California’s New Paid Family Leave Law

In April, California’s Governor signed AB 908 into law. Beginning January 1, 2018, the wage replacement rate for individuals receiving paid family leave benefits or disability insurance benefits in California. Currently, the maximum wage replacement rate is 55% of the employee’s standard compensation.  When the new law goes into effect this amount will increase to up to 70% percent of the employee’s regular compensation rate, depending on the income level of the employee.  The new law also eliminates the 7-day waiting period for paid family leave benefits.   

On April 5, San Francisco’s Board of Supervisors passed an ordinance that requires most employers with employees in San Francisco to supplement the gap between an employee’s paid family leave benefits and their regular compensation.  Under the new ordinance, employers can require an employee to use up to 2 weeks of accumulated vacation pay to assist the employer in meeting its obligation. San Francisco’s new ordinance also provides for both administrative enforcement and civil actions.