California Comeback Plan is historic, but families need investment in Paid Family Leave and Disability Insurance
For IMMEDIATE RELEASE
For more information, contact :
Mia Hemstad, Communications Manager, California Work & Family Coalition, mia@workfamilyca.org;
Katherine Wutchiett, Staff Attorney, Legal Aid at Work, kwutchiett@legalaidatwork.org
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The California Work & Family Coalition, an alliance of organizations across the state, including Legal Aid At Work, Business & Professional Women of Nevada County, and Citizens for Choice, commend Governor Gavin Newsom and his administration for the historic investments made in families, workers, and our communities in the California Comeback Plan. In addition, we urge Governor Gavin Newsom and his administration to include greater investment in the Paid Family Leave and State Disability Insurance programs.
While the plan directs funding toward improving the Employment Development Department’s operations, an improved EDD is only helpful if workers can afford to access the State Disability Insurance and Paid Family Leave programs that it administers. Without an investment, millions of workers, and especially low-wage workers, may become even more disadvantaged in regards to family and medical care.
California’s Paid Family Leave and State Disability Insurance programs are worker-funded social supports that provide workers with 60% of their income (70% if very low income) when taking time off work to bond with a new child, care for a seriously ill family member, or care for one’s own illness or short-term disability.
These programs serve as lifelines to working people who need to take time off work for important moments in their lives. But if this administration doesn’t invest in these programs and ensure that AB 908 does not sunset, the wage replacement rate will decrease from 60% (70% if very low income) back down to 55% at the end of this year.
This would mean less money in the pockets of workers who need to use these programs during times when their expenses are going up, not down (i.e. welcoming a new child into the home or dealing with a medical crisis). The current wage replacement rate is already impractically low, barring many people from using the programs they pay into with every paycheck.
“We hear from workers all the time who express that they couldn’t use the Paid Family Leave benefits they pay for to care for their families because they can’t pay their bills without their full paycheck,” says Katie Wutchiett, staff attorney in the Work and Family Program at Legal Aid at Work. “In a high-cost state like California, living paycheck to paycheck is a stressful but normal part of many peoples’ lives.”
Jerry Sandoval, a father and member of Parent Voices San Diego shared, “I had been paying into the Paid Family Leave fund for over 10 years, but when the time came for me to use it when my baby girl was born, I had to rush back to work after just 2 weeks because I couldn’t pay my bills with only part of my paycheck coming in. I wanted to be there with my child and help take care of my partner.”
Another parent, Miranda G. from Merced shared, "When our first son was born, my fiancé was not able to take any time off because we weren't able to plan or save anything in advance on the wages we were earning at the time.”
To address this financial barrier, the Coalition and 46 diverse organizations sent a letter in April 2021 to Governor Newsom, relevant Budget Committee leaders, and Senate and House leadership asking for the Administration and Legislature to ensure that low-wage Californians are paid 90% of their regular weekly wages when they qualify for Paid Family Leave or State Disability Insurance and to maintain the current 60% rate for all other workers.
Currently, a full-time worker earning minimum wage will only receive 60% of their income from SDI or PFL. California must recognize the circumstances in which its residents live and ensure that the higher wage replacement rate is available to all those earning less than 70% of the state average weekly wage, or about $50,000 annually.
In order for the Governor and this administration to improve access to Paid Family Leave — one of the promises of the Master Plan for Early Learning and Care — we respectfully request that AB 908 be extended and that this threshold be corrected. Workers need a higher wage replacement rate and a higher investment in our Paid Family Leave and Disability Insurance programs to bring the wage replacement rate up to 90% for low-wage workers.
“This $76 billion budget surplus is an opportunity to strengthen Paid Family Leave and Disability Insurance and improve access to these programs for millions of workers,” says Jenya Cassidy, Director of the California Work & Family Coalition. “These programs support the health and financial stability of our working class. They should be a priority.”
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