BILL NUMBER: SB 1661	CHAPTERED
	BILL TEXT

	CHAPTER  901
	FILED WITH SECRETARY OF STATE  SEPTEMBER 26, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 25, 2002
	PASSED THE SENATE  AUGUST 30, 2002
	PASSED THE ASSEMBLY  AUGUST 27, 2002
	AMENDED IN ASSEMBLY  AUGUST 23, 2002
	AMENDED IN ASSEMBLY  AUGUST 8, 2002
	AMENDED IN ASSEMBLY  AUGUST 7, 2002
	AMENDED IN ASSEMBLY  JUNE 24, 2002
	AMENDED IN SENATE  MAY 22, 2002
	AMENDED IN SENATE  MAY 6, 2002
	AMENDED IN SENATE  APRIL 29, 2002

INTRODUCED BY   Senator Kuehl
   (Coauthors:  Senators Alarcon, Escutia, Karnette, Perata, Romero,
and Torlakson
   (Coauthors:  Assembly Members Alquist, Aroner, Chan, Corbett,
Dutra, Goldberg, Jackson, Keeley, Kehoe, Koretz, Pavley,
Strom-Martin, Thomson, and Vargas)

                        FEBRUARY 21, 2002

   An act to amend Sections 984, 2116, 2601, 2613, 2708, and 3254 of,
and to add Chapter 7 (commencing with Section 3300) to Part 2 of
Division 1 of, the Unemployment Insurance Code, relating to
disability compensation, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1661, Kuehl.  Disability compensation:  family temporary
disability insurance.
   Existing law provides for the payment of disability compensation
for the wage loss sustained by an individual unemployed because of
sickness or injury, and finances that compensation by means of
employee contributions at specified rates to the Disability Fund.
   This bill instead would provide disability compensation for any
individual who is unable to work due to the employee's own sickness
or injury, the sickness or injury of a family member, or the birth,
adoption, or foster care placement of a new child.
   This bill would establish, within the state disability insurance
program, a family temporary disability insurance program to provide
up to 6 weeks of wage replacement benefits to workers who take time
off work to care for a seriously ill child, spouse, parent, domestic
partner, or to bond with a new child. This bill would provide the
additional benefits through additional employee contributions.  This
bill would also authorize employers to require that employees utilize
up to 2 weeks of earned but unused vacation leave prior to that
employee's receipt of these additional benefits, as provided, and
specify that these provisions may not be construed to relieve an
employer of any collective bargaining duties.  The bill would also
make related, conforming changes in provisions relating to disability
compensation.  These benefits would be payable for family temporary
disability leaves that begin on and after July 1, 2004.
   By providing for the deposit of additional moneys in the
Disability Fund, a continuously appropriated special fund, for
additional recipients of benefits from that fund, and for the
expenditure of regulatory fee revenues for the administration of
certain of its provisions, this bill would make an appropriation.
   Existing law provides that it is unlawful to falsely certify the
medical condition of any person in order to obtain disability
benefits, to knowingly present a false statement in support of a
claim for benefits, to knowingly solicit or receive any payment for
soliciting a claimant to apply for disability insurance benefits, or
to assist any person who engages in fraudulent or prohibited actions,
as specified.
   This bill would include family temporary disability insurance
benefits within the disability benefits subject to the above
proscriptions.
   Because a violation of these provisions is a criminal offense,
this bill would impose a state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 984 of the Unemployment Insurance Code is
amended to read:
   984.  (a) (1) Each worker shall pay worker contributions at the
rate determined by the director pursuant to this section with respect
to wages, as defined by Sections 926, 927, and 985.  On or before
October 31 of each calendar year, the director shall prepare a
statement, which shall be a public record, declaring the rate of
worker contributions for the calendar year and shall notify promptly
all employers of employees covered for disability insurance of the
rate.
   (2) (A) Except as provided in paragraph (3), the rate of worker
contributions for calendar year 1987 and for each subsequent calendar
year shall be 1.45 times the amount disbursed from the Disability
Fund during the 12-month period ending September 30 and immediately
preceding the calendar year for which the rate is to be effective,
less the amount in the Disability Fund on that September 30, with the
resulting figure divided by total wages paid pursuant to Sections
926, 927, and 985 during the same 12-month period, and then rounded
to the nearest one-tenth of 1 percent.
   (B) The director shall increase the rate of worker contributions
by .08 percent for the 2004 and 2005 calendar years to cover the
initial cost of family temporary disability insurance benefits
provided in Chapter 7 (commencing with Section 3300) of Part 2.
   (3) The rate of worker contributions shall not exceed 1.5 percent
or be less than 0.1 percent.  The rate of worker contributions shall
not decrease from the rate in the previous year by more than
two-tenths of 1 percent.
   (b) Worker contributions required under Sections 708 and 708.5
shall be at a rate determined by the director to reimburse the
Disability Fund for unemployment compensation disability benefits
paid and estimated to be paid to all employers and self-employed
individuals covered by those sections.  On or before November 30th of
each calendar year, the director shall prepare a statement, which
shall be a public record, declaring the rate of contributions for the
succeeding calendar year for all employers and self-employed
individuals covered under Sections 708 and 708.5 and shall notify
promptly the employers and self-employed individuals of the rate.
The rate shall be determined by dividing the estimated benefits and
administrative costs paid in the prior year by the product of the
annual remuneration deemed to have been received under Sections 708
and 708.5 and the estimated number of persons who were covered at any
time in the prior year.  The resulting rate shall be rounded to the
next higher one-hundredth percentage point.  The rate may also be
reduced or increased by a factor estimated to maintain as nearly as
practicable a cumulative zero balance in the funds contributed
pursuant to Sections 708 and 708.5.  Estimates made pursuant to this
subdivision may be made on the basis of statistical sampling, or
another method determined by the director.
   (c) The director's action in determining a rate under this section
shall not constitute an authorized regulation.
   (d) Notwithstanding subdivision (a), the director may, at his or
her discretion, increase or decrease, by not to exceed 0.1 percent,
the rate of worker contributions determined pursuant to subdivision
(a), up to a maximum worker contribution rate of 1.5 percent, if he
or she determines the adjustment is necessary to reimburse the
Disability Fund for disability benefits paid or estimated to be paid
to individuals covered by this section or to prevent the accumulation
of funds in excess of those needed to maintain an adequate fund
balance.
  SEC. 1.5.  Section 2116 of the Unemployment Insurance Code is
amended to read:
   2116.  It is unlawful to do any of the following:
   (a) Falsely certify the medical condition of any person in order
to obtain disability insurance benefits, including family temporary
disability insurance benefits, whether for the maker or for any other
person.
   (b) Knowingly present or cause to be presented any false or
fraudulent written or oral material statement in support of any claim
for disability insurance including family temporary disability
insurance benefits.
   (c) Knowingly solicit, receive, offer, pay, or accept any rebate,
refund, commission, preference, patronage, dividend, discount, or
other consideration, whether in the form of money or otherwise, as
compensation or inducement for soliciting a claimant to apply for
disability insurance including family temporary disability insurance
benefits unless the payment is lawful pursuant to Section 650 of the
Business and Professions Code.
   (d) Knowingly assist, abet, solicit, or conspire with any person
who engages in an unlawful act under this section.
  SEC. 2.  Section 2601 of the Unemployment Insurance Code is amended
to read:
   2601.  The purpose of this part is to compensate in part for the
wage loss sustained by any individual who is unable to work due to
the employee's own sickness or injury, the sickness or injury of a
family member, or the birth, adoption, or foster care placement of a
new child, and to reduce to a minimum the suffering caused by
unemployment resulting therefrom.  This part shall be construed
liberally in aid of its declared purpose to mitigate the evils and
burdens which fall on the unemployed and disabled worker and his or
her family.
  SEC. 3.  Section 2613 of the Unemployment Insurance Code is amended
to read:
   2613.  (a) The Director of Employment Development shall develop
and maintain a program of education concerning disability insurance
rights and benefits.
   (b) The director shall provide to each employer of employees
subject to this part a notice informing workers of their disability
insurance rights and benefits due to sickness, injury, or pregnancy.
The notice shall be given by every employer to each new employee
hired on or after June 1, 1988, and to each employee leaving work due
to pregnancy or nonoccupational sickness or injury on or after July
1, 1989.
   (c) Commencing January 1, 2004, the director shall provide to each
employer of employees subject to this part a notice informing
workers of their disability insurance rights and benefits due to the
employee's own sickness, injury, or pregnancy, or the employee's need
to provide care for any sick or injured family member or new child
who is unable to care for himself or herself.  The notice shall be
given by every employer to each new employee hired on or after
January 1, 2004, and to each employee leaving work on or after July
1, 2004, due to pregnancy, nonoccupational sickness or injury, or the
need to provide care for any sick or injured family member or new
child who is unable to care for himself or herself.
  SEC. 4.  Section 2708 of the Unemployment Insurance Code is amended
to read:
   2708.  (a) In accordance with the director's authorized
regulations, and except as provided in subdivision (c) and Sections
2708.1 and 2709, a claimant shall establish medical eligibility for
each uninterrupted period of disability by filing a first claim for
disability benefits supported by the certificate of a treating
physician or practitioner that establishes the sickness, injury, or
pregnancy of the employee, or the condition of the family member that
warrants the care of the employee.  For subsequent periods of
uninterrupted disability after the period covered by the initial
certificate or any preceding continued claim, a claimant shall file a
continued claim for those benefits supported by the certificate of a
treating physician or practitioner.  A certificate filed to
establish medical eligibility for the employee's own sickness,
injury, or pregnancy shall contain a diagnosis and diagnostic code
prescribed in the International Classification of Diseases, or, where
no diagnosis has yet been obtained, a detailed statement of
symptoms.
   A certificate filed to establish medical eligibility of the
employee's own sickness, injury, or pregnancy shall also contain a
statement of medical facts including secondary diagnoses when
applicable, within the physician's or practitioner's knowledge, based
on a physical examination and a documented medical history of the
claimant by the physician or practitioner, indicating his or her
conclusion as to the claimant's disability, and a statement of his or
her opinion as to the expected duration of the disability.
   (b) A certificate filed to establish medical eligibility of the
serious health condition of the family member that warrants the care
of the employee shall contain:
   (1) A diagnosis and diagnostic code prescribed in the
International Classification of Diseases, or, where no diagnosis has
yet been obtained, a detailed statement of symptoms.
   (2) The date, if known, on which the condition commenced.
   (3) The probable duration of the condition.
   (4) An estimate of the amount of time that the physician or
practitioner believes the employee is needed to care for the child,
parent, spouse, or domestic partner.
   (5) A statement that the serious health condition warrants the
participation of the employee to provide care for his or her child,
parent, spouse, or domestic partner.
   "Warrants the participation of the employee" includes, but is not
limited to, providing psychological comfort, and arranging "third
party" care for the child, parent, spouse, or domestic partner, as
well as directly providing, or participating in, the medical care.
   (c) The department shall develop a certification form for an
employee taking leave for reason of the birth of a child of the
employee or the employee's domestic partner, or the placement of a
child who is unable to care for himself or herself with the employee
in connection with the adoption or foster care of the child by the
employee or domestic partner.
   (d) The first and any continuing claim of an individual who
obtains care and treatment outside this state, shall be supported by
a certificate of a treating physician or practitioner duly licensed
or certified by the state or foreign country in which the claimant is
receiving the care and treatment.  If a physician or practitioner
licensed by and practicing in a foreign country is under
investigation by the department for filing false claims and the
department does not have legal remedies to conduct a criminal
investigation or prosecution in that country, the department may
suspend the processing of all further certifications until the
physician or practitioner fully cooperates, and continues to
cooperate with the investigation.  A physician or practitioner
licensed by and practicing in a foreign country who has been
convicted of filing false claims with the department may not file a
certificate in support of a claim for disability benefits for a
period of five years.
   (e) For purposes of this part, the term "physician" has the same
meaning as it does in Section 3209.3 of the Labor Code.  For purposes
of this part, "practitioner" means a person duly licensed or
certified in California acting within the scope of his or her license
or certification who is a dentist, podiatrist, or as to normal
pregnancy or childbirth, a midwife, nurse midwife, or nurse
practitioner.
   (f) For a claimant who is hospitalized in or under the authority
of a county hospital in this state, a certificate of initial and
continuing medical disability, if any, shall satisfy the requirements
of this section if the disability is shown by the claimant's
hospital chart, and the certificate is signed by the hospital's
registrar.  For a claimant hospitalized in or under the care of a
medical facility of the United States government, a certificate of
initial and continuing medical disability, if any, shall satisfy the
requirements of this section if the disability is shown by the
claimant's hospital chart, and the certificate is signed by a medical
officer of the facility duly authorized to do so.
   (g) Nothing in this section shall be construed to preclude the
department from requesting additional medical evidence to supplement
the first or any continued claim if the additional evidence can be
procured without additional cost to the claimant.  The department may
require that the additional evidence include identification of
diagnoses, symptoms, or a statement as to the facts of the claimant's
disability by the physician or practitioner treating the claimant,
by the registrar, authorized medical officer, or other duly
authorized official of the hospital or health facility treating the
claimant, or by an examining physician or other representative of the
department.
  SEC. 5.  Section 3254 of the Unemployment Insurance Code is amended
to read:
   3254.  The Director of Employment Development shall approve any
voluntary plan, except one filed pursuant to Section 3255, as to
which he or she finds that there is at least one employee in
employment and all of the following exist:
   (a) The rights afforded to the covered employees are greater than
those provided for in Chapter 2 (commencing with Section 2625) and
those provided for in Chapter 7 (commencing with Section 3300).
   (b) The plan has been made available to all of the employees of
the employer employed in this state or to all employees at any one
distinct, separate establishment maintained by the employer in this
state.  "Employees" as used in this subdivision includes those
individuals in partial or other forms of short-time employment and
employees not in employment as the Director of Employment Development
shall prescribe by authorized regulations.
   (c) A majority of the employees of the employer employed in this
state or a majority of the employees employed at any one distinct,
separate establishment maintained by the employer in this state have
consented to the plan.
   (d) If the plan provides for insurance the form of the insurance
policies to be issued have been approved by the Insurance
Commissioner and are to be issued by an admitted disability insurer.

   (e) The employer has consented to the plan and has agreed to make
the payroll deductions required, if any, and transmit the proceeds to
the plan insurer, if any.
   (f) The plan provides for the inclusion of future employees.
   (g) The plan will be in effect for a period of not less than one
year and, thereafter, continuously unless the Director of Employment
Development finds that the employer or a majority of its employees
employed in this state covered by the plan have given notice of the
termination of the plan.  The notice shall be filed in writing with
the Director of Employment Development and shall be effective only on
the anniversary of the effective date of the plan next following the
filing of the notice, but in any event not less than 30 days from
the time of the filing of the notice; except that the plan may be
terminated on the operative date of any law increasing the benefit
amounts provided by Sections 2653 and 2655 or the operative date of
any change in the rate of worker contributions as determined by
Section 984, if notice of the termination of the plan is transmitted
to the Director of Employment Development not less than 30 days prior
to the operative date of that law or change.  If the plan is not
terminated on the 30 days' notice because of the enactment of a law
increasing benefits or because of a change in the rate of worker
contributions as determined by Section 984, the plan shall be amended
to conform to that increase or change on the operative date of the
increase or change.
   (h) The amount of deductions from the wages of an employee in
effect for any plan shall not be increased on other than an
anniversary of the effective date of the plan except to the extent
that any increase in the deductions from the wages of an employee
allowed by Section 3260 permits that amount to exceed the amount of
deductions in effect.
   (i) The approval of the plan or plans will not result in a
substantial selection of risks adverse to the Disability Fund.
  SEC. 6.  Chapter 7 (commencing with Section 3300) is added to Part
2 of Division 1 of the Unemployment Insurance Code, to read:

      CHAPTER 7.  PAID FAMILY CARE LEAVE

   3300.  The Legislature finds and declares all of the following:
   (a) It is in the public benefit to provide family temporary
disability insurance benefits to workers to care for their family
members.  The need for family temporary disability insurance benefits
has intensified as both parent's participation in the workforce has
increased, and the number of single parents in the workforce has
grown.  The need for partial wage replacement for workers taking
family care leave will be exacerbated as the population of those
needing care, both children and parents of workers, increases in
relation to the number of working age adults.
   (b) Developing systems that help families adapt to the competing
interests of work and home not only benefits workers, but also
benefits employers by increasing worker productivity and reducing
employee turnover.
   (c) The federal Family and Medical Leave Act (FMLA) and California'
s Family Rights Act (CFRA) entitle eligible employees working for
covered employers to take unpaid, job-protected leave for up to 12
workweeks in a 12-month period.  Under the FMLA and the CFRA, unpaid
leave may be taken for the birth, adoption, or foster placement of a
new child; to care for a seriously ill child, parent, or spouse; or
for the employee's own serious health condition.
   (d) State disability insurance benefits currently provide wage
replacement for workers who need time off due to their own
non-work-related injuries, illnesses, or conditions, including
pregnancy, that prevent them from working, but do not cover leave to
care for a sick or injured child, spouse, parent, domestic partner,
or leave to bond with a new child.
   (e) The majority of workers in this state are unable to take
family care leave because they are unable to afford leave without
pay.  When workers do not receive some form of wage replacement
during family care leave, families suffer from the worker's loss of
income, increasing the demand on the state unemployment insurance
system and dependence on the state's welfare system.
   (f) It is the intent of the Legislature to create a family
temporary disability insurance program to help reconcile the demands
of work and family.  The family temporary disability insurance
program shall be a component of the state's unemployment compensation
disability insurance program, shall be funded through employee
contributions, and shall be administered in accordance with the
policies of the state disability insurance program created pursuant
to this part.  Initial and ongoing administrative costs associated
with the family temporary disability insurance program shall be
payable from the Disability Fund.
   3301.  (a) The purpose of this chapter is to establish, within the
state disability insurance program, a family temporary disability
insurance program to provide up to six weeks of wage replacement
benefits to workers who take time off work to care for a seriously
ill child, spouse, parent, domestic partner, or to bond with a new
child.
   Nothing in this chapter shall be construed to abridge the rights
and responsibilities conveyed under the CFRA or pregnancy disability
leave.
   (b) An individual's "weekly benefit amount" shall be the amount
provided in Section 2655.
   (c) The maximum amount payable to an individual during any
disability benefit period for family temporary disability insurance
shall be six times his or her "weekly benefit amount," but in no case
shall the total amount of benefits payable be more than the total
wages paid to the individual during his or her disability base
period.  If the benefit is not a multiple of one dollar ($1), it
shall be computed to the next higher multiple of one dollar ($1).
   (d) No more than six weeks of family temporary disability
insurance benefits shall be paid within any 12-month period.
   3302.  For purposes of this part:
   (a) "Child" means a biological, adopted, or foster son or
daughter, a stepson or stepdaughter, a legal ward, a son or daughter
of a domestic partner, or a son or daughter of an employee who stands
in loco parentis to that child.
   (b) "Family care leave" means any of the following:
   (1) Leave for reason of the birth of a child of the employee or
the employee's domestic partner, the placement of a child with an
employee in connection with the adoption or foster care of the child
by the employee or domestic partner, or the serious health condition
of a child of the employee, spouse or domestic partner.
   (2) Leave to care for a parent, spouse, or domestic partner who
has a serious health condition.
   (c) "Parent" means a biological, foster, or adoptive parent, a
stepparent, a legal guardian, or other person who stood in loco
parentis to the employee when the employee was a child.
   (d) "Domestic partner" has the same meaning as defined in Section
297 of the Family Code.
   (e) "Family member" means child, parent, spouse, or domestic
partner as defined in this section.
   (f) "Serious health condition" means an illness, injury,
impairment, or physical or mental condition that involves inpatient
care in a hospital, hospice, or residential health care facility, or
continuing treatment or continuing supervision by a health care
provider, as defined in Section 12945.2 of the Government Code.
   3303.  (a) An individual shall be deemed eligible for family
temporary disability insurance benefits on any day in which he or she
is unable to perform his or her regular or customary work because he
or she is caring for a new child during the first year after the
birth or placement of the child or a seriously ill child, parent,
spouse, or domestic partner, subject to a waiting period of seven
consecutive days during each family temporary disability benefit
period where no benefits are payable within that period.
   (b) An individual is not eligible for family temporary disability
insurance benefits with respect to any day that he or she has
received unemployment compensation benefits under Part 1 (commencing
with Section 100) or under an unemployment compensation act of any
other state or of the federal government.
   (c) An individual is not eligible for family temporary disability
insurance benefits with respect to any day of unemployment and
disability for which he or she has received, or is entitled to
receive, "other benefits" in the form of cash benefits as defined in
subdivision (b) of Section 2629.
   (d) An individual is not eligible for family temporary disability
insurance benefits with respect to any day that he or she is entitled
to receive state disability insurance benefits under Part 2
(commencing with Section 2601) or under a disability insurance act of
any other state.
   (e) An individual is not eligible for family temporary disability
insurance benefits with respect to any day that another family member
is able and available for the same period of time that the
individual is providing the required care.
   (f) An individual who is entitled to leave under the FMLA and the
CFRA must take Family Temporary Disability Insurance (FTDI) leave
concurrent with leave taken under the FMLA and the CFRA.
   (g) As a condition of an employee's initial receipt of family
temporary disability insurance benefits during any 12-month period in
which an employee is eligible for these benefits, an employer may
require an employee to take up to two weeks of earned but unused
vacation leave prior to the employee's initial receipt of these
benefits.  If an employer so requires an employee to take vacation
leave, that portion of the vacation leave that does not exceed one
week shall be applied to the waiting period required under
subdivision (a).  This subdivision may not be construed in a manner
that relieves an employer of any duty of collective bargaining the
employer may have with respect to the subject matter of this
subdivision.
   3304.  Eligible workers shall receive benefits in accordance with
provisions established under this division.
   3305.  If the director finds that any individual falsely certifies
the medical condition of any person in order to obtain family
temporary disability insurance benefits, with the intent to defraud,
whether for the maker or for any other person, the director shall
assess a penalty against the individual in the amount of 25 percent
of the benefits paid as a result of the false certification.  The
provisions of this article, the provisions of Article 9 (commencing
with Section 1176) with respect to refunds, and the provisions of
Chapter 7 (commencing with Section 1701) with respect to collections
shall apply to the assessments provided by this section.  Penalties
collected under this section shall be deposited in the contingent
fund.
  SEC. 7.  This act shall become operative on January 1, 2004, except
that benefits shall be payable for periods of family temporary
disability leave commencing on or after July 1, 2004.
  SEC. 8.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.