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Newsom signs bill making family leave affordable to more workers

By Jeanne Kuang | CalMatters

Gov. Gavin Newsom signed a family leave bill Friday that will enable lower-income workers to recoup up to 90% of their income when they take time off to care for a new child or a sick family member.

That will be a boost from the current program and will apply to those who make up to $57,000 a year.  The boost, outlined in SB 951, will begin in 2025, and higher earning Californians will pay for it through larger contributions from their paychecks.

“California created the first Paid Family Leave program in the nation 20 years ago,” Newsom said in a statement. “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.”

Advocates for the legislation — a coalition of gender equity, child and maternal health and anti-poverty groups — say the program has fallen behind other states and California doesn’t provide enough to allow low-income workers to take the leave. Research shows that paid family leave is linked to improved maternal health and child development.

“Until now, workers who couldn’t afford a 40% pay cut were being forced to keep working against their doctor’s orders, to work up until the day they go into labor, to leave ill family members without adequate care, and to return to work right after having a child,” said Katherine Wutchiett, staff attorney at Legal Aid at Work, in a news release. “SB 951 finally ends this inhumane status quo.”

Program helps higher earners morePaid family leave, like the state’s disability insurance program, is funded through a 1.1 % tax on most workers’ paychecks. Those who claim the benefit can receive paid leave based on their income for up to eight weeks. The maximum payout this year is $1,540 a week. Pregnant workers can also take time off using disability insurance.

In 2025 the bill increases the amount Californians receive through the program to 90% of paychecks for lower-income workers and 70% of the paychecks for other workers.

For 2023 and 24, the bill will keep the program’s current wage replacement rates, which have stricter income limits. That’s 70% of paychecks for lowest-income workers — up to 27,000 a year — and 60% for the rest. Even those making the minimum wage full-time can only get the lower rate.

Higher-income people have been more likely to take time off. From 2017 to 2019, leave claims by workers making less than $20,000 a year declined while they rose for all other workers — increasing the most for those making $100,000 or more, according to the Employment Development Department.

Last year Newsom vetoed similar legislation to raise family leave payments, saying it would create unbudgeted costs.

The bill this year will pay for increased benefits by removing a tax shield on earnings above $145,600, effectively raising the contributions from higher earners.

The Employment Development Department told the Legislature in a Senate floor analysis that this would increase funding for the program, but it “would not offset the additional benefit payments over time.”

‘There’s just no way.’Kiera Schminke, a Carlsbad mother of two, learned of paid family leave when she was pregnant with her first daughter seven years ago.

Between her husband’s full-time job and her part-time work as an adjunct professor, they were just able to pay the bills, she said, but it wouldn’t have added up if she had taken paid leave. At the time, the family leave program only paid 55% of workers’ incomes.

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