Leave administrator working with client

California

California continues to lead the way with progressive, employee-centric laws that are intended to support California workers. While we all can agree these laws bring about a newfound optimism to the everyday worker, managing the laws is complex and employers are left to manage with minimal guidance.

Leave administrator working with client

California State Disability (SDI) and Paid Family Leave (PFL) benefits and the California Family Rights Act (CFRA)

What is the Update?

California State Disability Insurance (SDI) and Paid Family Leave (PFL)

The EDD recently announced the forecast financial information for PFL and SDI for next year. The 2023 employee contribution rate is projected to remain at 1.1%; the maximum weekly benefit is projected to increase from $1,540 to $1,547; and the taxable wage base, from which DI contributions are taken, is projected to increase from $145,600 to $146,262. The final 2023 DI Fund forecast is expected to be published in mid to late October. The Larkin Company will reach out to our clients for whom we currently administer a VP to assist them in planning for 2023.

Update (09/30/22): The taxable wage ceiling (the maximum amount from which contributions to State Disability Insurance are taken) will be removed starting on January 1, 2024. The weekly benefit for SDI/PFL is 60% or 70% (based on earnings). This will remain the case until January 1, 2025. As of January 1, 2025, the benefit percentage will increase to 90% for lower wage earners (those earning 70% or less than the state average quarterly wage).

California Family Rights Act (CFRA)

Effective January 1, 2023, public and private employers with five or more employees to provide employees with at least 30 days of service up to five unpaid days of bereavement leave upon the death of a family member. “Family Member” is defined as a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Leave would need to be completed within 3 months of the date of the family member’s death and does not have to be taken consecutively.

Further, the definition of “family member” under CFRA will expand from January 1, 2023. Employees will be able to care for a “designated person” who has a serious health condition. “Designated person” means any individual related by blood or whose association with the employee is the equivalent of a family relationship. Employers may limit an employee to one designated person per 12-month period for family care and medical leave.

We will provide updated action items for our employers as a result of these CFRA changes very soon. 

Handbook/Policy Updates

Updates to your company handbook may need to be made if you include California state-specific income replacement benefits information. 

Employers should update parent-in-law in their definition of family member within their company handbook. CFRA information is required to be in all California employee handbooks.

Notice Requirements

We are not expecting any updates on the notices/posters for income replacement benefits in CA.

Concerning CA leaves of absence laws, however…. the new 2022 California Family Rights Act (CFRA) workplace poster has now been released, which adds “parent-in-law” to the definition of family member under the law. See here for a copy of the poster which should be displayed in the workplace. Additionally, an updated 2022 poster for birth parents, has also been released. You can find a link to this poster here, which should also be displayed in the workplace.

Larkin Action

The Larkin Company has updated our leave packets to include the 2022 updates.

Regarding SDI and PFL, ensure you are offsetting any salary continuation/company top-up pay aligned with the new benefit rate maximum, where applicable.  The Larkin Company will adjust offsets for any top-up (leave of absence pay) calculations or STD, accordingly, if we handle these services for you.

*Reminder: claims that start in 2021 will be awarded 2021 benefit rates. Claims that begin on or after January 1, 2022, will be eligible for the new benefit rate.

Further Company Considerations 

We recommend you confirm with your payroll team that they have updated your payroll system for 2022 to collect the decreased employee contributions and have applied the increased taxable wage ceiling.

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Disclaimer

The Larkin Company has taken reasonable steps to ensure the accuracy of the information on this page, however we make no representation or warranty of any kind as to its accuracy or completeness. These resources should not be construed or substituted for legal advice. Accordingly, before taking any actions based upon such information provided herein, we encourage you to seek competent legal advice from a licensed attorney or appropriate professionals.