Existing law establishes, within the state disability insurance program, a family temporary disability insurance program, also known as the paid family leave program, for the provision of wage replacement benefits to workers who take time off work to care for certain seriously ill family members, to bond with a minor child within one year of birth or placement, as specified, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of certain family members.

Existing law authorizes an employer to require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employees initial receipt of these benefits during any 12-month period in which the employee is eligible for these benefits.

This bill would make that authorization and related provisions inapplicable to any disability commencing on or after January 1, 2025. The bill would also make nonsubstantive changes.

Existing law establishes, within the state disability insurance program, a family temporary disability insurance program, also known as the paid family leave program, for the provision of wage replacement benefits to workers who take time off work to care for certain seriously ill family members, to bond with a minor child within one year of birth or placement, as specified, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of certain family members.

Existing law authorizes an employer to require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employees initial receipt of these benefits during any 12-month period in which the employee is eligible for these benefits.

This bill would make that authorization and related provisions inapplicable to any disability commencing on or after January 1, 2025. The bill would also make nonsubstantive changes.

Existing law establishes, within the state disability insurance program, a family temporary disability insurance program, also known as the paid family leave program, for the provision of wage replacement benefits to workers who take time off work to care for certain seriously ill family members, to bond with a minor child within one year of birth or placement, as specified, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of certain family members.

Existing law authorizes an employer to require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employees initial receipt of these benefits during any 12-month period in which the employee is eligible for these benefits.

This bill would eliminate make that authorization and related provisions. provisions inapplicable to any disability commencing on or after January 1, 2025. The bill would also make nonsubstantive changes.

Existing law establishes, within the state disability insurance program, a family temporary disability insurance program, also known as the paid family leave program, for the provision of wage replacement benefits to workers who take time off work to care for certain seriously ill family members, to bond with a minor child within one year of birth or placement, as specified, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of certain family members.

Existing law authorizes an employer to require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employees initial receipt of these benefits during any 12-month period in which the employee is eligible for these benefits.

This bill would eliminate that authorization and related provisions. The bill would also make nonsubstantive changes.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2123

Author:(Papan)

As Amended Ver:July 3, 2024

Majority vote

SUMMARY

Deletes the authorization for an employer to require an employee to take two weeks of vacation leave before accessing benefits under California's Paid Family Leave (PFL) program.

Senate Amendments

Clarify that the provisions of this bill only apply to a disability commencing on or after January 1, 2025 by adding a sunset date on the authorization requirement in existing law, rather than striking the provision.

COMMENTS

PFL was enacted in 2002 as an expansion to the SDI program to extend disability compensation to individuals who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new minor child. California was the first state in the nation to implement a PFL benefit, with benefit payments beginning on July 1, 2004. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70% wage replacement. Starting January 1, 2025 workers will be eligible for 70-90% wage replacement.

An employer is currently allowed to require an employee to use two weeks of accrued vacation time before they can access PFL benefits. This prevents employees from freely accessing benefits they pay for, because PFL benefits are entirely funded by employees through a payroll withholding. Additionally, in practice many employees would likely use available vacation time before accessing PFL benefits given that these benefits are full wage replacement and PFL benefits are only partial wage replacement. By deleting the provision allowing employers to require employees to use vacation leave before accessing PFL benefits, this bill leaves the decision of whether to use vacation benefits before accessing their PFL benefits entirely with the employee.

This bill is a reintroduction of one provision from AB 575 (Papan) of 2023, which was vetoed by the Governor. The Governor's veto message said that AB 575 "would create pressure on the DI Trust Fund's solvency and adequacy resulting in higher disability contributions paid by employees." The provision reintroduced in this bill only impacts when an individual can begin accessing PFL, not who can access PFL or for how long.

According to the Author

Over 20 years ago, California became the first state in the nation to enact a paid family leave program. California Paid Family Leave (PFL) provides workers with partial wage replacement when they take leave from work to provide care for a family member or bond with a new child. While California has led the nation in implementing PFL and has taken meaningful steps to make the program more equitable, workers still face barriers in accessing the PFL benefits that they contribute to. AB 2123 will remove unnecessary barriers for individuals seeking to access their PFL benefits and better enable them to be with children or family members in times of transition and hardship. These updates will allow workers to access the support they need without placing any additional requirements on California employers.

Arguments in Support

According to the sponsors of the measure, Legal Aid at Work, "removing the ability of employers to require employees to use up to 2 weeks of accrued vacation will clarify and simplify the PFL application process. Workers who have already paid for PFL should be able to receive their benefits when they become eligible. Paid Family Leave is an important benefit that has been linked to improved maternal and child health outcomes, decreased enrollment in nursing homes for older adults, and improved economic security for women and families."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, "One-time costs of approximately $67,000 to the Employment Development Department (EDD) to update PFL program forms to remove references to the vacation leave limitation (Unemployment Compensation Disability Fund)."

VOTES:

ASM INSURANCE: 12-0-3

YES: Calderon, Chen, Berman, Gipson, Lowenthal, Ortega, Joe Patterson, Petrie-Norris, Blanca Rubio, Valencia, Wallis, Wood

ABS, ABST OR NV: Alvarez, Bauer-Kahan, Jones-Sawyer

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 75-0-5

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Boerner, Megan Dahle, Gallagher, Hart, Mathis

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

UPDATED

VERSION: July 3, 2024

CONSULTANT: Claire Wendt / INS. / (916) 319-2086 FN: 0004301

 THIRD READING 

Bill No: AB 2123

Author: Papan (D), et al.

Amended: 7/3/24 in Senate

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: 7-0, 6/17/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 75-0, 4/25/24 (Consent) - See last page for vote

SUBJECT: Disability compensation: paid family leave

SOURCE: Legal Aid at Work

DIGEST:

This bill sunsets provisions in law authorizing an employer to require employees to take two weeks of vacation leave before accessing their benefits under California’s Paid Family Leave (PFL) program.

Senate Floor Amendment of 7/3/24 revert to existing law and instead of striking, would add a sunset date on the provisions by specifying that the two week wait period requirements shall not apply to any period of disability commencing on or after January 1, 2025.

ANALYSIS:

Existing law:

1. Establishes the Employment Development Department (EDD) to, among other duties, administer the Unemployment Insurance and Disability Insurance programs. (Unemployment Insurance Code (UIC) §301)
2. Establishes the State Disability Insurance (SDI) program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the Disability Insurance and Paid Family Leave programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. (UIC §2601-3308)
3. Provides Paid Family Leave (PFL) eligible employees up to eight weeks of wage replacement benefits within a 12-month period to workers who need to take time off work for the following reasons:
   1. To care for a seriously ill family member, as defined;
   2. To bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption;
   3. To participate in a qualifying event because of a family member’s military deployment. (UIC §3301)
4. Defines, under PFL, “family member” to mean a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. (UIC §3302)
5. Provides that an individual is not eligible for PFL benefits if another family member is ready, willing, able, and available for the same period of time in a day to provide the required care. (UIC §3303.1)
6. Allows an employer, as a condition of an employee’s initial claim for PFL benefits during any 12-month period, to require an employee to take up to two weeks of earned but unused vacation leave prior to the employee accessing PFL benefits. (UIC §3303.1)

This bill sunsets the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program by specifying that it shall not apply to any period of disability commencing on or after January 1, 2025.

Background

1. Paid Family Leave Program. The State Disability Insurance (SDI) program, administered by the EDD, was created in 1946 to provide monetary benefits to workers unable to work due to non-work-related illness, injury, or pregnancy. Benefits are payable for a maximum of 52 weeks and provide a wage replacement of about 60-70 percent. The SDI program is financed solely by worker contributions and covers approximately 18 million individuals.

In 2004, California was the first state in the nation to implement a Paid Family Leave program (administered as part of SDI) that provides benefits to workers who need to take time off to care for a seriously ill family member, or to bond with a new child either from birth, adoption, or foster care placement. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70 percent wage replacement. According to EDD’s SDI Statistical Information, for fiscal year 2022-23, there were a total of 288,756 claims paid with a total of $1,688,294,154 in benefits paid. The average weekly benefit amount was $874 for approximately 7.18 weeks.^[1]

In 2022, SB 951 (Durazo, Chapter 878, Statutes of 2022) was adopted to, among other things, for claims commencing on or after January 1, 2025, revise the formula for determining benefits under both the SDI and PFL programs to provide an increased wage replacement rate ranging from 70-90 percent based on the individual’s wages.

AB 575 (Papan, 2023) would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom the employee is acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL. AB 575 was vetoed by the Governor who stated, among other things, “with our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined in considering bills with significant fiscal implications, such as this measure.”

This bill reintroduces one of the issues addressed in AB 575. Deleting the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program will give employees the choice of when and how they want to use any available vacation time in conjunction with their PFL time.

1. Need for this bill? According to the author, “Under current law, employers can require an employee to use up to two weeks of accrued vacation leave before they can access PFL benefits. This requirement contradicts the purpose of the program and impedes workers from obtaining the benefits that they are entitled to. Vacation time is intended for personal time off and accrual policies vary across industries and employers, while PFL is intended to support workers unable to work because they are bonding or caregiving. Moreover, workers who have already paid for PFL should be able to receive the benefit as soon as they become eligible, not when their employer allows them to. Assembly Bill (AB) 2123 will remove an unnecessary barrier for individuals seeking to access their paid family benefits. This will allow individuals to take care of their loved ones without fear of losing their vacation time.”

Related/Prior Legislation

SB 1090 (Durazo, 2024) authorizes workers to file a claim for SDI or PFL benefits up to 30 days in advance of the first compensable day of disability and requires EDD to issue payment on those claims within 14 days of receipt (per existing law) or as soon as eligibility begins for the claimant, whichever is later. The bill is pending in the Assembly Insurance Committee.

AB 2167 (Cervantes, 2024) authorizes workers to file a claim for PFL or SDI benefits up to 60 days in advance of the first compensable day of disability and up to 60 days following the first compensable day; and extends the deadline for an individual to appeal EDD’s decision of ineligibility for PFL or SDI benefits to 60 days from the service of the notice of determination. The bill is pending in Senate Appropriations Commiteee.

AB 518 (Wicks, 2023) expanded eligibility for benefits under the PFL program to include individuals who take time off work to care for a seriously ill designated person. The bill defined “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. The bill is pending on the Senate Inactive File.

AB 575 (Papan, 2023) made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL.

AB 1041 (Wicks, Chapter 748, Statutes of 2022) expanded the list of individuals for which an employee can take leave under the California Family Rights Act and the Healthy Workplaces, Healthy Families Act of 2014 to include a designated person.

SB 951 (Durazo, Chapter 878, Statutes of 2022) revised the formula for the computation of SDI and PFL benefits to increase the wage replacement available to claimants.

SB 1058 (Durazo, Chapter 317, Statutes of 2022) required EDD to collect demographic data, including race and ethnicity data and sexual orientation and gender identity data, for individuals who claim disability benefits under the SDI and PFL programs.

SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2019) extended, beginning July 1, 2020, the timeframe from six to eight weeks the maximum duration of PFL benefits individuals may receive.

SB 1123 (Jackson, Chapter 849, Statutes of 2018) expanded the PFL program to include time off to participate in a qualifying exigency related to covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces.

SB 770 (Jackson, Chapter 350, Statutes of 2013) expanded the definition of family to include in-laws, siblings and grandparents.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the Employment Development Department (EDD) would incur a one-time cost of $67,000 to update PFL program forms (Unemployment Compensation Disability Fund).

SUPPORT: (Verified 7/3/24)

Legal Aid at Work (source)

AARP California

Alzheimer’s Association California
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

American Association of University Women California
American College of Obstetricians and Gynecologists District IX
Asian Law Alliance
BreastfeedLA
California Breastfeeding Coalition
California Child Care Resource and Referral Network
California Coalition on Family Caregiving
California Domestic Workers Coalition
California Employment Law Council
California Employment Lawyers Association
California Federation Business and Professional Women
California Federation of Teachers
California Partnership to End Domestic Violence
California Strategies & Advocacy, LLC

California Teachers Association
California WIC Association
California Women's Law Center
California Work & Family Coalition
Californians for Safety and Justice
Caring Across Generations
Center for Community Action and Environmental Justice
Center for Workers' Rights
Child Care Law Center
Citizens for Choice
Electric Universe
Evolve California
Family Caregiver Alliance
First 5 Association of California
First 5 California
Food Empowerment Project
Friends Committee on Legislation of California
Health Officers Association of California
Human Impact Partners
Jewish Center for Justice
Justice in Aging
LA Alliance for A New Economy
LA Best Babies Network
National Health Law Program
National Partnership for Women & Families
Nursing Mothers Counsel
Orange County Equality Coalition
Our Family Coalition
Parent Voices California
Poder Latinx
Public Counsel
Reproductive Freedom for All California
San Diego County Breastfeeding Coalition
San Mateo County Central Labor Council
Small Business Majority
The Women's Employment Rights Clinic At GGU
UAW Region 6
UFCW Western States Council
Women Lawyers of Sacramento
Working Partnerships USA
Worksafe

OPPOSITION: (Verified 7/3/24)

None received

ARGUMENTS IN SUPPORT: According to the sponsors of the measure, Legal Aid at Work, “removing the ability of employers to require employees to use up to 2 weeks of accrued vacation will clarify and simplify the PFL application process. Workers who have already paid for PFL should be able to receive their benefits when they become eligible. Paid Family Leave is an important benefit that has been linked to improved maternal and child health outcomes, decreased enrollment in nursing homes for older adults, and improved economic security for women and families.”

ASSEMBLY FLOOR: 75-0, 4/25/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Boerner, Megan Dahle, Gallagher, Hart, Mathis

Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556

8/6/24 16:10:43

**** END ****

1. Paid Family Leave Program Statistics. https://edd.ca.gov/siteassets/files/about_edd/quick-stats/qspfl_pfl_program_statistics.pdf ↑

 CONSENT  

Bill No: AB 2123

Author: Papan (D), et al.

Amended: 7/3/24 in Senate

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: 7-0, 6/17/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 75-0, 4/25/24 (Consent) - See last page for vote

SUBJECT: Disability compensation: paid family leave

SOURCE: Legal Aid at Work

DIGEST:

This bill sunsets provisions in law authorizing an employer to require employees to take two weeks of vacation leave before accessing their benefits under California’s Paid Family Leave (PFL) program.

Senate Floor Amendment of 7/03/24 revert to existing law and instead of striking, would add a sunset date on the provisions by specifying that the two week wait period requirements shall not apply to any period of disability commencing on or after January 1, 2025.

ANALYSIS:

Existing law:

1. Establishes the Employment Development Department (EDD) to, among other duties, administer the Unemployment Insurance and Disability Insurance programs. (Unemployment Insurance Code (UIC) §301)
2. Establishes the State Disability Insurance (SDI) program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the Disability Insurance and Paid Family Leave programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. (UIC §2601-3308)
3. Provides Paid Family Leave (PFL) eligible employees up to eight weeks of wage replacement benefits within a 12-month period to workers who need to take time off work for the following reasons:
   1. To care for a seriously ill family member, as defined;
   2. To bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption;
   3. To participate in a qualifying event because of a family member’s military deployment. (UIC §3301)
4. Defines, under PFL, “family member” to mean a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. (UIC §3302)
5. Provides that an individual is not eligible for PFL benefits if another family member is ready, willing, able, and available for the same period of time in a day to provide the required care. (UIC §3303.1)
6. Allows an employer, as a condition of an employee’s initial claim for PFL benefits during any 12-month period, to require an employee to take up to two weeks of earned but unused vacation leave prior to the employee accessing PFL benefits. (UIC §3303.1)

This bill sunsets the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program by specifying that it shall not apply to any period of disability commencing on or after January 1, 2025.

Background

1. Paid Family Leave Program. The State Disability Insurance (SDI) program, administered by the EDD, was created in 1946 to provide monetary benefits to workers unable to work due to non-work-related illness, injury, or pregnancy. Benefits are payable for a maximum of 52 weeks and provide a wage replacement of about 60-70 percent. The SDI program is financed solely by worker contributions and covers approximately 18 million individuals.

In 2004, California was the first state in the nation to implement a Paid Family Leave program (administered as part of SDI) that provides benefits to workers who need to take time off to care for a seriously ill family member, or to bond with a new child either from birth, adoption, or foster care placement. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70 percent wage replacement. According to EDD’s SDI Statistical Information, for fiscal year 2022-23, there were a total of 288,756 claims paid with a total of $1,688,294,154 in benefits paid. The average weekly benefit amount was $874 for approximately 7.18 weeks.^[1]

In 2022, SB 951 (Durazo, Chapter 878, Statutes of 2022) was adopted to, among other things, for claims commencing on or after January 1, 2025, revise the formula for determining benefits under both the SDI and PFL programs to provide an increased wage replacement rate ranging from 70-90 percent based on the individual’s wages.

AB 575 (Papan) from 2023 would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom the employee is acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL. AB 575 was vetoed by the Governor who stated, among other things, “with our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined in considering bills with significant fiscal implications, such as this measure.”

This bill reintroduces one of the issues addressed in AB 575. Deleting the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program will give employees the choice of when and how they want to use any available vacation time in conjunction with their PFL time.

1. Need for this bill? According to the author, “Under current law, employers can require an employee to use up to two weeks of accrued vacation leave before they can access PFL benefits. This requirement contradicts the purpose of the program and impedes workers from obtaining the benefits that they are entitled to. Vacation time is intended for personal time off and accrual policies vary across industries and employers, while PFL is intended to support workers unable to work because they are bonding or caregiving. Moreover, workers who have already paid for PFL should be able to receive the benefit as soon as they become eligible, not when their employer allows them to. Assembly Bill (AB) 2123 will remove an unnecessary barrier for individuals seeking to access their paid family benefits. This will allow individuals to take care of their loved ones without fear of losing their vacation time.”

Related/Prior Legislation

SB 1090 (Durazo, 2024) authorizes workers to file a claim for SDI or PFL benefits up to 30 days in advance of the first compensable day of disability and requires EDD to issue payment on those claims within 14 days of receipt (per existing law) or as soon as eligibility begins for the claimant, whichever is later. The bill is pending in the Assembly Insurance Committee.

AB 2167 (Cervantes, 2024) authorizes workers to file a claim for PFL or SDI benefits up to 60 days in advance of the first compensable day of disability and up to 60 days following the first compensable day; and extends the deadline for an individual to appeal EDD’s decision of ineligibility for PFL or SDI benefits to 60 days from the service of the notice of determination. The bill is pending in Senate Appropriations Commiteee.

AB 518 (Wicks, 2023) expanded eligibility for benefits under the PFL program to include individuals who take time off work to care for a seriously ill designated person. The bill defined “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. The bill is pending on the Senate Inactive File.

AB 575 (Papan, 2023) made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL.

AB 1041 (Wicks, Chapter 748, Statutes of 2022) expanded the list of individuals for which an employee can take leave under the California Family Rights Act and the Healthy Workplaces, Healthy Families Act of 2014 to include a designated person.

SB 951 (Durazo, Chapter 878, Statutes of 2022) revised the formula for the computation of SDI and PFL benefits to increase the wage replacement available to claimants.

SB 1058 (Durazo, Chapter 317, Statutes of 2022) required EDD to collect demographic data, including race and ethnicity data and sexual orientation and gender identity data, for individuals who claim disability benefits under the SDI and PFL programs.

SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2019) extended, beginning July 1, 2020, the timeframe from six to eight weeks the maximum duration of PFL benefits individuals may receive.

SB 1123 (Jackson, Chapter 849, Statutes of 2018) expanded the PFL program to include time off to participate in a qualifying exigency related to covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces.

SB 770 (Jackson, Chapter 350, Statutes of 2013) expanded the definition of family to include in-laws, siblings and grandparents.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

The Employment Development Department (EDD) would incur a one-time cost of $67,000 to update PFL program forms (Unemployment Compensation Disability Fund).

SUPPORT: (Verified 7/3/24)

Legal Aid at Work (source)

AARP California

Alzheimer’s Association California
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

American Association of University Women California
American College of Obstetricians and Gynecologists District IX
Asian Law Alliance
BreastfeedLA
California Breastfeeding Coalition
California Child Care Resource and Referral Network
California Coalition on Family Caregiving
California Domestic Workers Coalition
California Employment Law Council
California Employment Lawyers Association
California Federation Business and Professional Women
California Federation of Teachers
California Partnership to End Domestic Violence
California Strategies & Advocacy, LLC

California Teachers Association
California WIC Association
California Women's Law Center
California Work & Family Coalition
Californians for Safety and Justice
Caring Across Generations
Center for Community Action and Environmental Justice
Center for Workers' Rights
Child Care Law Center
Citizens for Choice
Electric Universe
Evolve California
Family Caregiver Alliance
First 5 Association of California
First 5 California
Food Empowerment Project
Friends Committee on Legislation of California
Health Officers Association of California
Human Impact Partners
Jewish Center for Justice
Justice in Aging
LA Alliance for A New Economy
LA Best Babies Network
National Health Law Program
National Partnership for Women & Families
Nursing Mothers Counsel
Orange County Equality Coalition
Our Family Coalition
Parent Voices California
Poder Latinx
Public Counsel
Reproductive Freedom for All California
San Diego County Breastfeeding Coalition
San Mateo County Central Labor Council
Small Business Majority
The Women's Employment Rights Clinic At GGU
UAW Region 6
UFCW Western States Council
Women Lawyers of Sacramento
Working Partnerships USA
Worksafe

OPPOSITION: (Verified 7/3/24)

None received

ARGUMENTS IN SUPPORT: According to the sponsors of the measure, Legal Aid at Work, “removing the ability of employers to require employees to use up to 2 weeks of accrued vacation will clarify and simplify the PFL application process. Workers who have already paid for PFL should be able to receive their benefits when they become eligible. Paid Family Leave is an important benefit that has been linked to improved maternal and child health outcomes, decreased enrollment in nursing homes for older adults, and improved economic security for women and families.”

ASSEMBLY FLOOR: 75-0, 4/25/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Boerner, Megan Dahle, Gallagher, Hart, Mathis

Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556

7/31/24 15:30:44

**** END ****

1. Paid Family Leave Program Statistics. https://edd.ca.gov/siteassets/files/about_edd/quick-stats/qspfl_pfl_program_statistics.pdf ↑

 CONSENT  

Bill No: AB 2123

Author: Papan (D), et al.

Introduced: 2/6/24

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: 7-0, 6/17/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 75-0, 4/25/24 (Consent) - See last page for vote

SUBJECT: Disability compensation: paid family leave

SOURCE: Legal Aid at Work

DIGEST:

This bill strikes provisions in law authorizing an employer to require employees to take two weeks of vacation leave before accessing their benefits under California’s Paid Family Leave (PFL) program.

ANALYSIS:

Existing law:

1. Establishes the Employment Development Department (EDD) to, among other duties, administer the Unemployment Insurance and Disability Insurance programs. (Unemployment Insurance Code (UIC) §301)
2. Establishes the State Disability Insurance (SDI) program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the Disability Insurance and Paid Family Leave programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. (UIC §2601-3308)
3. Provides Paid Family Leave (PFL) eligible employees up to eight weeks of wage replacement benefits within a 12-month period to workers who need to take time off work for the following reasons:
   1. To care for a seriously ill family member, as defined;
   2. To bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption;
   3. To participate in a qualifying event because of a family member’s military deployment. (UIC §3301)
4. Defines, under PFL, “family member” to mean a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. (UIC §3302)
5. Provides that an individual is not eligible for PFL benefits if another family member is ready, willing, able, and available for the same period of time in a day to provide the required care. (UIC §3303.1)
6. Allows an employer, as a condition of an employee’s initial claim for PFL benefits during any 12-month period, to require an employee to take up to two weeks of earned but unused vacation leave prior to the employee accessing PFL benefits. (UIC §3303.1)

This bill removes the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program.

Background

1. Paid Family Leave Program. The State Disability Insurance (SDI) program, administered by the EDD, was created in 1946 to provide monetary benefits to workers unable to work due to non-work-related illness, injury, or pregnancy. Benefits are payable for a maximum of 52 weeks and provide a wage replacement of about 60-70 percent. The SDI program is financed solely by worker contributions and covers approximately 18 million individuals.

In 2004, California was the first state in the nation to implement a Paid Family Leave program (administered as part of SDI) that provides benefits to workers who need to take time off to care for a seriously ill family member, or to bond with a new child either from birth, adoption, or foster care placement. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70 percent wage replacement. According to EDD’s SDI Statistical Information, for fiscal year 2022-23, there were a total of 288,756 claims paid with a total of $1,688,294,154 in benefits paid. The average weekly benefit amount was $874 for approximately 7.18 weeks.^[1]

In 2022, SB 951 (Durazo, Chapter 878, Statutes of 2022) was adopted to, among other things, for claims commencing on or after January 1, 2025, revise the formula for determining benefits under both the SDI and PFL programs to provide an increased wage replacement rate ranging from 70-90 percent based on the individual’s wages.

AB 575 (Papan) from 2023 would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom the employee is acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL. AB 575 was vetoed by the Governor who stated, among other things, “with our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined in considering bills with significant fiscal implications, such as this measure.”

This bill reintroduces one of the issues addressed in AB 575. Deleting the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program will give employees the choice of when and how they want to use any available vacation time in conjunction with their PFL time.

1. Need for this bill? According to the author, “Under current law, employers can require an employee to use up to two weeks of accrued vacation leave before they can access PFL benefits. This requirement contradicts the purpose of the program and impedes workers from obtaining the benefits that they are entitled to. Vacation time is intended for personal time off and accrual policies vary across industries and employers, while PFL is intended to support workers unable to work because they are bonding or caregiving. Moreover, workers who have already paid for PFL should be able to receive the benefit as soon as they become eligible, not when their employer allows them to. Assembly Bill (AB) 2123 will remove an unnecessary barrier for individuals seeking to access their paid family benefits. This will allow individuals to take care of their loved ones without fear of losing their vacation time.”

Related/Prior Legislation

SB 1090 (Durazo, 2024) authorizes workers to file a claim for SDI or PFL benefits up to 30 days in advance of the first compensable day of disability and requires EDD to issue payment on those claims within 14 days of receipt (per existing law) or as soon as eligibility begins for the claimant, whichever is later. The bill is pending in the Assembly Insurance Committee.

AB 2167 (Cervantes, 2024) 1) authorizes workers to file a claim for PFL or SDI benefits up to 60 days in advance of the first compensable day of disability and up to 60 days following the first compensable day; and 2) extends the deadline for an individual to appeal EDD’s decision of ineligibility for PFL or SDI benefits to 60 days from the service of the notice of determination. The bill is pending in Senate Appropriations Commiteee.

AB 518 (Wicks, 2023) would expand eligibility for benefits under the PFL program to include individuals who take time off work to care for a seriously ill designated person. The bill would define “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. The bill is pending on the Senate Inactive File.

AB 575 (Papan, 2023) would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL.

AB 1041 (Wicks, Chapter 748, Statutes of 2022) expanded the list of individuals for which an employee can take leave under the California Family Rights Act and the Healthy Workplaces, Healthy Families Act of 2014 to include a designated person.

SB 951 (Durazo, Chapter 878, Statutes of 2022) revised the formula for the computation of SDI and PFL benefits to increase the wage replacement available to claimants.

SB 1058 (Durazo, Chapter 317, Statutes of 2022) required EDD to collect demographic data, including race and ethnicity data and sexual orientation and gender identity data, for individuals who claim disability benefits under the SDI and PFL programs.

SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2019) extended, beginning July 1, 2020, the timeframe from six to eight weeks the maximum duration of PFL benefits individuals may receive.

SB 1123 (Jackson, Chapter 849, Statutes of 2018) expanded the PFL program to include time off to participate in a qualifying exigency related to covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces.

SB 770 (Jackson, Chapter 350, Statutes of 2013) expanded the definition of family to include in-laws, siblings and grandparents.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

The Employment Development Department (EDD) would incur a one-time cost of $67,000 to update PFL program forms (Unemployment Compensation Disability Fund).

SUPPORT: (Verified 6/17/24)

Legal Aid at Work (source)

AARP California

Alzheimer’s Association California
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

American Association of University Women California
American College of Obstetricians and Gynecologists District IX
Asian Law Alliance
BreastfeedLA
California Breastfeeding Coalition
California Child Care Resource and Referral Network
California Coalition on Family Caregiving
California Domestic Workers Coalition
California Employment Law Council
California Employment Lawyers Association
California Federation Business and Professional Women
California Federation of Teachers
California Partnership to End Domestic Violence
California Strategies & Advocacy, LLC

California Teachers Association
California WIC Association
California Women's Law Center
California Work & Family Coalition
Californians for Safety and Justice
Caring Across Generations
Center for Community Action and Environmental Justice
Center for Workers' Rights
Child Care Law Center
Citizens for Choice
Electric Universe
Evolve California
Family Caregiver Alliance
First 5 Association of California
First 5 California
Food Empowerment Project
Friends Committee on Legislation of California
Health Officers Association of California
Human Impact Partners
Jewish Center for Justice
Justice in Aging
LA Alliance for A New Economy
LA Best Babies Network
National Health Law Program
National Partnership for Women & Families
Nursing Mothers Counsel
Orange County Equality Coalition
Our Family Coalition
Parent Voices California
Poder Latinx
Public Counsel
Reproductive Freedom for All California
San Diego County Breastfeeding Coalition
San Mateo County Central Labor Council
Small Business Majority
The Women's Employment Rights Clinic At GGU
UAW Region 6
UFCW Western States Council
Women Lawyers of Sacramento
Working Partnerships USA
Worksafe

OPPOSITION: (Verified 6/17/24)

None received

ARGUMENTS IN SUPPORT: According to the sponsors of the measure, Legal Aid at Work, “removing the ability of employers to require employees to use up to 2 weeks of accrued vacation will clarify and simplify the PFL application process. Workers who have already paid for PFL should be able to receive their benefits when they become eligible. Paid Family Leave is an important benefit that has been linked to improved maternal and child health outcomes, decreased enrollment in nursing homes for older adults, and improved economic security for women and families.”

ASSEMBLY FLOOR: 75-0, 4/25/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Boerner, Megan Dahle, Gallagher, Hart, Mathis

Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556

6/18/24 13:52:35

**** END ****

1. Paid Family Leave Program Statistics. https://edd.ca.gov/siteassets/files/about_edd/quick-stats/qspfl_pfl_program_statistics.pdf ↑

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2123 (Papan) - Disability compensation: paid family leave

Bill Summary:

AB 2123 would remove the authorization for an employer to require employees to take two weeks of vacation leave before accessing their benefits under the California’s Paid Family Leave (PFL) program.

Fiscal Impact:

The Employment Development Department (EDD) would incur a one-time cost of $67,000 to update PFL program forms (Unemployment Compensation Disability Fund).

Background:

The State Disability Insurance (SDI) program, administered by EDD, was created in 1946 to provide monetary benefits to workers unable to work due to non-work-related illness, injury, or pregnancy. Benefits are payable for a maximum of 52 weeks and provide a wage replacement of about 60-70 percent. The SDI program is financed solely by worker contributions and covers approximately 18 million individuals.

In 2004, California was the first state in the nation to implement a PFL program (administered as part of SDI) that provides benefits to workers who need to take time off to care for a seriously ill family member, or to bond with a new child either from birth, adoption, or foster care placement. Effective January 1, 2021, PFL’s scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70 percent wage replacement. EDD data indicate that for 2022-23, individuals filed 288,756 paid claims, with a total of $1.7 billion in benefits. The average weekly benefit amount was $874 over an average duration of 7.18 weeks.

Proposed Law:

This bill would remove the authorization for an employer to require employees to take two weeks of vacation leave before accessing their benefits under the PFL program.

Related Legislation:

• SB 1090 (Durazo) would authorize workers to file a claim for SDI or PFL benefits up to 30 days in advance of the first compensable day of disability and requires EDD to issue payment on those claims within 14 days of receipt (per existing law) or as soon as eligibility begins for the claimant, whichever is later. The bill is currently pending in the Assembly Insurance Committee.
• AB 2167 (Cervantes) would make several changes to deadlines and the application process for the state PFL program including extending the deadline to apply to both 60 days prior and 60 days after the first compensable day, requiring fillable PDF forms for PFL benefits on the EDD website, allowing individuals to use a social security number or individual taxpayer identification number to apply for PFL benefits online, and extending the appeal timeline. The bill is currently pending in the Assembly Insurance Committee.
• AB 518 (Wicks, 2023) would expand eligibility for benefits under the PFL program to include individuals who take time off work to care for a seriously ill designated person. This bill would define “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. The bill is currently pending on the Senate Inactive File.
• AB 575 (Papan, 2023) would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL. The bill was vetoed by the Governor.

Staff Comments:

As noted previously, the SDI program (including PFL) is financed solely by worker contributions through an employee payroll deduction. The amount withheld from a worker’s paycheck, up to 1.5 percent under current law, is determined annually by EDD. The SDI withholding rate for 2024 is 1.1 percent. Effective January 1, 2024, SB 951 (Durazo, 2022) removed the taxable wage limit and maximum withholdings for each employee subject to SDI contributions.

-- END --

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2023 - 2024 Regular

Bill No: AB 2123 Hearing Date: June 5, 2024

SUBJECT: Disability compensation: paid family leave

KEY ISSUE

This bill strikes a provision in law that would no longer allow an employer to require their employee to take two weeks of vacation leave before accessing benefits under California’s Paid Family Leave (PFL) program.

ANALYSIS

Existing law:

1. Establishes the Employment Development Department (EDD) to, among other duties, administer the Unemployment Insurance and Disability Insurance programs. (Unemployment Insurance Code §301)
2. Establishes the State Disability Insurance (SDI) program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the Disability Insurance and Paid Family Leave programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. (Unemployment Insurance Code §2601-3308)
3. Paid Family Leave (PFL) provides eligible employees up to eight weeks of wage replacement benefits within a 12-month period to workers who need to take time off work for the following reasons:
   1. To care for a seriously ill family member, as defined;
   2. To bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption;
   3. To participate in a qualifying event because of a family member’s military deployment. (Unemployment Insurance Code §3301)
4. PFL defines “family member” to mean a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. (Unemployment Insurance Code §3302)
5. Provides that an individual is not eligible for PFL benefits if another family member is ready, willing, able, and available for the same period of time in a day to provide the required care. (Unemployment Insurance Code §3303.1)
6. Allows an employer, as a condition of an employee’s initial claim for PFL benefits during any 12-month period, to require an employee to take up to two weeks of earned but unused vacation leave prior to the employee accessing PFL benefits. (Unemployment Insurance Code §3303.1)

This bill:

1. Removes the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program.

COMMENTS

1. Background: Paid Family Leave Program

The State Disability Insurance (SDI) program, administered by the EDD, was created in 1946 to provide monetary benefits to workers unable to work due to non-work-related illness, injury, or pregnancy. Benefits are payable for a maximum of 52 weeks and provide a wage replacement of about 60-70 percent. The SDI program is financed solely by worker contributions and covers approximately 18 million individuals.

In 2004, California was the first state in the nation to implement a Paid Family Leave program (administered as part of SDI) that provides benefits to workers who need to take time off to care for a seriously ill family member, or to bond with a new child either from birth, adoption, or foster care placement. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70 percent wage replacement. According to EDD’s SDI Statistical Information, for fiscal year 2022-23, there were a total of 288,756 claims paid with a total of $1,688,294,154 in benefits paid. The average weekly benefit amount was $874 for approximately 7.18 weeks.^[1]

In 2022, SB 951 (Durazo, Chapter 878, Statutes of 2022) was adopted to, among other things, for claims commencing on or after January 1, 2025, revise the formula for determining benefits under both the SDI and PFL programs to provide an increased wage replacement rate ranging from 70-90 percent based on the individual’s wages.

AB 575 (Papan) from 2023 would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom the employee is acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL. AB 575 was vetoed by the Governor who stated, among other things, “with our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined in considering bills with significant fiscal implications, such as this measure.”

This bill (AB 2123) reintroduces one of the issues addressed in AB 575. Deleting the authorization for an employer to require an employee to take two weeks of vacation leave before accessing their benefits under the PFL program will give employees the choice of when and how they want to use any available vacation time in conjunction with their PFL time.

2. Need for this bill?

According to the author:

“Under current law, employers can require an employee to use up to two weeks of accrued vacation leave before they can access PFL benefits. This requirement contradicts the purpose of the program and impedes workers from obtaining the benefits that they are entitled to. Vacation time is intended for personal time off and accrual policies vary across industries and employers, while PFL is intended to support workers unable to work because they are bonding or caregiving. Moreover, workers who have already paid for PFL should be able to receive the benefit as soon as they become eligible, not when their employer allows them to. Assembly Bill (AB) 2123 will remove an unnecessary barrier for individuals seeking to access their paid family benefits. This will allow individuals to take care of their loved ones without fear of losing their vacation time.”

3. Proponent Arguments:

According to the sponsors of the measure, Legal Aid at Work:

“Under current law, employers can prevent a worker from accessing PFL by requiring them to use up to two weeks of accrued vacation leave before accessing their PFL benefits. This requirement contradicts the purpose of the program and impedes workers from obtaining the PFL benefits that they are entitled to and fund through their paychecks.

Further, removing the ability of employers to require employees to use up to 2 weeks of accrued vacation will clarify and simplify the PFL application process. Workers who have already paid for PFL should be able to receive their benefits when they become eligible. Paid Family Leave is an important benefit that has been linked to improved maternal and child health outcomes, decreased enrollment in nursing homes for older adults, and improved economic security for women and families.”

4. Opponent Arguments:

None received.

5. Prior/Related Legislation:

SB 1090 (Durazo, 2024) would authorize workers to file a claim for SDI or PFL benefits up to 30 days in advance of the first compensable day of disability and requires EDD to issue payment on those claims within 14 days of receipt (per existing law) or as soon as eligibility begins for the claimant, whichever is later. SB 1090 is pending referral in the Assembly.

AB 2167 (Cervantes, 2024) would make several changes to deadlines and the application process for the state PFL program including extending the deadline to apply to both 60 days prior and 60 days after the first compensable day, requiring fillable PDF forms for PFL benefits on the EDD website, allowing individuals to use a social security number or individual taxpayer identification number to apply for PFL benefits online, and extending the appeal timeline. AB 2167 is pending referral in the Senate.

AB 518 (Wicks, 2023) would expand eligibility for benefits under the PFL program to include individuals who take time off work to care for a seriously ill designated person. This bill would define “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. AB 518 is pending on the Senate Inactive File.

AB 575 (Papan, 2023, Vetoed) would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to require an employee to access vacation time prior to using PFL.

AB 1041 (Wicks, Chapter 748, Statutes of 2022) expanded the list of individuals for which an employee can take leave under the California Family Rights Act and the Healthy Workplaces, Healthy Families Act of 2014 to include a designated person.

SB 951 (Durazo, Chapter 878, Statutes of 2022) revised the formula for the computation of SDI and PFL benefits to increase the wage replacement available to claimants.

SB 1058 (Durazo, Chapter 317, Statutes of 2022) required EDD to collect demographic data, including race and ethnicity data and sexual orientation and gender identity data, for individuals who claim disability benefits under the SDI and PFL programs.

SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2019) beginning July 1, 2020, extended from six to eight weeks the maximum duration of PFL benefits individuals may receive.

SB 1123 (Jackson, Chapter 849, Statutes of 2018) expanded the PFL program to include time off to participate in a qualifying exigency related to covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces.

SB 770 (Jackson, Chapter 350, Statutes of 2013) expanded the definition of family to include in-laws, siblings and grandparents.

SUPPORT

Legal Aid at Work (Sponsor)

AARP California
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

American Association of University Women California
American College of Obstetricians and Gynecologists District IX
Asian Law Alliance
BreastfeedLA
California Breastfeeding Coalition
California Child Care Resource and Referral Network
California Coalition on Family Caregiving
California Domestic Workers Coalition
California Employment Law Council
California Employment Lawyers Association
California Federation Business and Professional Women
California Federation of Teachers
California Partnership to End Domestic Violence
California Strategies & Advocacy, LLC

California Teachers Association
California WIC Association
California Women's Law Center
California Work & Family Coalition
Californians for Safety and Justice
Caring Across Generations
Center for Community Action and Environmental Justice
Center for Workers' Rights
Child Care Law Center
Citizens for Choice
Electric Universe
Evolve California
Family Caregiver Alliance
First 5 Association of California
First 5 California
Food Empowerment Project
Friends Committee on Legislation of California
Health Officers Association of California
Human Impact Partners
Jewish Center for Justice
Justice in Aging
LA Alliance for A New Economy
LA Best Babies Network
National Health Law Program
National Partnership for Women & Families
Nursing Mothers Counsel
Orange County Equality Coalition
Our Family Coalition
Parent Voices California
Poder Latinx
Public Counsel
Reproductive Freedom for All California
San Diego County Breastfeeding Coalition
San Mateo County Central Labor Council
Small Business Majority
The Women's Employment Rights Clinic (WERC) At GGU
UAW Region 6
UFCW Western States Council
Women Lawyers of Sacramento
Working Partnerships USA
Worksafe

OPPOSITION

None received.

-- END --

1. Paid Family Leave Program Statistics. https://edd.ca.gov/siteassets/files/about_edd/quick-stats/qspfl_pfl_program_statistics.pdf ↑

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2123

Author:(Papan) – As Introduced Ver:February 6, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill repeals the authorization for an employer to require an employee to first take up to two weeks of unused vacation leave, prior to utilizing Paid Family Leave (PFL) benefits for which the employee is eligible.

FISCAL EFFECT:

One-time costs of approximately $67,000 to the Employment Development Department (EDD) to update PFL program forms to remove references to the vacation leave limitation (Unemployment Compensation Disability Fund).

COMMENTS:

1. Purpose. According to the author:

While California has led the nation in implementing PFL and has taken meaningful steps to make the program more equitable, workers still face barriers in accessing the PFL benefits that they contribute to. AB 2123 will remove unnecessary barriers for individuals seeking to access their PFL benefits and better enable them to be with children or family members in times of transition and hardship.

This bill is sponsored by Legal Aid at Work and supported by a large coalition of family and workers’ rights groups.

1. PFL Program. PFL provides up to eight weeks of 60% to 70% of wage replacement, extending State Disability Insurance (SDI) compensation to individuals who take time off work to care for a seriously ill child, spouse, parent, or domestic partner; bond with a new minor child; or assist a military family member called to active duty. Beginning January 1, 2025, the range increases to 70% to 90% of wage replacement.

The SDI program (which includes the PFL program) is financed solely by worker contributions through an employee payroll deduction. The amount withheld from a worker’s paycheck, up to 1.5%, is determined annually by EDD using the SDI taxable wage ceiling and contribution rate. According to EDD, during the first six months of 2022, the average weekly PFL benefit amount was $821.

This bill repeals a PFL program provision that allows an employer to require an employee to take up to two weeks of unused vacation leave before accessing PFL benefits. The Assembly Insurance Committee’s analysis of this bill notes “in practice many employees would likely use available vacation time before accessing PFL benefits given that these benefits are full wage replacement and PFL benefits are only partial wage replacement” but “this bill leaves the decision…entirely with the employee.”

1. Related Legislation. AB 575 (Papan) expands PFL benefits to a worker assuming responsibilities of a child in loco parentis and repeals two PFL program limitations, including the provision in this bill. AB 575 was vetoed by Governor Newsom, who stated:

I am proud of the [PFL program] advancements we have made in collaboration with the Legislature. This bill, however, would create pressure on the [Disability Insurance] Trust Fund’s solvency and adequacy resulting in higher disability contributions paid by employees. In addition, it contains implementation costs not accounted for in the annual budget process.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 3, 2024

ASSEMBLY COMMITTEE ON INSURANCE

Lisa Calderon, Chair

ABPCA Bill Id:AB 2123 (

Author:Papan) – As Introduced Ver:February 6, 2024

SUBJECT: Disability compensation: paid family leave

SUMMARY: Deletes the authorization for an employer to require an employee to take two weeks of vacation leave before accessing benefits under California’s Paid Family Leave (PFL) program.

EXISTING LAW:

1. Establishes the Employment Development Department (EDD) to, among other duties, administer the Unemployment Insurance (UI) and State Disability Insurance (SDI) programs. (Unemployment Insurance Code Section (UIC) 301)
2. Establishes the SDI program as a partial wage-replacement plan funded through employee payroll deductions that is available (through the SDI and PFL programs) to eligible individuals who are unable to work due to sickness or injury of the employee (including pregnancy), the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. (UIC 2601-3308)
3. Allows an employer to require an employee to take up to two weeks of earned but unused vacation leave prior to the employee accessing PFL benefits. (UIC 3303.1)

FISCAL EFFECT: Unknown

COMMENTS:

1. Purpose. According to the author:

Over 20 years ago, California became the first state in the nation to enact a paid family leave program. California Paid Family Leave (PFL) provides workers with partial wage replacement when they take leave from work to provide care for a family member or bond with a new child. While California has led the nation in implementing PFL and has taken meaningful steps to make the program more equitable, workers still face barriers in accessing the PFL benefits that they contribute to. AB 2123 will remove unnecessary barriers for individuals seeking to access their PFL benefits and better enable them to be with children or family members in times of transition and hardship. These updates will allow workers to access the support they need without placing any additional requirements on California employers.

1. Background. PFL was enacted in 2002 as an expansion to the SDI program to extend disability compensation to individuals who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new minor child. California was the first state in the nation to implement a PFL benefit, with benefit payments beginning on July 1, 2004. Effective January 1, 2021, the PFL scope was expanded to include employees taking time off work to assist a military family member under covered active duty or call to covered active duty. PFL provides up to eight weeks of the 60-70% wage replacement. Starting January 1, 2025 workers will be eligible for 70-90% wage replacement.
2. Discussion. An employer is currently allowed to require an employee to use two weeks of accrued vacation time before they can access PFL benefits. This prevents employees from freely accessing benefits they pay for, because PFL benefits are entirely funded by employees through a payroll withholding. Additionally, in practice many employees would likely use available vacation time before accessing PFL benefits given that these benefits are full wage replacement and PFL benefits are only partial wage replacement. By deleting the provision allowing employers to require employees to use vacation leave before accessing PFL benefits, this bill leaves the decision of whether to use vacation benefits before accessing their PFL benefits entirely with the employee.

This bill is a reintroduction of one provision from AB 575 (Papan) of 2023, which was vetoed by the Governor. The Governor’s veto message said that AB 575 “would create pressure on the DI Trust Fund's solvency and adequacy resulting in higher disability contributions paid by employees.” The provision reintroduced in this bill only impacts when an individual can begin accessing PFL, not who can access PFL or for how long.

1. Related legislation.
2. AB 2167 (Cervantes), pending before the Assembly Insurance Committee, makes several changes to deadlines and the application process for the state PFL program including extending the deadline to apply to both 60 days prior and 60 days after the first compensable day, requiring fillable PDF forms for PFL benefits on the EDD website, allowing individuals to use a social security number or individual taxpayer identification number to apply for PFL benefits online, and extending the appeal timeline.
3. AB 518 (Wicks), held on the Senate Inactive File, expands the definition of “family member” for purposes of the PFL program to allow workers to take time off to care for a seriously ill individual related by blood or whose close association with the employee is the equivalent of a family relationship.
4. Prior legislation.
5. AB 575 (Papan) of 2023, would have made several changes to how individuals can access PFL benefits including expanding the program to allow for bonding with a child for whom they are acting in loco parentis, removing the restriction that only one family member at a time is allowed to access PFL, and deleting the provision allowing an employer to allow an employee to access vacation time prior to using PFL. This bill was vetoed by the Governor.
6. AB 1041 (Wicks), Chapter 748, Statutes of 2022, expanded the list of individuals for which an employee can take leave under the California Family Rights Act (CFRA) and the Healthy Workplaces, Healthy Families Act of 2014.
7. SB 951 (Durazo), Chapter 878, Statutes of 2022, revised the formula for the computation of SDI and PFL benefits.
8. SB 1058 (Durazo), Chapter 317, Statutes of 2022, required EDD to collect demographic data, including race and ethnicity data and sexual orientation and gender identity data, for individuals who claim disability benefits under the SDI and PFL programs.
9. SB 83 (Committee on Budget and Fiscal Review), Chapter 24, Statutes of 2019, beginning July 1, 2020, extended from six to eight weeks the maximum duration of PFL benefits individuals may receive.
10. SB 1123 (Jackson), Chapter 849, Statutes of 2018 expanded the PFL program to include time off to participate in a qualifying exigency related to covered active duty, as defined, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces.
11. SB 63 (Jackson) Chapter 686, Statues of 2017 prohibits an employer from refusing to allow an employee with more than 12 months of service with the employer, who has at least 1,250 hours of service with the employer, and who works at a worksite in which the employer employs at least 20 employees within 75 miles, to take up to 12 weeks of parental leave to bond with a new child.
12. SB 770 (Jackson), Chapter 350, Statutes of 2013 expanded the definition of family to include in-laws, siblings and grandparents.

REGISTERED SUPPORT / OPPOSITION:

Support

AARP

Alzheimer's Greater Los Angeles

Alzheimer's Orange County

Alzheimer's San Diego

American College of Obstetricians and Gynecologists District Ix

Breastfeedla

California Breastfeeding Coalition

California Child Care Resource and Referral Network

California Coalition on Family Caregiving

California Employment Lawyers Association

California Federation Business and Professional Women

California Federation of Teachers Afl-cio

California Partnership to End Domestic Violence

California Wic Association

California Women's Law Center

California Work & Family Coalition

Californians for Safety and Justice

Caring Across Generations

Center for Workers' Rights

Child Care Law Center

Citizens for Choice

Electric Universe

Evolve California

Family Caregiver Alliance (FCA)

Friends Committee on Legislation of California

Human Impact Partners

Jewish Center for Justice

LA Alliance for A New Economy

LA Best Babies Network

Legal Aid At Work

National Partnership for Women & Families

Orange County Equality Coalition

Our Family Coalition

Parent Voices California

Public Counsel

Reproductive Freedom for All

Small Business Majority

Worksafe

Opposition

None on file

Analysis Prepared by: Claire Wendt / INS. / (916) 319-2086