January 14, 2019
According to recent news stories, California Governor Gavin Newsom (D) may introduce a proposal in his annual budget calling for extending the state’s existing paid family leave from the current 6 weeks to 6 months. Governor Newsom’s proposal is not expected to address how to finance the expanded paid family leave; the impact of long absences on California employers and what could happen to the program if the state experiences a recession.
Reportedly, as a first step Governor Newsom will propose to expand leave from 6 weeks to a slightly longer time by requiring 3 months of trust fund solvency instead of 6. Thereafter, Governor Newsom is expected to appoint a task force to make recommendations on how to expand the leave to 6 months.
Impact on Employers and Employees
Mandating paid family leave requirements limit employers’ flexibility to design leave benefits packages for their unique workforces, raise labor costs, and increase administrative burden.
Employees who need leave would have access to more paid leave benefits. However, employees could face increased payroll deductions and employers could face increased payroll taxes in order to fund it.
Outlook
Governor Newsom is expected to release the proposal soon. In California, any tax increase must gain a supermajority of the House and Senate and many state politicians were elected touting fiscal prudence. It’s unclear if the proposal will become law, but California policymakers are likely to push for an extension of paid family leave duration.
More Topics
Policy & Advocacy
Coverage Expansion
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