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On 4/11/2016, Governor Brown signed AB 908, which will increase the amount of California Paid Family Leave (PFL) benefits an employee can receive as of 1/1/2018.  Currently, an individual’s weekly PFL benefit amount is 55% of his/her wages, up to a maximum weekly benefit amount.  The new law will increase the weekly PFL benefit amount to either 60% or 70% depending on the employee’s income.

 

Wages Paid (in the highest-income quarter) Weekly Benefit Amount
Less than $929 $50
$929 or greater, but less than 1/3 of the state average quarterly wage 70% of the amount of wages paid in the highest wage quarter, divided by 13
Wages were at least 1/3 of the amount of the state average weekly wage The greater of the following:23.3% of the state average weekly wage, or60% of the amount of wages paid in the highest wage quarter, divided by 13

 

The current seven day waiting period required before an employee is eligible to receive PFL benefits will also be removed.

 

Since PFL is funded by employee contributions, the new law will not increase employer contributions; however, the State will increase the amount of employees’ disability insurance taxes.

 

Additional Information:

To access the text of AB 908, please click here.

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Bonnie Mangels – Bonnie is the Corporate Counsel and Senior Compliance Manager for Sequoia. When not inundated in paperwork and legal briefs, her interests include arts and crafts, bunnies, and the Bay Area.