Small Business Grant Money for Paid Family Leave
Beginning in June 2024, California businesses with between 1 and 100 employees may qualify to receive grants of up to $2,000 for each employee who is off work for a reason covered by California’s Paid Family Leave (“PFL”) program. The intent of the PFL Small Business Grant program is to help small businesses offset some of the expenses they incur while complying with their PFL obligations.
What is “Paid Family Leave?”
Paid Family Leave is a component of the State Disability Insurance (SDI) program that provides partial wage replacement benefits to California workers who take time off work to care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner. Benefits also are available to new parents who need time off work to bond with a new child through birth, adoption, or foster care placement.
The California Employment Development Department administers PFL wage replacement through employees’ payroll deductions. However, employers bear the increased costs associated with facilitating employees’ use of PFL, such as training and upskilling existing and temporary staff to cover the duties of employees who are off work.
PFL benefits have gradually expanded in recent years. Initially, only six weeks of PFL benefits were available during a 12-month period. In 2020, the Legislature expanded the maximum benefits to eight weeks. In January 2021, the PFL program expanded through the addition of a new claim called “Military Assist.” Military Assist provides PFL benefits to workers who take time off work to participate in a qualifying event resulting from a spouse, domestic partner, parent, or child’s military deployment to a foreign country. Under the current PFL program, eligible employees receive wage reimbursement payments of up to 70% of their regular compensation, subject to applicable caps.
Paid Family Leave is Not Leave
Unfortunately, the name of the PFL program has created confusion for employers and employees. PFL is not an entitlement to leave. It simply provides wage replacement benefits to employees who otherwise are entitled to take time off for reasons covered under PFL. Of course, employees’ jobs may be protected under various leave laws, such as the federal Family Medical Leave Act and the California Family Rights Act.
The Grant
California’s Employment Training Panel administers the PFL Small Business Grant Program, which provides up to $2,000 for covered employers. The actual amount of each grant depends on the employer’s size. Businesses with between 51 and 100 employees may receive up to $1,000 per employee using PFL wage reimbursement, while employers with between 1 and 50 employees may receive up to $2,000 per employee using PFL wage reimbursement.
To be eligible, a business must be registered to do business in California, be in active status with the California Secretary of State, and have an active California Employer Account Number (CEAN), which lists the employees on payroll. Note, however, that small businesses that use a Professional Employer Organization (PEO) for payroll services are ineligible for the grant program if the business files under the PEO’s CEAN; the employer listed on the CEAN must be the business in order to qualify for the grant.
The grant application is available here. The application requires the following information: employer identity, contact information, industry classification, number of full-time employees, CEAN, the intended use of the funds (hiring a new employee and/or upskilling/cross training an existing employee), and information related to the employee utilizing PFL (name, dates of PFL, gender, and nature of leave). It will take about 15 minutes to complete the application.
Eligible employers should submit their applications as soon as an employee begins receiving PFL benefits after June 1, 2024. Applications will be accepted through May 31, 2026, or until funding is exhausted.
Labor Commissioner Developing Whistleblower Poster
In California, employers are required to meet certain workplace-posting obligations. One of these obligations mandates employers to display a list of employee’s rights and responsibilities under whistleblower laws. A sample notice on whistleblower protections that employers can use is posted on the Division of Labor Standards Enforcement’s (DLSE’s) website. However, this sample notice contains a disclaimer that the DLSE “believes,” but cannot guarantee, that the sample posting complies with existing posting requirements.
With the Governor’s recent signing of AB 2299 on July 15, the Labor Commissioner is now required to develop a whistleblower protection notice that complies with existing posting requirements so that employers who use this notice will be in compliance with the law. Assemblymember Flora, who introduced the legislation, argued that by having the Labor Commissioner develop a posting in compliance with the law, pressure is taken off employers to “constantly [monitor] the state’s complex whistleblower laws to ensure that their posted notice is accurate and up to date.”
The new law also requires that the posting be written in a font larger than 14 point and include the telephone number of the whistleblower hotline. The posting must also be made available on the DLSE’s website for employers to access. Since this law does not go into effect until January 1, 2025, employers should begin monitoring the DLSE’s website at the beginning of the year for the new poster.
