California’s lower and middle-income families will now have increased access to family and disability leave benefits under a new law signed today by Gov. Gavin Newsom.
Senate Bill 951, authored by Senator María Elena Durazo (D-Los Angeles) boosts leave benefits for lower and middle-income employees to cover more of their regular income while they take time to care for their loved ones.
The legislation extends increased wage replacement rates for State Disability Insurance and Paid Family Leave that was set to sunset at the end of the year. Under the legislation’s phased increase in benefits, by 2025, workers earning less than the state’s average wage could receive up to 90% of their regular wages while taking leave.
“California families and our state as a whole are stronger when workers have the support they need to care for themselves and their loved ones,” said Governor Newsom. “California created the first Paid Family Leave program in the nation 20 years ago, and today we’re taking an important step to ensure more low-wage workers, many of them women and people of color, can access the time off they’ve earned while still providing for their family.”
According to Durazo, workers earning less than $27,000 annually receive a higher wage replacement rate of 70%; all other workers receive 60% of their income up to a cap. This means that a worker who normally earns $27,000 annually will only receive about $365 per week from Paid Family Leave or State Disability Insurance, not nearly enough for a family to live on.
“Those who cannot afford to live on so little income are forced to either sink further into debt or not be there for critical moments – bonding with a new baby or caring for a seriously ill loved one. Others choose to go back to work while they themselves are still seriously ill or injured, further endangering their health. Additionally, because workers with low incomes pay for these programs out of their own paychecks, but cannot afford to use them, they end up subsidizing higher-wage workers’ leaves,” Durazo wrote in a statement.
According to an analysis from the California Budget and Policy Center. 37% of workers earning less than $20,000 a year were eligible for paid family leave yet only 14% used it.
The legislation comes twenty years after California became the first state to offer paid family leave. Proponents and sponsors of the bill argue without an adequate wage replacement rate, workers with low incomes, who already face health disparities due to systemic racism, sexism, and xenophobia, cannot access the benefits that they pay for.
“While California is the fifth-largest economy in the world, it also has the highest rate of childhood poverty. California’s PFL offers workers earning $14 per hour the lowest wage replacement rate of any paid family leave program in the United States. As Governor Newsom’s Taskforce on Paid Family Leave concluded, one of the leading reasons Californians forego taking PFL is that current benefit levels replace too little of a worker’s wages. California led the way in instituting Paid Family Leave. Now it is time for us to catch up by making our SDI and PFL programs accessible to California’s most marginalized families,” proponents of the bill wrote in a statement.
Newsom vetoed AB 123, a similar bill by former Sen. Lorena Gonzalez last year that aimed to strengthen the state’s paid family leave program due to budget constraints.
