Assemblywoman Gonzalez Proposes Full Income Replacement for California’s Paid Family Leave Program

Monday, December 21, 2020

SACRAMENTO – (Monday, Dec. 21, 2020) – Taking a pay cut to use California’s Paid Family Leave program is simply not an option for working families who are getting by paycheck-to-paycheck. Assembly Bill 123 introduced by California Assemblywoman Lorena Gonzalez (D-San Diego) will ensure the program is within reach for all workers by guaranteeing 90 percent of their income during the period of their leave.

“Too many working Californians are left without any paid family leave because they can’t afford to pay the bills while receiving only a portion of their paycheck,” Assemblywoman Gonzalez said. “Families shouldn’t have to choose between making ends meet and taking time off during critical moments in life to access the leave they’ve already paid into.”

When Californians need to take time off to care for their newborn child or an ill family member, the state’s Paid Family Leave program allows them to receive 60 to 70 percent of their wages, up to a maximum amount of weekly benefits that is adjusted on an annual basis, for eight weeks. The program is entirely employee-funded through the State Disability Insurance (SDI) payroll deduction, yet many working class families are not able to access the full range of benefits.

Receiving a partial payment of wages while on leave makes it difficult to afford basic household expenses – particularly at a time when families are more likely to face added expenses from a newborn, or increased medical costs due to an ill family member. Nearly one-third of California workers who were eligible for and needed paid leave did not apply for the program due to concerns over a loss in wages. More than a third of workers who reported using paid family leave said they have had to use savings set aside for a different purpose, take on debt, put off paying bills or cut their leave time short.

Studies have shown paid family leave policies have a positive impact. AB 123 would increase wage replacement rates for the 18.7 million Californians covered under this program. Because paid family leave benefits are not subject to state income taxes, the 90 percent income replacement under the legislation would allow most lower and middle class families to receive their regular take-home pay while on leave.

AB 123 would address the most significant remaining hurdle that prevents working parents and caregivers from utilizing this leave program they have already paid into, and give working families the financial security they deserve during the critical moments in life.

For questions on AB 123, or to schedule an interview with Assemblywoman Gonzalez, contact Sami Gallegos: samantha.gallegos@asm.ca.gov