BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Richard Alarcon, Chair
Date of Hearing: May 8, 2002 2001-2002 Regular
Session
Consultant: Stephen Holloway Fiscal: Yes
Urgency:No
Bill No: SB 1661
Author: Kuehl
Amended: May 6, 2002
Subject: Disability Insurance: Family Members
Purpose:
To permit 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, as
defined, or the birth, adoption, or foster care placement
of a new child.
To establish, within the state disability insurance
program, a family temporary disability insurance program to
provide up to 12 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.
Analysis:
1. Disability Insurance. California is one of five
states to offer a non-occupational disability insurance
program (SDI). The other states are Rhode Island, New
Jersey, New York and Hawaii. (see Attachment A.)
The majority of California employees, approximately 12
million workers, are covered by the SDI program. Some
employees are exempt from SDI; for example, railroad
employees, some employees of non-profit agencies, employees
who claim religious exemptions, and most government
employees. Some local government workers, including school
employees, may be entitled to SDI benefits as a function of
collective bargaining. Self-employed individuals may
elect, under specified conditions, to be covered.
The Employment Development Department (EDD) is authorized
to pay state disability insurance (SDI) benefits as partial
wage replacement to employees who are disabled. Disability
is defined as any mental or physical illness or injury
which prevents an employee from performing his or her
regular or customary work. This includes elective surgery
and illness or injury resulting from pregnancy, childbirth
or related conditions. A claimant establishes 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.
SDI is financed through a mandatory payroll contribution by
employees which is paid into the Disability Fund. The
Director of Employment Development determines the
contribution rate, based upon a statutory formula. On or
before October 31 of each calendar year the director is
required to prepare a statement, which is a public record,
declaring the rate (rounded to the nearest one-tenth of one
percent) of worker contributions for the calendar year and
notify promptly all employers of employees covered for
disability insurance of the rate.
The current contribution rate is 0.9 percent of wages not
to exceed approximately $46,300 per year (i.e. the worker's
contribution is about $ 417) In 2003, the wage base will
increase to about $56,900. The maximum contribution rate
cannot exceed 1.3 percent.
The weekly benefits replace 55% of base period earnings,
from $50 per week to a maximum of $490. Future SDI benefit
increases are tied to the level of workers' compensation
temporary disability benefits for work-related injuries.
Workers' compensation temporary disability benefits are
scheduled to increase from $490 to $602 for injuries
occurring on and after January 1, 2003, to $728 for
injuries occurring on or after January 1, 2004, and to $840
for injuries occurring on or after January 1, 2005.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 2
Senate Committee on Labor and Industrial Relations
Commencing January 1, 2006, and each January 1 thereafter,
the maximum and minimum benefit is increased by an amount
equal to the percentage increase in the "state average
weekly wage" as compared to the prior year.
Every claim is assessed a seven-day non-payable waiting
period. Benefits may be collected for up to 52 weeks.
An employer is not required to hold a job simply because an
employee is receiving SDI benefits. An employee does have
the right to return to his or her job if the employee is
covered by mandatory leave laws such as pregnancy leave or
family care and medical leave (see #4 and #5, infra).
For 2001, total first claims paid for disability insurance
equaled 656,400. Of these claims, 145,700 were for
pregnancy-related first claims.
The average duration for a claim in 2001 was 13.87 weeks.
The average weekly benefit amount was $292.60 in 2001.
2) Voluntary Plans. An employer is permitted to offer
employees a voluntary disability plan (VP) in place of SDI
coverage. A VP must provide all the benefits of SDI and at
least one benefit that is better than SDI. VP's are
approved by the director and a majority of the employees
must consent to the plan. Neither an employee nor his or
her employer is liable for worker contributions to the
Disability Fund while the worker is covered by a VP.
However, an employer must pay into the Disability Fund an
amount equal to 14 percent of the amount employees would
have otherwise paid into the fund had they not been covered
by a VP.
An employer may, but need not, assume all or part of the
cost of a VP and may deduct wages for the purpose of
providing benefits. An employee's rate of contribution
cannot exceed the amount paid by an employee who is covered
by SDI.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 3
Senate Committee on Labor and Industrial Relations
3) EDD Pregnancy Disability Policy. Historically, EDD
has allowed up to four weeks pre-partum and six weeks
post-partum disability leave without requiring the worker
to obtain additional information from her treating
physician beyond stating that the disability is for a
normal pregnancy. EDD has based this policy on established
medical guidelines for medical disabilities and accepted
practice in the medical community to allow four weeks
pre-partum and six weeks post-partum leave.
4) Pregnancy Disability Leave (PDL). The Fair
employment and Housing Act makes it an unlawful employment
practice for an employer to refuse to allow a female
employee affected by pregnancy, childbirth, or related
medical condition to take a leave on account of pregnancy
for a reasonable period of time, not to exceed four months.
"Reasonable period of time" means the amount of time the
female employee is disabled on account of
pregnancy, childbirth, or related medical condition.
An employer is not required to pay an employee on PDL
unless the employer pays for other types of disability
leave. If an employer pays for other disability leaves,
the employer must pay an employee on PDL up to six weeks
paid leave. PDL applies to any person regularly employing
five or more persons, or any person acting as an agent of
an employer, directly or indirectly, the state or any
political or civil subdivision or the state, and cities,
with specified exceptions.
5) Family Care and Medical Leave. The California Family
Rights Act (CFRA) makes it an unlawful employment practice
for any employer to refuse to grant a request by any
employee with more than one year of service with the
employer and who has worked at least 1,250 hours during the
previous 12-month period, to take family care and medical
leave for up to 12 workweeks: 1) in connection with the
birth or adoption or serious health condition of the
employee's child; 2) to care for a parent or spouse who has
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 4
Senate Committee on Labor and Industrial Relations
a serious health condition, or; 3) because of the
employee's own serious health condition. This provision
applies to employer who employs 50 or more employees within
75 miles of the employee's worksite, the state and any
political or civil subdivision of the state and cities.
Under the CFRA, an employee's pregnancy is not considered a
serious health condition that would allow her to take CFRA
leave. However, the employee can take CFRA leave for
reason of the birth of a child of the employee, i.e., leave
for "baby bonding." CFRA leave is unpaid leave.
6) Sick Leave. Existing law provides that any employer who
provides sick leave for employees must permit an employee
to use in any calendar year the employee's accrued and
available sick leave entitlement, in an amount not less
than the sick leave that would be accrued during six months
at the employee's then current rate of entitlement, to
attend to an illness of a child, parent, spouse, or
domestic partner of the employee.
All conditions and restrictions placed by the employer upon
the use by an employee of sick leave also apply to the use
by an employee of sick leave to attend to an illness of his
or her child, parent, spouse, or domestic partner.
No employer can deny an employee the right to use sick
leave or discharge, threaten to discharge, demote, suspend,
or in any manner discriminate against an employee for
using, or attempting to exercise the right to use, sick
leave to attend to an illness of a child, parent, spouse,
or domestic partner of the employee.
Thus, under existing law, an employer may have an "absence
control policy" which allows the employer to discipline an
employee for excessive absenteeism. But, an employee cannot
be discriminated against for taking time off to care for a
child, parent spouse, or domestic partner. However, since
"all conditions and restrictions placed by the employer
upon the use by an employee of sick leave also apply to the
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 5
Senate Committee on Labor and Industrial Relations
use by an employee of sick leave to attend to an illness of
his or her child, parent, spouse, or domestic partner" an
employer may use these latter absences as part of an
absence control policy.
This Bill:
1) Expands disability insurance rights and benefits due to
an employee's need to provide care for any sick or injured
family member, as defined, or the birth, adoption, or
foster care placement of a new child.
2) Creates a family temporary disability insurance program
to provide up to 12 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.
Defines "Family care leave" to mean 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.
Defines "Serious health condition" to mean 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.
Provides that 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 or a seriously ill child, parent, spouse, or domestic
partner, subject to a waiting period of seven consecutive
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 6
Senate Committee on Labor and Industrial Relations
days during each temporary family disability benefit period
with respect to which waiting period no benefit are
payable.
Provides that the certificate filed to establish medical
eligibility of the serious health condition of the family
member that warrants the care of the employee need not
identify the serious health condition involved, but must
contain specified information, including: 1) The probable
duration of the condition; 2) 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; and, 3) 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.
States that "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.
Provides that fifty percent of the benefits must be
provided from the Disability Fund into which the employee's
family temporary disability insurance (FTDI) premium is be
deposited. The director must increase the rate of worker
contributions 0.05 percent to cover the cost of family
temporary disability insurance benefits. The director must
annually adjust the FTDI premium rate if a change is
necessary to support the cost incurred by FTDI benefit
payments. The director is to maintain a separate accounting
of the cost of benefits paid pursuant to this program.
Beginning in 2004, the director is to provide an annual
accounting of this cost as part of the fund status report
submitted
to the Legislature each May and October.
Provides that the balance of the benefits are to be
provided by the employer to the employee, either directly
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 7
Senate Committee on Labor and Industrial Relations
or by means of insurance procured by the employer.
An employer may elect to contribute an amount equal to the
employee's FTDI premium into the Disability Fund.
Employers, other than those electing to contribute into the
Disability Fund must, as applicable, provide for the
assumption by an admitted disability insurer of the
liability of the employer, file with the director a bond of
an admitted surety insurer conditioned on the payment by
the employer of its obligations, deposit with the director
securities approved by the director to secure the payment
of obligations, or deposit with the director an irrevocable
letter of credit.
Employers who elect to not contribute into the Disability
Fund must annually pay a regulatory fee to the department
in an amount, as specified, that is necessary to fund the
department's administrative costs incurred in administering
and monitoring the compliance of those employers with his
program. The regulatory fee may not exceed an amount equal
to 14 percent of the total FTDI premium paid by the
employer's employees into the fund.
Comments:
1. Staff Comments
This bill raises several issues regarding the scope and
design of a paid family sick leave program.
Coverage.
1) The SDI program and this bill do not cover government
employees, with limited exceptions.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 8
Senate Committee on Labor and Industrial Relations
Local public employers, including public school
employers, may elect SDI coverage for employees of a
specified bargaining unit, provided the election is the
result of a negotiated agreement.
Employees of the State of California, California State
University and the California Legislature are not
eligible for the SDI program and, instead, are provided
non-occupational disability payments through the NDI
program which is funded through the General Fund.
The NDI program was created in 1976 and the formula for
establishing weekly benefits was tied to the average
state employee's salary at the time. Since 1976, NDI
weekly benefits have been increased once, by $10 per
week. The weekly maximum benefit under NDI is $135.
Unlike SDI, however, NDI benefits are taxed as income.
Moreover, unlike SDI benefits, which have a duration of
52 weeks, NDI benefits are available for only 26 weeks.
Should local government employees be required to
collectively bargain for paid sick leave while private
sector employees are not?
Given the disparity in benefits between SDI and NDI,
should state government employees be included in a paid
family sick leave program?
It should be noted that the bill references the CFRA in
its intent section, which covers the public sector.
2) PDL applies to employers with five employees or more.
CFRA applies to employers with 50 or more employees
within 75 mile radius. These thresholds were established
to balance the needs of the employee against undue
hardship to the employer caused by the employee's
absence.
SDI covers private sector employees regardless of the
size of the establishment within which the employee
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 9
Senate Committee on Labor and Industrial Relations
works.
Is an employment threshold a necessary element in a paid
sick leave program?
Benefits.
Existing law and the amendments to existing law by this
bill apply to benefits payable up to 52 weeks. The new
program created by this bill relating to seriously ill
family members limits benefit payment to 12 weeks.
Should leave for a serious illness be limited to 12
weeks? Alternatively, should paid sick leave be
restricted to this new program?
Job Security.
An employer is not required to hold a job for an employee
who is receiving SDI benefits. There are approximately
5,368,000 private sector employees who work for
enterprises employing less than 50 workers, i.e. not
covered by CFRA, and, therefore, do not have job
protection for taking sick leave.
Financing.
The new program created by this bill provides that 50
percent of the benefits are to be provided by the
employer to the employee, either directly or by means of
insurance procured by the employer. An employer may
elect to contribute an amount equal to the employee's
FTDI premium into the Disability Fund. Those employers
who can pay the benefit directly or obtain insurance will
do so, presumably, because the cost would be less that
contributing into the Disability Fund. In essence, such
employers would not be paying their "fair share." If
employers are to pay a portion of a paid sick leave
program, how can this inequity be avoided? This problem
is partially remedied with VP's because the employer must
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 10
Senate Committee on Labor and Industrial Relations
furnish benefits in excess of SDI.
Further, to what extent, if any, should an employer's
paid sick leave program be incorporated into a statewide
paid family sick leave program?
2. Proponents:
This measure finds and declares that 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 parents 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.
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.
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-work weeks 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.
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
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 11
Senate Committee on Labor and Industrial Relations
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.
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.
It is the intent of the Legislature to create a family
temporary disability insurance program to help reconcile
the demands of work and family. In recognition of the
shared benefit of this program, the family temporary
disability insurance program shall be implemented through
employee contributions and the provision of benefits by
employers, and shall be administered in accordance with
the policies of the state disability insurance program
created pursuant to this part.
The California Labor Federation, the sponsor of this
bill, states that while federal and state laws guarantee
unpaid family and medical leave for childbirth or family
illness, many families simply cannot afford to take time
off. This is a family values issue. This legislation
will go a long way in supporting working families in
their efforts to cope with work and family.
The California Medical Association states that such a
program (as proposed in this bill) could offset costs of
hospitalization or skilled nursing services for persons
that could be cared for at home in a hospitable and less
costly setting. Perhaps, even more importantly it would
promote caring for family members and loved ones by
family members and loved ones . . . a bond too often
absent from society today.
The California National Organization for Women argues
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 12
Senate Committee on Labor and Industrial Relations
that most people cannot afford to take time off work
without pay and are therefore unable to help family
members who are in urgent need of care. Employees who
have family responsibilities should not be put in the
position of having to choose between a paycheck and a
loved one.
3. Opponents :
The California Manufacturers and Technology Association
(CMTA) is opposed to SB 1661.
CMTA states that SB 1661 would establish within the state
disability insurance program, a family temporary
disability insurance program to provide up to 12 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. CMTA is
not opposed to this provision.
The bill also proposes to pay for the additional benefits
through additional employee contributions, and by
requiring employers to provide benefits either directly,
through private insurance, or by an election to
contribute to the Disability Fund. CMTA is opposed to
the mandate on employers to provide these additional
benefits in any form except on a voluntary basis. Our
past experiences with proposals similar to SB 1661 have
all indicated that it is an expensive program that may be
greatly expanded by aggressive utilization.
The state disability insurance program is an
employee-paid program through payroll deductions. If
employees are interested in adding dependent coverage, I
don't believe CMTA would oppose it even though it would
add more administrative costs and disruptions of work due
to more employee absences. However, along with making
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 13
Senate Committee on Labor and Industrial Relations
the decision to add dependent coverage, employees should
expect to have to pay more for the coverage.
While CMTA takes no position on the proposal to expand
the state disability insurance program to cover
dependents at this time, we may have to change our
position after our members have fully evaluated it. CMTA
is opposed to the mandate of employer contributions to
the proposal and request this provision be removed from
the bill.
The California Chamber of Commerce opposes this bill
which mandates the establishment of a new paid leave
benefit program paid for by new taxes levied on all
employers and their workers.
SB 1661 proposes to establish up to twelve weeks annually
of paid leave benefits for all workers from the state
disability insurance (SDI) program to care for ill
children, spouse, or parents, as well as for leave for
the birth, adoption, or foster care placement of a child.
The California Chamber strongly opposes SB 1661's
establishment of two new taxes to pay for the proposed
paid leave benefit program; a proposed increase in the
current state disability insurance tax formula; plus the
proposed new 14 percent "regulatory fee" to be levied on
voluntary employer SDI plans.
Adding to the Chamber's concern, is the fact that the SDI
Trust Fund is nearly bankrupt. According to the
Employment Development Department (EDD), the SDI Trust
Fund reserve adequacy level has dropped alarmingly.
Legislation enacted in 1999 permanently linked the level
of SDI benefits to workers' compensation benefits. At
the time, EDD advised that the linkage would reduce SDI
Trust Fund reserves from a high of 91 percent in 1996 to
only 54 percent by the end of 2001 and that annual
average worker SDI taxes would increase from $191 to
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 14
Senate Committee on Labor and Industrial Relations
$278-a 53 percent increase.
In fact, in 2000 the administration imposed an
unprecedented two-tier SDI tax
increase on all workers to avoid SDI trust fund
bankruptcy in 2000. California Chamber members believe
SB 1661 places additional strain an already stressed
program.
The earlier EDD cost projections have proved to be
woefully inadequate and far too optimistic. New EDD
information shows that as of January 1, 2002, the SDI
Trust Fund reserves plummeted to only 15.4-a drop of
nearly 70 percent. Over the same period, California
worker paid SDI taxes have more than tripled. Because
the legislature recently increased the workers'
compensation benefits, SDI benefits must increase to
match the increased workers' compensation benefit.
Worker taxes will need to increase to meet the demands of
the higher benefits. Proponents of SB 1661 now want to
increase the percentage SDI taxes paid by workers; plus
impose additional, new taxes on both workers and
businesses.
Moreover, California Chamber members believe that SB
1661's new paid leave benefits, paid for by new mandated
taxes, is impermissible under federal law. The federal
Employment Retirement and Income Security Act (ERISA)
forbids states from establishing mandated employee
welfare benefits such as those contained in SB 1661.
Finally, employers are concerned that SB 1661 does not
contain any size limitation. The proposed leave program
will apply to all employers regardless of size.
California Chamber believes that this is unnecessary and
will harm small businesses in our state. The California
Chamber believes that bills like SB 1661 make it even
more difficult, and certainly much more expensive, to do
business in California.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 15
Senate Committee on Labor and Industrial Relations
3. Prior Legislation :
See Attachment B.
Support:
AFSCME
California Labor Federation, AFL-CIO (Sponsor)
Alliance for Retired American, Region 9
American Association of University Women -CA
American College of Obstetricians and Gynecologists,
District IX
American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO
Asian Law Caucus
Association of California Caregiver Resource Centers
California Advocates for Social Change
California Alliance for Pride and Equality (CAPE)
California Catholic Conference
California Child Care Resource & Referral Network
California Children and Families Commission
California Coalition for Youth (CCYFC)
California Commission on the Status of Women
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Faculty Association
California Federation of Teachers
California HIV Advocacy Coalition
California Independent Public Employees Legislative Council
California Medical Association
California National Organization for Women
California Professional Firefighters
California School Employees Association
California State Employees' Association
California Women's Law Center
Center for the Child Care Workforce
Center on Policy Initiatives
Childcare Health Program
Congress of California Seniors
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 16
Senate Committee on Labor and Industrial Relations
East Bay Community Law Center
Engineers and Scientist of California
Equal Rights Advocates
Family Caregiver Alliance
Fresno-Madera-Tulare-Kings Central Labor Council
Gray Panthers
Hotel Employees, Restaurant Employees International Union
Jericho
Labor Project for Working Families
Legal Aid Society, Employment Law Center
Older Women's League
Orfalen Family Foundation
Planned Parenthood Affiliates of California
Teamsters
United Food & Commercial Workers Region 8 States Council
UTLA
Women's Employment Rights Clinic, Golden Gate School of Law
Opposition:
California Association of Health Facilities (CAHF)
California Chamber of Commerce
California Healthcare Association
California Independent Grocers Association
California Manufacturers and Technology Association (CMTA)
California Restaurant Association
Campaign for California Families
Employers Group
* * *
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 17
Senate Committee on Labor and Industrial Relations
Attachment A
Temporary Disability Laws in Other States
Hawaii (est. 1969)
Hawaii's Temporary Disability Insurance (TDI) requires
employers to provide reasonable compensation for wage loss
to employees who become sick or disabled, including
pregnancy, from non-work-related causes. It is a legally
required sick leave program to cover absences not otherwise
covered by Workers' Compensation.
Coverage is the same as under the unemployment insurance
law and includes state and local government employees.
To be eligible, an employee must have been in employment
for at least 14 consecutive
weeks during each of which he or she was paid for 20 hours
or more and earned not less than $400 in the four completed
calendar quarters before the disability.
Disabled workers are entitled to 58% of their average
weekly wage or a Maximum Weekly Wage Base (whichever is
less) after a seven-day waiting period for as long as 26
weeks.
The maximum weekly benefit amount for 2002 is $396.
The cost to provide TDI benefits may be shared by the
employee provided that this share does not exceed one-half
of total cost of the policy and/or .5 percent of the
employee's weekly wage base.
The TDI program is financed entirely by deductions from an
employee's wages. The current withholding rate is 1.5% on
first $44,000 earned.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 18
Senate Committee on Labor and Industrial Relations
New Jersey (est. 1948)
TDI benefits are limited to a non-occupational illness or
disability, including pregnancy.
Any governmental entity or instrumentality may elect
coverage, if covered by the unemployment insurance law. A
covered government employee must exhaust all sick leave
before becoming eligible for disability benefits.
New Jersey's temporary disability insurance (TDI) program
has three components: the state plan, private plans, and
disability during unemployment. Employers are permitted,
however, to provide disability insurance coverage to
employees through private plans approved by the state.
These plans must provide coverage that meets or exceeds
state plan benefits with respect to compensation,
eligibility requirements and payment duration.
Both the state and private plans extend coverage to
disabilities that begin within 14 days
after the last day of employment. After the 14th day,
workers are covered under the disability during
unemployment program. This separate program is administered
as part of the unemployment compensation system.
Benefits are equal to two-thirds of a worker's weekly
wages, up to a maximum of $339 per week, for up to 26
weeks. There is a one-week wait period.
The state plan levies a tax on employers (subject to
experience rating) and employees of .5 percent of the first
$22,100 of wages.
New York (1949)
Disability benefits are temporary cash benefits paid to an
eligible wage earner, when he/she is disabled by an off the
job injury or illness, including pregnancy.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 19
Senate Committee on Labor and Industrial Relations
State government employees are not included; public
authorities and municipal corporations may elect to cover
their employees.
The cash benefits are 50 percent of a claimant's average
weekly wage, but no more than the maximum benefit allowed.
Effective May 1, 1989, the maximum benefit allowance for
any disability is $170 a week.
Benefits are paid for a maximum of 26 weeks of disability
during 52 consecutive weeks. For employed workers, there is
a 7-day waiting period for which no benefits are paid.
An employer is allowed, but not required, to collect
contributions from its employees to offset the cost of
providing benefits. An employee's contribution is computed
at the rate of one-half of one percent of his/her wages,
but no more than sixty cents a week; any additional costs
are paid by employers.
Rhode Island (est. 1942)
To be medically eligible for TDI benefits, a licensed
physician must certify to that an employee cannot work for
at least seven consecutive days. For eligibility to begin
with the first week of disability, the employee must be
examined by a doctor in either that week, or the week
immediately before, or immediately after, the first week of
disability. Pregnancy is treated the same way as any
potentially disabling condition.
State and local government employees are not covered.
There is a seven-day wait period at the start of a new
claim. Benefits are paid for this period only if the
disability lasts for 28 days or more.
The maximum weekly benefit rate is $527 for up to 30 weeks.
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 20
Senate Committee on Labor and Industrial Relations
In addition to weekly benefit rate, a dependency Allowance
may be received if the employee has dependent children
under 18. The amount of the weekly allowance is equal to
the greater of $10 or 7% of the weekly benefit rate.
* * *
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 21
Senate Committee on Labor and Industrial Relations
Attachment B
Recent Legislation Related to Disability Insurance and Sick
Leave
1999-2000 Session
AB 109 Knox Sick Leave
Chapter 164, Statutes of
1999
Provides that any employer who provides sick leave for
employees must permit an employee to use in any calendar
year the employee's accrued and available sick leave
entitlement, in an amount not less than the sick leave that
would be accrued during six months at the employee's then
current rate of entitlement, to attend to an illness of a
child, parent, spouse, or domestic partner of the employee.
("Domestic partner" added by AB 25 (Migden) Ch. 893,
Stats. 2001.)
AB 2815 Kuehl State Employees
Vetoed by the Governor
Allows employees of the State of California, the California
Legislature and the California State University to be
covered by the State Disability Insurance program.
The Governor stated in his veto message, "To the best of my
knowledge, this bill conveys no new rights or benefits to
employees. Whether or not this bill becomes law, employees
have the very same rights to negotiate at the bargaining
table for these benefits.
SB 118 Hayden Family Care and Medical Leave
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 22
Senate Committee on Labor and Industrial Relations
Vetoed by the Governor
Provides that an employee may take family care and medical
leave to care for a grandparent or sibling, or domestic
partner, as defined, as well as an adult child, who has a
serious health condition or to care for an individual who
depends on the employee for immediate care and support, who
shares a common residence with the employee and who has a
serious health condition.
The governor stated in his veto message: "This measure,
while well-intentioned, extends the right (to take time
off) far beyond what any other state has permitted to a
relationship outside the family - specifically, to
individuals who live together to share expenses if one of
those individuals subsequently becomes seriously ill."
SB 1149 Speier Family Care and Medical Leave
Provisions Deleted, See SB
1149, infra
Provides that the CFRA applies to employers who employ 20
or more employees within 75 miles of the worksite where
that employee is employed.
SB 1149 Hayden Family Care and Medical Leave
Vetoed
by the Governor
This bill is essentially the same as SB 118 and provides
that an employee may take family care and medical leave to
care for a grandparent or sibling, or domestic partner, as
defined, as well as an adult child, who has a serious
health condition, but does not include the provision
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 23
Senate Committee on Labor and Industrial Relations
relating to caring for an individual who depends on the
employee for immediate care and support, who shares a
common residence with the employee and who has a serious
health condition.
The Governor stated in his veto message, "As I said when I
vetoed an earlier bill by this author [i.e. SB 118], I
would be pleased to consider reasonable changes to the
Domestic Partner Act next year."
SB 656 Solis SDI Weekly Benefit
Amount
Chapter 973, Statutes of
1999
Increases the maximum disability benefit from $336 to $490
per week, making State Disability Insurance (SDI) benefits
equal to weekly benefits for workers' compensation
temporary disability and indexes SDI levels to future
workers' compensation temporary disability increases.
The bill also requires the Employment Development
Department to conduct a cost study, reporting to the
Legislature by July 1, 2000, on expanding the definition of
"disabled" for the purpose of qualifying for SDI benefits
individuals on leave pursuant to the Family Rights Act
(FRA).
AB 1844 WashingtonPregnancy Disability Leave
Died, Senate
Appropriations
Committee (2000)
Allows a pregnant woman to be eligible for disability
benefits for a period of 10 weeks, as specified.
2001-2002 Session
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 24
Senate Committee on Labor and Industrial Relations
SB 1197 Romero Sick Leave
Vetoed by the Governor
Prohibits a public or private employer from adopting an
absence control policy that disciplines employees for use
of sick leave to attend to an illness of an employee's
child, parent, or spouse.
The governor stated in his veto message, "I agree employees
should have a right to use one half of their paid sick
leave to attend to a sick child, parent or spouse. That is
why I signed those provisions into law in 1999 (AB 109
Knox)."
SB 1471 Romero Sick Leave
Passed Senate Labor and
Industrial Relations
Committee, April 10,
2002
Prohibits a public or private employer from adopting an
absence control policy that disciplines employees for use
of sick leave to attend to an illness of an employee's
child, parent, or spouse.
* * *
Hearing Date: May 8, 2002 SB
1661
Consultant: Steven Holloway
Page 25
Senate Committee on Labor and Industrial Relations