 1, 2022.
  • Remove the one-week waiting duration for Paid Family Leave (PFL) claims.
  • Entail the Employment Development Department (EDD) to inform the Legislature by March 1, 2021, on the use of Paid Family Leave (PFL) or State Disability Income (SDI) benefits based on categories of income, the cost of the increased wage rates of replacement, and the contribution rates of SDI.
  • Entail the Employment Development Department (EDD) to conduct a cost/benefit evaluation of the one-week waiting direction for SDI claims. The EDD should then report that study’s results to the Assembly Insurance Committee, Senate Labor, and Committee of Industrial Relations.

The amounts of payroll deduction funding both the Paid Family Leave (PFL) and State Disability Income (SDI) is set by the EDD on an annual basis. It is most likely that the payroll’s deduction wage ceiling and rate can increase under the new formula for benefits. It is also most likely that the legislature is going to pass legislation to make increases in the rates of wage replacement permanent, before the sunset date of the law.

Regarding companies’ and employers’ effect, this new law is supposed to make it easier for employees to take more time to spend with a new child. Also, the law will have an insignificant effect on public school districts in California because many school districts don’t pay into the State Disability Income (SDI) program. Most of the charter schools do pay into the State Disability Income (SDI program, and those schools will most likely be affected.

Exclusions Teachingis thegreatest actof optimism.

Fathers and mothers-in-law are not included as care recipients. On July 1, 2014, the law was expanded to give time off to take care of an ill grandchild, sister, brother, grandparent, or parent in law.

An employee might not receive Paid Family Leave (PFL) insurance benefits if they are qualified or are receiving disability insurance from the state. An employer shouldn’t give time off or hold the job for an employee unless the employee qualifies for the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA).

My company recently conducted a webinar on California Family Leave Law. You can watch a recording of this webinar by clicking here: California Family Leave Law: Are CFRA and FMLA Finally Playing in Unison?

If you have any questions regarding family leave or need any assistance with your employee benefits for your charter school, please contact me at (760) 622-6080 or by using my Contact Form. You may also contact me through any of my social media accounts.

—Juliet Lucero

About Juliet

Juliet Lucero is an Account Executive with Keenan & Associates. She provides employee benefits consulting to charter schools in California. She has been in the insurance industry over 15 years and has been working with charter schools since 2003. Juliet has saved Charter Schools millions of dollars over the years with her innovative solutions. Her goal is to keep charter schools in compliance with the ever-changing laws while maintaining a competitive and affordable benefits package.