California EDD Updates for 2015 DI Fund and Equitable Parental Leave

California State Disability Insurance Fund Changes for 2015

The California Employment Development Department (EDD) has announced the changes for the 2015 Disability Insurance (DI) fund, which provides State Disability Insurance and Paid Family Leave benefits for California employees.  Effective January 1, 2015, the employee contribution rate will decrease from 1.0% to 0.9%; the maximum weekly benefit amount will increase from $1,075 to $1,104; and the taxable wage limit from which DI contributions can be made will increase from $101,636 to $104,378.

Equitable Parental Leave for Bonding

On July 14, 2014, The Equal Employment Opportunity Commission (EEOC) released updated guidance on parental leave for bonding, both paid and unpaid.  The EEOC specified the requirement for equitable parental leave in order to comply with Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination from disparate treatment between new mothers and new fathers.  To avoid violation of Title VII, employers must differentiate between leave to recover from a disability from leave to bond with a new child.  While employers can offer leave or pay to employees who give birth to recover from pregnancy and childbirth, new mothers and new fathers must be eligible to receive the same amount of parental leave or pay to bond with a new child.

To explain this further with an example, if an employer offers a pregnant employee 12 weeks of “maternity pay,” then 8 weeks is income replacement to recover from pregnancy and childbirth and the remaining 4 weeks is to bond with her new child.  Therefore, a new father or non-biological mother should also be eligible for 4 weeks of parental pay to bond with his or her new child.  This ensures the employer is offering equitable parental leave and not violating Title VII.

The Larkin Company will reach out to our clients for whom we administer Leave of Absence or Voluntary Disability Insurance plans to assist them in planning for 2015.