Did you hear California is the first state in the country to have paid medical leave for employees? Are the employees of my company eligible for this leave? Who pays for this leave? When are employees eligible? These are just a few of the numerous questions California businesses are asking in light of the new paid family medical leave bill that was signed into law on September 23, 2003. I hope this article will help straighten out the confusion and provide you with answers to the various questions being asked by California businesses.
An Overview
On September 23, 2003, Governor Gray Davis signed Senate Bill 1661. This act made California the first state to have a paid “family leave” program for employees. As an overview, this law provides a benefit to employees in California called the Family Temporary Disability Insurance (“FTDI”) program. FTDI allows a California employee to take up to six weeks of paid disability leave if that employee either i) can demonstrate to a physician that he or she is unable to work due to the illness or injury of a family member, or ii) needs time to bond with a new minor child.
The Details
Which employees are covered by FTDI?
Any employee covered by State Disability Insurance (“SDI”), or a similar voluntary plan, will also be covered by FTDI. There is no minimum number of employees a company must have, no minimum number of hours worked or days worked by the employee, and it will cover both full time and part time employees so long as they meet the eligibility requirements listed below.
What are the eligibility requirements for an employee to qualify for FTDI benefits?
An employee qualifies for FTDI benefits if a leave from work is necessary: i) to care for a seriously ill child, spouse, parent, or domestic partner; ii) to bond with a new child; or iii) to bond with a minor child in connection with the adoption or foster care placement of that child. If FTDI benefits are being sought to care for a seriously ill child, spouse, parent, or domestic partner then the employee must submit a medical certificate from a licensed physician stating that the serious health condition warrants the participation of the employee to care for the ill individual and an estimate of how much time will be needed. For bonding with a child, paid leave is only available during the first year after the birth, adoption, or foster care placement.
An individual is not eligible for FTDI benefits while receiving SDI, Unemployment Insurance, or Worker’s Compensation Benefits; and is not eligible for any day that another family member is able and available for the same time period that the individual is providing the required care.
An individual must wait for a 7-day non-payable waiting period prior to benefits starting to be paid.
What are the FTDI benefits?
FTDI pays an eligible employee a weekly amount for up to 6 weeks out of any 12-month period. The weekly benefit amount is approximately 55% of the employees weekly pay rate up to the maximum benefit amount, which is $728 for 2004. The employees pay rate is determined by the highest amount they made for a calendar quarter during the time period 5 to 17 months before the claim is made (“base period”). Therefore, in order to earn the maximum amount an employee would have to earn approximately $17,183.65 in their highest earning qualifying calendar quarter during their base period. The minimum amount is $50 per week and an eligible employee must earn at least $300 during their base period to qualify.
Who pays FTDI benefits?
FTDI benefits are paid to eligible employees by state disability insurance. Employers do not pay for Paid Family Leave insurance or the benefits paid to employees.
When does the FTDI program begin?
The FTDI program becomes effective this month and withholding deductions from employees’ paychecks to pay contributions into the FTDI program begins this month. Every employee that contributes to SDI will also contribute to FTDI. The FTDI contribution will be an increase of .08 percent (.0008) in the SDI contribution rate for calendar year 2004 and 2005. However, benefits under the program will not begin until July 1, 2004. In other words, benefits will not be paid for leave taken prior to July 1, 2004.
What are a company’s requirements under the FTDI program?
Employers must post certain notices and provide an informational brochure (that can be obtained from the Employment Development Department –http://www.edd.ca.gov/direp/de2511.pdf) to all new employees beginning January 1, 2004 and to any employees leaving work on or after July 1, 2004, to provide care for a sick or injured family member or to bond with a new child. Employers do not have to provide their employees with FTDI claim forms to apply for FTDI leave.
Employers do not need to report Paid Family Leave employee contributions as a separate line item on EDD tax forms.
How does FTDI leave impact an employee’s vacation time?
The FTDI program gives an employer the discretion to require an employee to take up to 2 weeks of earned but unused vacation leave. However, for employers that have employees covered by collective-bargaining agreements this option does not relieve them of any duties they may have with respect to vacation leave under that agreement.
Does a company have to hold a position for an employee who takes FTDI leave?
No. Unlike the Family Medical Leave Act and the California Family Rights Act, there is no requirement under the FTDI program that an employer hold an employee’s job position while the employee is on FTDI leave. However, certain provisions of the Family Medical Leave Act and California Family Rights Act, as well as certain provisions regarding terminations against public policy, may prohibit an employer from terminating an employee for taking leave under the terms of the FTDI program. For instance, if an employee is off for both FMLA leave and FTDI leave (if they are on leave under both they run concurrent with each other), then upon the employee’s return that employee may have a right to be reinstated to their position, or one similar, under FMLA.
Comparison to the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA)
There are slight variances between the FMLA and CFRA, which are not discussed here, since they are not relevant to the distinction between FMLA/CFRA and FTDI, but are important if a FMLA/CFRA issue arises. Under FMLA and CFRA an employee may be eligible to take family medical leave to care for a new child (either newborn, adopted, or foster care), to care for the employee’s spouse, child, or parent who has a serious health condition, or to care for the employee’s own serious health condition. Eligible employees are entitled to 12 weeks of unpaid leave during a 12-month period. An eligible employee is one who is employed by a private employer with 50 or more employees and who has worked for the employer at least 12 months and worked 1,250 hours over the 12 months immediately preceding the first day of family leave. In order for an employee to request FMLA or CFRA leave they must give the employer at least 30 days advance notice before the leave is to begin, if the leave is foreseeable; and if not, then as much notice as possible. An employer may not deny CFRA leave, if it is requested due to an emergency, on the grounds that the notice was not sufficient. The employee must also provide a medical certification regarding the need for the leave if it is requested due to an illness. After the leave, an employee is entitled to be restored to the same position or an equivalent position with equivalent benefits, pay, and other terms and conditions.
Unlike FMLA and CFRA, FTDI applies to all employers, regardless of size, is only 6 weeks leave instead of 12 weeks, is paid leave (out of state disability insurance proceeds), there is no minimum amount of time an employee must have worked for the employer prior the leave, and there is no requirement under FTDI that the employer have the same or an equivalent position for the employee once the employee is ready to return to work. FTDI does not change either FMLA or CFRA in any way and is a different program than both of them.
Employees that are entitled to leave under FMLA or CFRA must take any FTDI leave concurrent with FMLA/CFRA leave they elect to take.
Will the Administration’s moratorium on new regulations delay the implementation of FTDI benefits?
No. FTDI benefits will still begin to be paid to eligible employees starting July 1, 2004. The Administration has put a moratorium on the regulations that help to clarify the FTDI statutory provisions, but they do not and cannot change the rights and responsibilities contained in the statutes themselves.
As a company with employees in California what do I need to do to comply with FTDI?
1) Download and post the following bulletins in an area of the office where employees are likely to notice them, such as a snack or lunchroom:http://www.edd.ca.gov/uirep/de1857a.pdf and http://www.edd.ca.gov/direp/de1858.pdf. As a California employer there are other notices to employees that you should have posted in the workplace, post these FTDI bulletins with those other notices.
2) Download and distribute to any new employee after January 1, 2004, or any employee that requests leave that may be covered by FTDI, the following bulletin:http://www.edd.ca.gov/direp/de2511.pdf.
3) Learn and understand the basics of the FTDI program. For more information visit Employment Development Department website at: http://www.edd.ca.gov.
The Lebrecht Group, APLC provides comprehensive advice on a variety of corporate, securities, and employment law matters. Please contact us if you have any questions.
Craig V. Butler is an attorney with The Lebrecht Group, APLC, located in Rancho Santa Margarita, California, specializing in employment, general corporate and securities law. He can be reached at (949) 635-1240 or cbutler@thelebrechtgroup.com with questions or comments.
Please visit our website at www.thelebrechtgroup.com for further information.
