News Law and Policy

California Family Leave Law Has Helped Families, Businesses

Teddy Wilson

“The law has not caused major problems for California employers,” says a U.S. Department of Labor report. “The vast majority (roughly 90 percent) report positive effects or no effects in terms of productivity, profitably, retention, and morale.”

The success of California’s paid family leave law, an issue addressed by candidates during the first Democratic presidential debate, has quickly become an example of how the policy could be implemented nationwide.

In the 11 years since California’s Democratic-led legislature implemented the state’s family leave policy, the program has positively affected children and families and has not caused problems for California employers, according to a 2014 report released by the U.S. Department of Labor.

Workers in California are guaranteed at least six weeks of paid family leave. New mothers and fathers can take up to six weeks of paid leave to spend with their child. Leave can also be used by employees with a sick child, spouse, domestic partner, or parent.

“The law has not caused major problems for California employers,” wrote the report’s authors. “The vast majority (roughly 90 percent) report positive effects or no effects in terms of productivity, profitably, retention, and morale.”

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Those who qualify for family leave benefits receive about 55 percent of lost wages. In order to qualify for benefits, an employee must provide documentation to support their claim for needing leave to bond with a new biological, adopted, or foster child. Claims for family leave must be submitted no earlier than nine days, but no later than 49 days, after the first day their family care leave begins. An employee must complete a seven-day unpaid waiting period before benefits begin.

Since California’s family leave program was implemented, there have been 1.8 million claims made and $4.6 billion in benefits paid, according to the Employee Development Department. The number of claims filed has increased from more than 150,000 in 2004 to more than 215,000 in 2013, a 43.4 percent increase. The percentage of claims made by men has increased dramatically.

California’s economy is thriving. Since the law’s passage the state’s job growth has outpaced the rest of the country, and no state has recovered better from the Great Recession. That trend is expected to continue.

During Sen. Bernie Sanders’ (I-VT) presidential debate defense of democratic socialismhe said it could be a solution to addressing massive income inequality and expanding health-care access, including paid family leave, to every American.

“When you look around the world you see every other major country providing health care to all people as a right—except the United States,” Sanders said. “You see every other major country saying to moms that when you have a baby we’re not going to separate you from your newborn baby because we are going to have medical and family paid leave.”

The United States is the only country in the Organisation for Economic Co-operation and Development (OECD) that does not guarantee paid family leave.

The benefits of paid family leave include higher productivity, stronger workplace morale, and greater employee retention, as well as significant health benefits, according to a study by Oxford Economics conducted for the U.S. Travel Association.

Research conducted by the OECD has shown that paid family leave has significant benefits for fathers who take paternity leave after a child is born, and is one of many policies that could “contribute not only to a more equal share of caring and earning between parents, but also to enhancing child development.”

The public broadly supports paid family leave and other policies that protect workers’ rights. A New York Times and CBS News public opinion poll found that 80 percent of those surveyed favor requiring employers to offer paid leave to parents of new children and employees caring for sick family members.

Former Secretary of State Hillary Clinton voiced her support for paid family leave during the Democratic debate, and criticized Republican presidential candidate Carly Fiorina’s opposition to paid family leave by using her home state of California as an example of where the program has worked.

After a long political battle to pass the measure in the state legislature, the Family Temporary Disability Insurance (FTDI) act was signed into law by Gov. Gray Davis (D) in September 2002. The law took effect in July 2004.

Labor unions and women’s rights organizations were among the key groups that lobbied for the legislation.

Business groups led by the California Chamber of Commerce opposed family leave for working people, and charged that it would negatively affect the state’s economy. Julianne Broyles, a lobbyist for the California Chamber of Commerce, told the Los Angeles Times at the time that it was a “huge disappointment” that Davis signed the bill.

“California businesses will be at a competitive disadvantage because of this, and [Davis] doesn’t seem to care,” Broyles said.

During the political battle over SB 1661, the bill’s sponsor, Sen. Sheila Kuehl (D-Santa Monica) was forced to scale back the scope of the legislation. The original 12 weeks of required paid leave was reduced to six weeks, and the cost of the law was shifted entirely onto workers. The law is paid for through a payroll tax, similar to Social Security.

Those changes did nothing to change the business lobby’s opposition to the law.

Some business owners view the law as helpful for their business.

Adam Rochon, co-owner of Sequoia Employee Benefits and Insurance Solutions in Fresno, told Bloomberg that his company is not large enough to provide the same benefits as larger companies, but the law allows him to provide a benefit he might otherwise not be able to provide.

“A program like this, where it doesn’t actually have an out-of-pocket cost, is great because it allows you to offer benefits you wouldn’t normally be able to,” Rochon said.

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