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?

Effective January 1, 2022, the changes to the income replacement benefits in California were as follows:

  • SDI contribution rate decreased from 1.2% to 1.1%.  The taxable wage base up to which employees contribute to the program, increased dramatically from $128,298 to $145,600 and the maximum cost to an employee updated to $1,601.60.
  • SDI and PFL continues to provide benefits equal to 60% or 70% of an employee’s base period earnings in 2022*.  The maximum weekly benefit, however, increased from $1,357 in 2021 to $1,540 in 2022.

*SDI will provide disability and PFL benefits equal to 70% for employees with an annual income less than ~$6,803 (1/3 of the State Average Quarterly Wage).

Concerning the job protected leave law, the California Family Rights Act (CFRA), the only change was to include parent-in-law within the definition of family member under the law.  Effective January 2022, eligible employees may take time off to care for their parent-in-law with a serious health condition.

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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