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California Employers Lose Option to Require Vacation Leave Before PFL

Posted by California Employers Association on November 25, 2024

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Effective January 1, 2025, California employers will no longer be allowed to require their employees to take two weeks of accrued vacation leave before taking paid family leave under the State’s family temporary disability insurance program. The change was brought about by Assembly Bill (AB) 2123, enacted Sept. 29, 2024.

Paid Family Leave

California’s paid family leave program provides up to eight weeks of partial pay within a 12-month period. Benefits are 60 to 70 percent (depending on income) of the employee’s highest quarterly earnings, 5 to 18 months before the claim begins. Paid family leave may be used for:

  • Bonding with a new child (either by birth, adoption or foster care placement);
  • Caring for a seriously ill family member (child, parent, parent-in-law, grandparent, grandchild, sibling, spouse or registered domestic partner); and
  • A qualifying exigency related to the covered active duty (or call to covered active duty) of the employee’s spouse, domestic partner, child or parent in the U.S. Armed Forces.

The program is funded entirely by employees through paycheck withholding. Currently, the law authorizes employers to require employees to take up to two weeks of earned vacation leave prior to the employee’s initial receipt of family leave benefits during any 12-month period.

Paid family leave does not create a right to a leave of absence; however, many employees take advantage of paid family leave during protected leaves, such as leave under the California Family Rights Act and/or Family and Medical Leave Act.

Employers can learn more about the program here.

Amendments in AB 2123

AB 2123 amended the law addressing the paid family leave program by striking the employer option to require employees to take vacation leave before receiving paid family leave. The change takes effect Jan. 1, 2025.

Implications for Employers

The change allows the possibility of longer employee absences overall, as employees will be able to take their full amount of paid family leave without first using any accrued vacation time. At a later date, employees may then choose to use their full vacation leave.