California’s State Disability and Paid Family Leave Program with a Review of Other State Actions

Abstract

Effective 2004, California implemented the nation’s first Paid Family Leave (PFL) program. It is funded entirely by employee contributions and provides income replacement benefits for various family- and health-related reasons, including bonding with a new child. The program complements and interacts with various other preexisting benefit arrangements. California, four other states and Puerto Rico have long-existing temporary disability insurance (TDI) programs that provide income replacement for off-the-job injury and illness. In California, it is called State Disability Insurance (SDI). PFL was grafted onto the SDI program and, for most purposes, is an integral part of it. We now have 5 years of experience with PFL and a meaningful appraisal can now be made. By almost all measures, PFL has been a major success. There is a great deal of interest among other states in establishing a similar program and New Jersey (a TDI state) has already done so. Others may follow; however, it will be more difficult for the 45 states that do not already have a TDI program.