Written by The Business Journal Staff
(AP) — Continuing a wave of expanding labor policy reforms aimed at addressing income inequality, California’s Democratic governor signed legislation Monday to increase time-off pay for employees who must leave work to care for their family.
Gov. Jerry Brown signed AB908 to expand the state’s paid family leave law, saying he wants to create a “more decent and empathetic kind of community.”
At a signing ceremony, Brown said providing more assistance to the state’s lowest earners on family leave will help correct the growing income disparity facing California and every other state.
“We’re trying to compensate for the gross inequality that is not an abstraction,” Brown said.
Brown postponed signing the family leave bill last month during his negotiations with labor unions to boost the state’s minimum wage. He approved a plan last week to raise the statewide minimum wage to $15 an hour by 2022.
The expanded family leave law drew immediate praise from President Barack Obama, who said in a written statement the action ensures California workers peace of mind. He said he will continue pushing federal lawmakers to provide “this basic security.”
“Congress needs to catch up to California – and to countries all over the world – by acting to guarantee paid family leave to all Americans,” Obama wrote.
California is one of just four states and territories to mandate any pay during family leave. Its law already allows workers to take up to six weeks off work to bond with a new child or care for sick family members and receive 55 percent of their wages.
The measure Brown signed Monday increases the pay to 60 percent of wages, capped at about $1,100 a week, starting in 2018. It creates a new classification for low-income workers who make about $20,000 or less annually to receive 70 percent of their regular pay.
California’s program is funded by worker contributions and is operated by the state’s Employment Development Department. A legislative analysis estimates increased leave pay will cost that fund about $348 million in 2018 and $587 million annually by 2021, according to a legislative analysis. The state EDD has enough in savings from workers’ contributions to cover the additional benefits, the analysis said.
Assemblyman Jimmy Gomez, D-Los Angeles, wrote the bill after a state review found that low-income workers are the least likely to use the benefit. Nine in 10 workers who take paid family leave use it after the birth of a child.
Many Republicans opposed the legislation but there was little debate about it in the state Legislature and several GOP lawmakers declined to offer comment Monday.
The California Chamber of Commerce and the National Federation of Independent Businesses did not take positions on the bill. Tom Scott, director of the California NFIB, said his organization stayed neutral because the funding mechanism requires no financial input from employers.
Scott said the bill appears to encourage employees to take more family time off.
“Whether or not that’s the case, the fact that these paid leave dollars were drawn from a fund to which the employees, not the employers, contribute tells us our members would not bear the burden of this cost,” he said.
California’s move comes amid other similar steps by local and state governments as issues of income inequality draw more attention this election year.
San Francisco last week became the first place in the country to require businesses to provide six weeks of fully paid leave for new parents, a rarity now offered to some government sector workers and some private employees.
New York state extended partial pay from six weeks to 12 in March. New Jersey and Rhode Island provide partial pay for up to six weeks.
Federal law requires private businesses with 50 or more employees and all government agencies to allow workers to take 12 weeks of unpaid family leave.