BILL ANALYSIS Ó SB 770 Page 1 Date of Hearing: August 7, 2013 ASSEMBLY COMMITTEE ON INSURANCE Henry T. Perea, Chair SB 770 (Jackson and DeSaulnier) - As Amended: August 5, 2013 SENATE VOTE : 29-10 SUBJECT : Paid Family Leave SUMMARY : Extends eligibility for the paid family leave program (PFL) to employees who need to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. Specifically, this bill : 1)Extends eligibility for the PFL program to employees who take time off from work to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. 2)Defines "grandchild" as the child of the employee's child. 3)Defines "grandparent" as a parent of the employee's parent. 4)Defines "parent-in-law" as the parent of a spouse or a domestic partner. 5)Defines "sibling" as person related to another person by blood, adoption, or affinity through a common legal or biological parent. 6)Defers implementation until July 1, 2014. EXISTING LAW : 1)Establishes the PFL program that provides 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 birth or placement of the child in connection with foster care or adoption. 2)Establishes the State Disability Insurance (SDI) Program for individuals who are unable to work due to sickness or injury, the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child. SB 770 Page 2 3)Requires a claimant for SDI or PFL benefits to establish his or her medical eligibility for each period of disability by obtaining a certificate from 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. As part of the certificate of eligibility to care for a family member, the physician or practitioner must provide an estimate of the time needed by the employee to care for the child, parent, spouse, or domestic partner. 4)Requires each employee to contribute to the Disability Fund to pay the costs of DI benefits. The rate of these employee contributions ranges from 0.1% to 1.5% of wages, and are calculated and announced annually by the Director of the EDD based on the financial condition of the disability fund. FISCAL EFFECT : According to the Senate Appropriations Committee, EDD estimates that the additional benefit costs would be $34 to $36 million annually. This estimate assumes a 50 percent increase in payable PFL care claims and is the estimated maximum potential liability to the Fund. COMMENTS : 1)Purpose . According to the author, the definition of family within the Paid Family Leave insurance program is overly narrow and does not reflect many Californians' caregiving responsibilities. Workers are unable to use the program while providing care to seriously ill siblings, grandparents, grandchildren and parents-in-law. The author cites the following in support of the need for broadening eligibility for paid family leave: A 2007 Senate Office of Research Report, Balancing Work and Family, found the Employment Development Department rejected about 10 percent of PFL claims because the employee sought leave to care for an excluded family member. Most of these denied claims were filed for siblings (35 percent), followed by grandparents (19 percent) and mothers- and fathers-in-law (10 percent). California has the second highest percentage of multi-generational households in the country. Nearly half of Californians are single and their SB 770 Page 3 closest relative may be a sibling. A recent study of caregivers of Alzheimer's patients showed that nearly 40 percent of caregivers were not covered by the definition of family in California's PFL law. A study found that nearly 20 percent of primary caregivers for chronically disabled individuals are neither the spouse nor the child of the person receiving care. 1)Paid Family Leave Program . PFL was enacted in 2002 to extend disability compensation to individuals who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new minor child. California was the first state in the nation to implement a paid family leave benefit with benefit payments beginning on July 1, 2004. The PFL program provides weekly benefits ranging from $50 - $1011 for a maximum of six weeks within a 12 month period. In calendar year 2011, 205,833 PFL claims were filed, and 89 percent of them were filed to take time off to bond with a new child. The average duration of PFL claims has consistently hovered around five weeks (out of a total possible six week benefit period) and the average weekly benefit is $504. 2)Previous Legislation . a. SB 1661 (Kuehl, Chapter 901 , Statutes of 2002) created the PFL program which began on January 1, 2004. b. SB 727 (Kuehl, Chapter 797, Statutes of 2003) made changes that clarified the role of EDD in maintaining the program as well as ensuring the accumulation of enough funds to pay for the benefits. c. SB 727 (Kuehl) of 2007, which proposed to extend the PFL Program to caring for grandparents, grandchildren, siblings, and parents-in-law, was vetoed by the Governor. d. AB 804 (Yamada) of 2011, which proposed to extend the PFL program Program to caring for grandparents, grandchildren, siblings, and parents-in-law and was held in the Assembly Appropriations Committee. REGISTERED SUPPORT / OPPOSITION : Support SB 770 Page 4 9 to 5 A Better Balance AARP Asian Law Caucus Association of California Caregiver Resource Centers Association of Regional Center Agencies BreastfeedLA California Alliance for Retired Americans California Employment Lawyers Association California Labor Federation California Senior Legislature California State Pipe Trades Council California Teachers Association California Women's Law Center Cancer Legal Resource Center Center for WorkLife Law Childcare Resource and Referral Network Childcare Resource and Referral Network Communications Workers of America Disability Rights Advocates Disability Rights Education and Defense Fund Equal Rights Advocates Excelligence Learning Corporation Family Caregiver Alliance Glendale City Employees Association Legal Aid Society- Employment Law Center (sponsor) Legal Aid Society San Mateo County Los Angeles Alliance for a Better Economy Mujeres Unidas y Activas National Association of Social Workers National Center for Youth Law Organization of SMUD Employees Parent Voices San Bernardino Public Employees San Luis Obispo County Employees Association Santa Rosa City Employees Association SEIU California UAW Local 2865 US Women's Chamber of Commerce USC Davis School of Gerontology, Family Caregiver Support Program Women's Employment Rights Clinic of Golden Gate University School of Law Zazie Restaurant SB 770 Page 5 Opposition None received Analysis Prepared by : Paul Riches / INS. / (916) 319-2086