EMPLOYMENT LAW: Study Highlights Benefits and Effectiveness of CA Paid Family Leave

January 12, 2011

Orange County - Findings from a recent study released Tuesday has concluded that California’s paid family leave law provided valuable benefits to workers while leaving no negative consequences to employers.

According to UCLA Sociology professor and study’s co-author Ruth Milkman, the Paid family leave has been successful since its creation six years ago.

Thousands of workers, especially those in low-wage jobs, were able to balance their family and work thanks to the program. “It has begun to close the gap in access to paid leave benefits,” Milkman said.

Milkman’s co-author and Senior Economist for the Center for Economic and Policy Research Eileen Applebaum added that employers experienced only positive or neutral effects when it comes to productivity, turnover and morale.

Other conclusions show that employers believed that majority of the leaves had minimal impact on business, especially to owners of small businesses. They even experienced cost savings because the state reimburses 55 per cent of the worker’s pay. If the leaves were filed under vacation or sick, the employer would have to pay 100 per cent.

Meanwhile, workers who receive $20 an hour or more with health insurance are more likely to take advantage of the program compared to those who receive less than $20 without benefits. However, the program increased the amount of wage replacement for the latter type of worker. Workers are also likely to return to job after using the leave, and more male workers use the leave to be with their family.

The California Paid Family Leave Law went into effect in July 1, 2004. The law allowed workers in private industry to take up to six weeks of leave to care for a newborn or newly adopted child, or a sick family member. Payments under the program replace 55 per cent of weekly wage.

The state Employment Development Department data shows that in fiscal year 2009-2010, Paid family leave claims totaled to 180,675, amounting to nearly $469 million. Majority of the leaves were filed to care for a new child.