BILL NUMBER: SB 727 CHAPTERED 10/11/03 CHAPTER 797 FILED WITH SECRETARY OF STATE OCTOBER 11, 2003 APPROVED BY GOVERNOR OCTOBER 10, 2003 PASSED THE SENATE SEPTEMBER 2, 2003 PASSED THE ASSEMBLY AUGUST 28, 2003 AMENDED IN ASSEMBLY AUGUST 25, 2003 AMENDED IN ASSEMBLY JUNE 30, 2003 AMENDED IN SENATE MAY 14, 2003 AMENDED IN SENATE APRIL 28, 2003 INTRODUCED BY Senator Kuehl FEBRUARY 21, 2003 An act to amend Sections 4903 and 4904 of the Labor Code, and to amend Sections 140.5, 984, 1143, 2601, 2613, 2656, 2676, 2679, 2707.5, 2708, 2708.1, 2709, 2714, 3012, 3253, 3254, 3300, 3301, 3302, 3303, and 3305 of, to amend the heading of Chapter 7 (commencing with Section 3300) of Part 2 of Division 1 of, and to add Sections 3302.1, 3303.1, and 3306 to, the Unemployment Insurance Code, relating to disability compensation. LEGISLATIVE COUNSEL'S DIGEST SB 727, Kuehl. Unemployment and disability compensation: family temporary disability insurance. Under existing law, the family temporary disability insurance program provides 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. These benefits are payable for family temporary disability leaves that begin on and after July 1, 2004. This bill would make conforming and clarifying changes in provisions relating to family temporary disability compensation. Existing law also requires that an individual claiming disability benefits establish medical eligibility by filing a claim supported by a certificate of a treating physician or practitioner that establishes, among other things, the condition of the family member. This bill would require that the Employment Development Department develop a certificate that the individual taking leave to care for a family member shall file, and require that the certificate be within the knowledge of the physician or practitioner and be based on a physical examination and documented medical history of the family member. Existing law requires the Director of the Employment Development Department to assess a penalty against an individual who, with the intent to defraud, falsely certifies the medical condition of any person to obtain family temporary disability insurance benefits. This bill would also apply certain existing unemployment insurance provisions to family disability insurance benefit provisions. This bill would also define the disability benefit period for purposes of the family temporary disability insurance program, clarify the amount of benefits an individual is eligible to receive each full day under the program, and authorize the director to require the care recipient to submit to reasonable examinations, as provided. Existing law requires workers to pay contributions to the Disability Fund at the rate determined by the director, and authorizes the director to increase or decrease that rate, as specified, if the director determines an adjustment is necessary to reimburse the Disability Fund for disability benefits paid or to be paid, or to prevent the accumulation of funds in excess of those needed to maintain an adequate fund balance. This bill would prohibit the director from decreasing the rate of worker contributions for the 2004, 2005, and 2006 calendar years, regardless of whether the director determines a decrease is necessary to prevent the accumulation of funds in excess of those needed to maintain the adequacy of the Disability Fund during program implementation. Existing workers' compensation law authorizes the Workers' Compensation Appeals Board to determine and allow specified expenses as liens against any sum to be paid as compensation. This bill would additionally allow as a lien, against any sum to be paid as compensation, the amount of family temporary disability insurance benefits that have been paid to an injured employee, as provided. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 4903 of the Labor Code is amended to read: 4903. The appeals board may determine, and allow as liens against any sum to be paid as compensation, any amount determined as hereinafter set forth in subdivisions (a) through (i). If more than one lien is allowed, the appeals board may determine the priorities, if any, between the liens allowed. The liens that may be allowed hereunder are as follows: (a) A reasonable attorney's fee for legal services pertaining to any claim for compensation either before the appeals board or before any of the appellate courts, and the reasonable disbursements in connection therewith. No fee for legal services shall be awarded to any representative who is not an attorney, except with respect to those claims for compensation for which an application, pursuant to Section 5501, has been filed with the appeals board on or before December 31, 1991, or for which a disclosure form, pursuant to Section 4906, has been sent to the employer, or insurer or third-party administrator, if either is known, on or before December 31, 1991. (b) The reasonable expense incurred by or on behalf of the injured employee, as provided by Article 2 (commencing with Section 4600) and, to the extent the employee is entitled to reimbursement under Section 4621, medical-legal expenses as provided by Article 2.5 (commencing with Section 4620) of Chapter 2 of Part 2. (c) The reasonable value of the living expenses of an injured employee or of his or her dependents, subsequent to the injury. (d) The reasonable burial expenses of the deceased employee, not to exceed the amount provided for by Section 4701. (e) The reasonable living expenses of the spouse or minor children of the injured employee, or both, subsequent to the date of the injury, where the employee has deserted or is neglecting his or her family. These expenses shall be allowed in the proportion that the appeals board deems proper, under application of the spouse, guardian of the minor children, or the assignee, pursuant to subdivision (a) of Section 11477 of the Welfare and Institutions Code, of the spouse, a former spouse, or minor children. A collection received as a result of a lien against a workers' compensation award imposed pursuant to this subdivision for payment of child support ordered by a court shall be credited as provided in Section 695.221 of the Code of Civil Procedure. (f) The amount of unemployment compensation disability benefits that have been paid under or pursuant to the Unemployment Insurance Code in those cases where, pending a determination under this division there was uncertainty whether the benefits were payable under the Unemployment Insurance Code or payable hereunder; provided, however, that any lien under this subdivision shall be allowed and paid as provided in Section 4904. (g) The amount of unemployment compensation benefits and extended duration benefits paid to the injured employee for the same day or days for which he or she receives, or is entitled to receive, temporary total disability indemnity payments under this division; provided, however, that any lien under this subdivision shall be allowed and paid as provided in Section 4904. (h) The amount of family temporary disability insurance benefits that have been paid to the injured employee pursuant to the Unemployment Insurance Code for the same day or days for which that employee receives, or is entitled to receive, temporary total disability indemnity payments under this division, provided, however, that any lien under this subdivision shall be allowed and paid as provided in Section 4904. (i) The amount of indemnification granted by the California Victims of Crime Program pursuant to Article 1 (commencing with Section 13959) of Chapter 5 of Part 4 of Division 3 of Title 2 of the Government Code. (j) The amount of compensation, including expenses of medical treatment, and recoverable costs that have been paid by the Asbestos Workers' Account pursuant to the provisions of Chapter 11 (commencing with Section 4401) of Part 1. SEC. 2. Section 4904 of the Labor Code is amended to read: 4904. (a) If notice is given in writing to the insurer, or to the employer if uninsured, setting forth the nature and extent of any claim that is allowable as a lien, the claim is a lien against any amount thereafter payable as compensation, subject to the determination of the amount and approval of the lien by the appeals board. When the Employment Development Department has served an insurer or employer with a lien claim, the insurer or employer shall notify the Employment Development Department, in writing, as soon as possible, but in no event later than 15 working days after commencing disability indemnity payments. When a lien has been served on an insurer or an employer by the Employment Development Department, the insurer or employer shall notify the Employment Development Department, in writing, within 10 working days of filing an application for adjudication, a stipulated award, or a compromise and release with the appeals board. (b) (1) In determining the amount of lien to be allowed for unemployment compensation disability benefits under subdivision (f) of Section 4903, the appeals board shall allow the lien in the amount of benefits which it finds were paid for the same day or days of disability for which an award of compensation for any permanent disability indemnity resulting solely from the same injury or illness or temporary disability indemnity, or both, is made and for which the employer has not reimbursed the Employment Development Department pursuant to Section 2629.1 of the Unemployment Insurance Code. (2) In determining the amount of lien to be allowed for unemployment compensation benefits and extended duration benefits under subdivision (g) of Section 4903, the appeals board shall allow the lien in the amount of benefits which it finds were paid for the same day or days for which an award of compensation for temporary total disability is made. (3) In determining the amount of lien to be allowed for family temporary disability insurance benefits under subdivision (h) of Section 4903, the appeals board shall allow the lien in the amount of benefits that it finds were paid for the same day or days for which an award of compensation for temporary total disability is made and for which the employer has not reimbursed the Employment Development Department pursuant to Section 2629.1 of the Unemployment Insurance Code. (c) In the case of agreements for the compromise and release of a disputed claim for compensation, the applicant and defendant may propose to the appeals board, as part of the compromise and release agreement, an amount out of the settlement to be paid to any lien claimant claiming under subdivision (f), (g), or (h) of Section 4903. If the lien claimant objects to the amount proposed for payment of its lien under a compromise and release settlement or stipulation, the appeals board shall determine the extent of the lien claimant's entitlement to reimbursement on its lien and make and file findings on all facts involved in the controversy over this issue in accordance with Section 5313. The appeals board may approve a compromise and release agreement or stipulation which proposes the disallowance of a lien, in whole or in part, only where there is proof of service upon the lien claimant by the defendant, not less than 15 days prior to the appeals board action, of all medical and rehabilitation documents and a copy of the proposed compromise and release agreement or stipulation. The determination of the appeals board, subject to petition for reconsideration and to the right of judicial review, as to the amount of lien allowed under subdivision (f), (g), or (h) of Section 4903, whether in connection with an award of compensation or the approval of a compromise and release agreement, shall be binding on the lien claimant, the applicant, and the defendant, insofar as the right to benefits paid under the Unemployment Insurance Code for which the lien was claimed. The appeals board may order the amount of any lien claim, as determined and allowed by it, to be paid directly to the person entitled, either in a lump sum or in installments. (d) Where unemployment compensation disability benefits, including family temporary disability insurance benefits, have been paid pursuant to the Unemployment Insurance Code while reconsideration of an order, decision, or award is pending, or has been granted, the appeals board shall determine and allow a final amount on the lien as of the date the board is ready to issue its decision denying a petition for reconsideration or affirming, rescinding, altering or amending the original findings, order, decision, or award. (e) The appeals board may not be prohibited from approving a compromise and release agreement on all other issues and deferring to subsequent proceedings the determination of a lien claimant's entitlement to reimbursement if the defendant in any of these proceedings agrees to pay the amount subsequently determined to be due under the lien claim. SEC. 3. Section 140.5 of the Unemployment Insurance Code is amended to read: 140.5. "Unemployment compensation disability benefits" or "disability benefits" refers to money payments payable under Part 2 (commencing with Section 2601) to either of the following: (a) An eligible unemployed individual with respect to his or her wage losses due to unemployment as a result of illness or other disability, resulting in that individual being unavailable or unable to work. (b) An eligible individual with respect to his or her wage losses who is unable to work due to caring for a seriously ill or injured family member or bonding with a minor child within one year of the birth or placement of the child in connection with foster care or adoption. SEC. 4. Section 984 of the Unemployment Insurance Code, as amended by Section 1 of Chapter 901 of the Statutes of 2002, 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) (1) Notwithstanding subdivision (a), and except as provided in paragraph (2), 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. (2) Notwithstanding paragraph (1), for the 2004, 2005, and 2006 calendar years, the director may not decrease the rate of worker contributions, regardless of whether the director determines that a decrease is necessary to prevent the accumulation of funds in excess of those needed to maintain the adequacy of the Disability Fund during program implementation. SEC. 5. Section 1143 of the Unemployment Insurance Code is amended to read: 1143. If the director finds that any individual falsely certifies the medical condition of any person in order to obtain disability insurance benefits, including 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. 6. Section 2601 of the Unemployment Insurance Code, as amended by Section 2 of Chapter 901 of the Statutes of 2002, 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 that fall on the unemployed worker and his or her family. SEC. 7. Section 2613 of the Unemployment Insurance Code, as amended by Section 3 of Chapter 901 of the Statutes of 2002, 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 the employee's need to bond with a minor child within the first year of the child's birth or placement in connection with foster care or adoption. The notice shall also instruct the employee to provide notification of the reason for taking leave in a manner consistent with company policy. 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 the need to bond with a minor child within the first year of the child's birth or placement in connection with foster care or adoption. SEC. 8. Section 2656 of the Unemployment Insurance Code is amended to read: 2656. (a) An individual eligible to receive disability benefits who receives wages or regular wages from his or her employer during the period of his or her disability or period of family care leave shall be paid disability benefits for any seven-day week or partial week in an amount not to exceed his or her maximum weekly amount which together with the wages or regular wages does not exceed his or her weekly wage, exclusive of wages paid for overtime work, immediately prior to the commencement of his or her disability or period of family care leave. (b) For purposes of this section, to determine the wages or regular wages received by the eligible individual, the amount as stated by the individual shall be presumed to be accurate. This presumption is one affecting the burden of producing evidence. (c) Except as provided in subdivision (g) of Section 3303, for purposes of periods of disability commencing on or after January 1, 1992, vacation pay is not considered wages for determining eligibility for disability benefits. SEC. 9. Section 2676 of the Unemployment Insurance Code is amended to read: 2676. An individual who is disqualified from receiving unemployment compensation benefits under Sections 1256, 1257, 1260, 1261, and 1263 shall be presumed to be ineligible to receive disability benefits under this part for the same period or periods unless he or she establishes to the satisfaction of the director that he or she is suffering a bona fide illness or injury or claiming a period of family care leave and the director finds that there is good cause for paying disability benefits. SEC. 10. Section 2679 of the Unemployment Insurance Code is amended to read: 2679. Notwithstanding any other provision of law, an individual who is otherwise eligible shall not be disqualified for benefits under this part for the day on which he or she or a family member, as defined in Chapter 7 (commencing with Section 3300), for whom the individual is providing care, died. SEC. 11. Section 2707.5 of the Unemployment Insurance Code is amended to read: 2707.5. (a) The department may for good cause reconsider any determination provided for in this part prior to the filing of an appeal therefrom, or within 30 days after an appeal to an administrative law judge is filed. The department shall promptly notify the claimant of any reconsidered determination, and the claimant may appeal therefrom in the manner prescribed in Section 2707.2. The director shall be an interested party to any appeal. (b) The department may for good cause reconsider any computation or recomputation provided for in this part within one year from the beginning date of the disability benefit period to which the notice of computation or recomputation relates, except that no recomputation may be considered with respect to any issue considered or under consideration in an appeal taken from a denial of recomputation. The department shall promptly notify the claimant of the recomputation. The claimant may protest the accuracy of the recomputation as prescribed in Section 2707.4. SEC. 12. Section 2708 of the Unemployment Insurance Code, as amended by Section 4 of Chapter 901 of the Statutes of 2002, is amended to read: 2708. (a) (1) 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. (2) 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 the physician's or practitioner's conclusion as to the claimant's disability, and a statement of the physician's or practitioner's opinion as to the expected duration of the disability. (b) An employee shall be required to file a certificate to establish eligibility when taking leave to care for a family member with a serious health condition. The certificate shall be developed by the department. In order to establish medical eligibility of the serious health condition of the family member that warrants the care of the employee, the information shall be within the physician's or practitioner's knowledge and shall be based on a physical examination and documented medical history of the family member and shall contain all of the following: (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) 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. (B) "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 bonding that is separate and distinct from the certificate required in subdivision (a) for an employee taking leave to bond with a minor child within the first year of the child's birth or placement in connection with foster care or adoption. (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: (1) "Physician" has the same meaning as defined in Section 3209.3 of the Labor Code. (2) "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 any or all of the following: (1) Identification of diagnoses. (2) Identification of symptoms. (3) A statement setting forth the facts of the claimant's disability. The statement shall be completed by any of the following individuals: (A) The physician or practitioner treating the claimant. (B) The registrar, authorized medical officer, or other duly authorized official of the hospital or health facility treating the claimant. (C) An examining physician or other representative of the department. SEC. 13. Section 2708.1 of the Unemployment Insurance Code is amended to read: 2708.1. (a) Except as provided in subdivision (b), where an individual is entitled to receive unemployment compensation disability benefits reduced by the amount of temporary workers' compensation received for any day under Section 2629, it shall not be necessary that he or she obtain a certificate of a physician as required by subdivision (a) of Section 2708 to receive the reduced amount of disability benefits for that day, provided that the claimant submits evidence to the department of receipt of temporary disability benefits under a workers' compensation law for that day. (b) This section does not apply to Chapter 7 (commencing with Section 3300). SEC. 14. Section 2709 of the Unemployment Insurance Code is amended to read: 2709. If any individual in good faith adheres to the teachings of any bona fide church, sect, denomination or organization and in accordance with its principles depends for healing entirely upon prayer or spiritual means, no medical examination shall be required, but in lieu thereof the director may accept the certificate of a duly authorized and accredited practitioner of that bona fide church, sect, denomination or organization as to the disability of the claimant, or the serious health condition of the family member that warrants the care of the individual, for purposes of Chapter 7 (commencing with Section 3300) of Part 2, and the estimated duration of such disability, and no authorized regulation prescribing the manner of proof of illness, injury, or serious health condition shall discriminate against that individual. SEC. 15. Section 2714 of the Unemployment Insurance Code is amended to read: 2714. All medical records of the department obtained under this part, except to the extent necessary for the proper administration of this part, or as provided elsewhere in law shall be confidential and shall not be published or be open to public inspection in any manner revealing the identity of the claimant or family member, or the nature or cause of his or her disability. Medical records that are disclosed shall be disclosed only pursuant to Section 1095, and shall remain confidential. SEC. 16. Section 3012 of the Unemployment Insurance Code is amended to read: 3012. (a) Notwithstanding Section 13340 of the Government Code, all money in the Disability Fund is continuously appropriated for the purpose of providing disability benefits pursuant to this part, including the payment of refunds, credits, or judgments, and interest thereon, the payment of disability benefits to all eligible persons not covered exclusively by an approved voluntary plan, and the payment of the expenses of administration of this part and Section 17061 of the Revenue and Taxation Code by the department and the Franchise Tax Board. "Eligible persons" as used in this section, means those individuals who are covered by the Disability Fund at the time his or her disability benefit period commences, or whose employment has terminated or who is in noncovered employment at the time his or her disability benefit period commences, and who is otherwise eligible for benefits under this part. (b) For the purpose of keeping a record of the payments to and the disbursements from the Disability Fund with respect to the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability period commences, the director shall maintain the Unemployed Disabled Account in the Disability Fund. This account shall be credited with 12 percent of the product obtained by multiplying the rate of worker contributions as determined in Section 984, by the amount of the taxable wages paid to employees covered by voluntary plans for disability benefits for each calendar year. This account shall also be credited with an amount equal to 12 percent of the product obtained by multiplying the rate of worker contributions, as determined in Section 984, by the amount of the taxable wages paid to employees covered by the Disability Fund for each calendar year. This account shall be charged each calendar year with disbursements from the Disability Fund for the payment of benefits and the additional administrative costs of the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability benefit period commences. SEC. 17. Section 3253 of the Unemployment Insurance Code is amended to read: 3253. Except as provided in this part, an employee covered by an approved voluntary plan at the commencement of a disability benefit period shall not be entitled to benefits from the Disability Fund. Benefits payable to that employee shall be the liability of the approved voluntary plan under which the employee was covered at the commencement of the disability benefit period, regardless of any subsequent disabling condition which may occur during that disability benefit period. The Director of Employment Development shall prescribe authorized regulations to allow benefits to individuals simultaneously covered by one or more approved voluntary plans and the Disability Fund. SEC. 18. Section 3254 of the Unemployment Insurance Code, as amended by Section 5 of Chapter 901 of the Statutes of 2002, 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), including 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 withdrawal from 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 withdrawn 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 withdrawal from 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 withdrawn 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. 19. The heading of Chapter 7 (commencing with Section 3300) of Part 2 of Division 1 of the Unemployment Insurance Code is amended to read: CHAPTER 7. PAID FAMILY LEAVE SEC. 20. Section 3300 of the Unemployment Insurance Code is amended to read: 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 the participation of both parents 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) Family Temporary Disability Insurance shall be known as Paid Family Leave. (c) 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. (d) 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. (e) 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. (f) 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. (g) 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. SEC. 21. Section 3301 of the Unemployment Insurance Code is amended to read: 3301. (a) (1) The purpose of this chapter is to establish, within the state disability insurance program, a family temporary disability insurance program. Family temporary disability insurance shall 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 minor child within one year of the birth or placement of the child in connection with foster care or adoption. (2) 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. An individual is eligible to receive family temporary disability insurance benefits equal to one-seventh of his or her weekly benefit amount for each full day during which he or she is unable to work due to caring for a seriously ill or injured family member or bonding with a minor child within one year of the birth or placement of the child in connection with foster care or adoption. (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. (e) An individual shall file a claim for family temporary disability insurance benefits not later than the 41st consecutive day following the first compensable day with respect to which the claim is made for benefits, which time shall be extended by the department upon a showing of good cause. If a first claim is not complete, the claim form shall be returned to the claimant for completion and it shall be completed and returned not later than the 10th consecutive day after the date it was mailed by the department to the claimant, except that such time shall be extended by the department upon a showing of good cause. SEC. 22. Section 3302 of the Unemployment Insurance Code is amended to read: 3302. For purposes of this part: (a) "Care recipient" means the family member who is receiving care for a serious health condition or the new child with whom the care provider is bonding. (b) "Care provider" means the family member who is providing the required care for a serious health condition or the family member who is bonding with the new child. (c) "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 the person to whom the employee stands in loco parentis. (d) "Domestic partner" has the same meaning as defined in Section 297 of the Family Code. (e) "Family care leave" means any of the following: (1) Leave to bond with a minor child within the first year of the child's birth or placement in connection with foster care or adoption. (2) Leave to care for a child, parent, spouse, or domestic partner who has a serious health condition. (f) "Family member" means child, parent, spouse, or domestic partner as defined in this section. (g) "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. (h) "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. (i) "Spouse" means a partner to a lawful marriage. (j) "Valid claim" means any claim for family temporary disability insurance benefits made in accordance with the provisions of this code, and any rules and regulations adopted thereunder, if the individual claiming benefits is unemployed and has been paid the necessary wages in employment for employers to qualify for benefits under Section 2652 and is caring for a seriously ill family member, or bonding with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption. (k) "Twelve-month period," with respect to any individual, means the 365 consecutive days that begin with the first day the individual first establishes a valid claim for family temporary disability benefits. SEC. 23. Section 3302.1 is added to the Unemployment Insurance Code, to read: 3302.1. For purposes of this chapter: (a) "Disability benefit period" with respect to any individual, means the period of unemployment beginning with the first day an individual establishes a valid claim for family temporary disability insurance benefits to care for a seriously ill family member, or to bond with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption. (b) Periods of family care leave for the same care recipient within a 12-month period shall be considered one disability benefit period. (c) Periods of disability for pregnancy, as defined in Section 2608, and periods of family care leave for bonding associated with the birth of that child shall be considered one disability benefit period. SEC. 24. Section 3303 of the Unemployment Insurance Code is amended to read: 3303. An individual shall be deemed eligible for family temporary disability insurance benefits equal to one-seventh of his or her weekly benefit amount on any day in which he or she is unable to perform his or her regular or customary work because he or she is bonding with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption or caring for a seriously ill child, parent, spouse, or domestic partner, only if the director finds all of the following: (a) The individual has made a claim for temporary disability benefits as required by authorized regulations. (b) The individual has been unable to perform his or her regular or customary work for a seven-day waiting period during each disability benefit period, with respect to which waiting period no family temporary disability insurance benefits are payable. (c) The individual has filed a certificate, as required by Sections 2708 and 2709. SEC. 25. Section 3303.1 is added to the Unemployment Insurance Code, to read: 3303.1. (a) An individual is not eligible for family temporary disability insurance benefits with respect to any day that any of the following apply: (1) The individual has received, or is entitled to receive, 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. (2) The individual has received, or is entitled to receive, "other benefits" in the form of cash benefits as defined in Section 2629. (3) The individual has received, or 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. (4) Another family member, as defined in Section 3302, is ready, willing, and able and available for the same period of time in a day that the individual is providing the required care. (b) 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. (c) 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 (b) of Section 3303. 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. SEC. 26. Section 3305 of the Unemployment Insurance Code is amended to read: 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 Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to assessments the provisions of Article 9 (commencing with Section 1176) of Chapter 4 of Part 1, with respect to refunds, and the provisions of Chapter 7 (commencing with Section 1701) of Part 1, 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. 27. Section 3306 is added to the Unemployment Insurance Code, to read: 3306. (a) The director may request additional medical evidence to supplement the first or any continued claim if the additional evidence can be procured without additional cost to the care recipient. The director may require that the additional evidence include any or all of the following information: (1) Identification of diagnoses. (2) Identification of symptoms. (3) A statement setting forth the facts of the care recipient's serious health condition that warrants the participation of the employee. The statement shall be completed by any of the following people: (A) The physician or practitioner treating the care recipient. (B) The registrar, authorized medical officer, or other duly authorized official of the hospital or health facility treating the care recipient. (C) An examining physician or other representative of the department. (b) Except as provided in Section 2709, the director may require the care recipient to submit to reasonable examinations for the purpose of determining all of the following: (1) Whether a serious health condition exists. (2) Whether a care provider's participation is warranted. (3) The period of time that the care provider's participation is warranted. SEC. 28. This act shall become operative on January 1, 2004, except that benefits shall be payable for family temporary disability insurance claims commencing on or after July 1, 2004.