Paid Parental Leave California: 2025 Updates, Employer Rules, and Employee Benefits

California’s 2025 Paid Parental Leave updates increase wage replacement and flexibility for workers bonding with a child or caring for family. Employers gain clarity on obligations, benefit coordination, and compliance under the revised Paid Family Leave and Disability Insurance programs.

By Douglas Wade, Attorney

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Table of Contents

1. Introduction

2. The Paid Family Leave Program in California: What is it?

3. Which companies are under the legal purview?

4. When workers are on leave, will businesses still be required to pay their salaries?

5. What responsibilities does the PFL program place on employers?

6. What is the process of PFL?

7. Which businesses are affected by PFL?

8. What are the PFL program’s eligibility requirements?

9. Which PFL modifications have been implemented for 2025?

Introduction

Workers who require time off to care for an ill family member or to connect with an infant can get income replacement perks through the Paid Family Leave program in California.

The purpose of this article is to address any queries small employers may have regarding Paid Parental Leave in California, and how it affects small company owners and their employees.

The Paid Family Leave Program in California: What is it?

Disability benefits were extended to anyone to take time off from job duties in 2002. It is to care for a spouse, parent, domestic partner, or child who is extremely ill, or to connect with a newborn or a child involved in adoption or placement in foster care (Senate Bill 1661).

The SDI (State Disability Insurance) program oversees the administration of PFL. Employees can take time off to provide support for a very ill family member. They can also take leave to spend time with a new kid (including foster or adoptive children). They will receive a maximum of 8 weeks of benefits under Paid Family Leave in California, which is available to SDI-eligible workers.

Which companies are under the legal purview?

All California companies, regardless of size, are eligible for the PFL program.

When workers are on leave, will businesses still be required to pay their salaries?

No. The PFL scheme is 100% supported solely through worker payments to the state’s Disability Insurance scheme. While workers are on leave, employers are exempt from paying their salaries. The PFL program allows numerous small companies that cannot afford to give paid time off to their employees to do so. This offers confidence to employers that they are acting in the best interests of their workers. It also helps small firms to attract the best staff. Paid Parental Leave in California is an accessible and business-friendly leave system in the country.

What responsibilities does the PFL program place on employers?

Employers are subject to very few requirements under the PFL scheme. The Paid Parental Leave in California does not offer job protection, in contrast to the Family and Medical Leave Act (federal), the Family Rights Act (California), and Pregnancy Disability Leave (California) laws. Nonetheless, family time under the CFRA or FMLA statutes may be taken concurrently with leave under the Paid Family Leave program.

Therefore, based on the size of the company, workers who get Paid Family Leave payments in addition to FMLA/CFRA leave are assured of their jobs upon their return. The protections offered by the California Family Rights Act & New Parent Leave Act (for companies with more than twenty employees, or more than fifty for caregiving claims) and Pregnancy Disability Leave (for companies with five or more) differ.

Before granting benefits, an employer may mandate that a worker use at least two weeks of accrued but unused vacation time. However, a company cannot make an employee take sick leave before they are eligible for benefits.

Although the FMLA and CFRA oblige employers to keep offering health benefits for workers who are on leave, employers must continue to offer health benefits to workers who are using Paid Family Leave (PFL), even though the program doesn’t oblige employers to do so during PFL. Additionally, firms with 5 or more workers must provide health benefits to pregnant employees during pregnancy disability time, which is normally granted for four weeks before delivery and between six and eight weeks following delivery.

PFL payments must be withheld from employees’ paychecks by their employers, just as they are currently for the state’s Disability Insurance plan.

The booklet for Paid Parental Leave in California must only be given by employers to new hires and those who ask for time off to care for a critically ill close relative or spend time with a new child.

What is the process of PFL?

The state’s Disability Insurance program includes PFL, and employees who are insured by SDI are also eligible for this benefit. Contributions from workers to the SDI system cover the cost of the replacement of wage payments under the PFLA. The worker’s paycheck displays the employee payment as a withheld tax. Workers submit claims to EDD if they want to receive 60–70% of their wages.

Rewards under Paid Parental Leave in California can be paid for a maximum of eight weeks in a span of twelve months.

Which businesses are affected by PFL?

According to the experiences of companies in California and additional states that have paid leave policies in place, PFL has not had a major impact on businesses. Employees provide all funding for the program; companies are exempt from paying workers’ salaries during their absence.

According to a 2017 Small Business Majority survey, most small firms have some kind of written or informal plan in place for family medical leave, which is time a worker would devote to care for an immediate family member who has a critical illness or requires care. To be able to give family medical leave, more than seven out of ten (72%) owners of small enterprises have either a formalized written procedure, an established but unwritten policy, or an informal policy that is supplied on an as-needed basis.

Sixty-one percent of small enterprises that provide Paid Parental Leave in California offer either full or part pay, while twenty-two percent offer pay based on employee status.

The Bay Area Economic Institute recently funded an economic research that evaluated California’s Paid Leave Program from 2004 to 2018. According to the study, PFL has boosted employment among new moms, lowers labor expenses for small businesses when employees use it, and doesn’t seem to have a negative impact on firm turnover rates. Employers with fewer than twenty-five workers see labor expenses per worker drop by an average of 14% when workers take advantage of Paid Family Leave.

What are the PFL program’s eligibility requirements?

Under the purview of the Employment Development Department, an employee can apply for PFL benefits. Through this, they want to care for a family member who is very ill, bond with a baby, or adopt or foster a kid. To be able to offer care for a family member who is very ill, a PFL claim must be submitted with a medical certificate.

Wages from all private sector workers go toward the PFL scheme. An employee’s paycheck has a small portion of their earnings taken out and put into an SDI fund.

Depending on earnings, a worker’s weekly benefit amount might range from sixty percent to seventy percent of wages earned five to eighteen months before the start of their claim, with a maximum benefit of $1,300 per week.

By dividing the weekly benefit sum by seven, you can determine your daily benefit amount. Your weekly compensation amount multiplied by eight or the entire amount of wages liable for SDI tax paid during your base period are the two ways to determine the maximum benefit sum.

Employees who are eligible for leave according to the California Family Rights Act and the Family Medical Leave Act (federal) must take PFL concurrently with their leave under those laws.

To learn more about employee responsibilities and benefit amounts, go to the Employment Development Department’s webpage.

Which PFL modifications have been implemented for 2025?

Small companies and their staff can now use the state’s paid family program to receive a greater income replacement whenever they take additional time off, as of January 1. Beginning in 2025, employees on leave who file for State Disability Insurance or Paid Family Leave will be compensated 70–90% of their usual wage for claims. People will receive 90% of their usual paycheck if they make as much as 70% of the state’s average weekly pay, which is approximately $63,000 annually in 2025.

The restriction that employees use two weeks of their accumulated vacation time before they start earning PFL benefits has been lifted via statute AB 2123.

There are new incentives for California workers and agricultural workers to take paid sick & safe days.

Outdoor agricultural workers can now utilize it to avoid heat, smoke, or flooding caused by a municipal or state evacuation, including when their workplace is closed because of such conditions.

If they want to support an immediate family member who has been a victim of crime, particularly domestic abuse, and needs to ensure their safety, California workers are now permitted to utilize these days for certain purposes.

Have a quick question? We answered nearly 2000 FAQs.

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Paid Parental Leave California: 2025 Updates, Employer Rules, and Employee Benefits

Introduction

The Paid Family Leave Program in California: What is it?

Which companies are under the legal purview?

When workers are on leave, will businesses still be required to pay their salaries?

What responsibilities does the PFL program place on employers?

What is the process of PFL?

Which businesses are affected by PFL?

What are the PFL program’s eligibility requirements?

Which PFL modifications have been implemented for 2025?

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