That Newsom Proposal For Six-Month Paid Family Leave? It’s Bold—But Less So Than It Seems

By Laurel Rosenhall, CALmatters

Californians who like the idea of getting more paid time off work to care for a new baby may find good news and bad news in the details of Gov. Gavin Newsom’s proposed budget.

The bad news: The proposal is not quite as generous as it initially seemed. It doesn’t call for each worker to get six months of paid leave, as early news coverage implied. Instead, it calls for each baby to get up to six months of care from a family member, dividing the time between two adults each taking a paid leave of two to four months.

The good news: That’s still more than the six weeks of partially-paid family leave most workers get under current state law. And as a more modest increase, the plan may be more likely to win approval.

Not that it will be easy. The proposal foreshadows a pitched battle between labor unions and business interests, both powerful forces in the state Capitol. It’s an expensive proposition—Newsom hasn’t even released an estimate yet—and the plan to pay for it is still in formation. One option is an increased payroll tax, which would mean taking more deductions from most workers’ paychecks. Even though Democrats hold more than a supermajority in the state Legislature, support for a new tax is not certain.

But if successful, a law giving all families six months to bond with a new baby would reinstate California as the nation’s vanguard of progressive family policy, a position that has slipped in recent years.

California was the first state in the country to embrace paid family leave when, in 2002, then-Gov. Gray Davis signed the law giving most workers six weeks of partial pay to care for a new baby or sick family member. It now provides low-income workers 70 percent of their wages while on family leave and other workers 60 percent of their pay—funded by a 0.9 percent tax taken out of most paychecks. In addition, women who give birth get an additional six weeks of disability pay.

But in the last few years, a handful of blue states have gone further. New York now gives 10 weeks of paid family leave, and is supposed to increase it to 12 weeks in two years. Massachusetts and Washington passed laws giving 12 weeks of paid family leave, set to go into effect in 2020 and 2021, respectively.

Newsom’s proposal would boost the amount of time California workers can take, though by exactly how much has not been decided. Families would likely split the time between two parents, or a single parent and another family member. That could mean each adult taking three months, or one taking two and another taking four, said Ann O’Leary, Newsom’s chief of staff and a leading force behind the proposal.

“I don’t think we would do all six months to one person,” O’Leary said, because it would be too onerous on employers.

By prioritizing a six-month period during which babies would get family care—as opposed to a precise amount of leave for a worker—Newsom is reframing paid leave as a health-and-economic benefit for children and families.

“I am committed to this,” he said this month in announcing the leave proposal.

“Why? For no other reason: It’s a developmental necessity… Do you want a parent spending time helping build the architecture of a young child’s brain? Or do you want government to do it for you?”

Infant care costs a lot—on average, more than $13,000 per year in California—so the proposal could save some families money.

How much it would cost workers—or their bosses—remains to be seen, and is certain to be the most controversial aspect of the proposal.

“The devil is the details. How do you fund it? Is there going to be an increase in the payroll tax? That would be a big concern for our members,” said Shawn Lewis, spokesman for the National Federation of Independent Businesses, a lobbying group that represents small companies.

The current family leave plan is paid for entirely by workers, through the payroll tax. Labor unions want to see employers pay into the plan as well, said Steve Smith, spokesman for the California Labor Federation. They also want to increase the amount workers receive during leave, arguing that the partial pay under current law forces many low-wage workers to forgo the leave—even though their taxes pay into the fund.

“If you are a low-wage worker working two jobs to get by, having your paycheck reduced significantly so you can stay home with your baby just doesn’t work for you,” Smith said. “So those who take advantage of it are on the upper end of the scale.”

Democrats in the Legislature have begun introducing bills to give workers full pay during family leave and expand the amount of time off, though the legislation doesn’t yet carry many specifics. Newsom is forming a task force that will examine ways to structure and pay for the expanded leave. One idea: reducing the amount of money held in reserves in the fund that pays for family leave. 

“There are a lot of smart people talking about this and figuring out the best way to do it,” said Sen. Connie Leyva, a Chino Democrat who chairs the women’s caucus. “I absolutely think it can get done.”

Assembly Republican leader Marie Waldron said Republicans like the idea of giving children more time with their parents, but are concerned about the costs. She called a larger payroll tax “a direct hit to the already strained middle class.”

Newsom has expressed interest in a larger overhaul of California’s tax system, including potential changes to property taxes and sales taxes. He said a plan to pay for family leave may become part of a broader tax reform proposal.

The new governor’s staffing choices so far indicate that he’s serious about family leave. O’Leary has been studying paid leave systems for many years as a lawyer, an academic and a policy advisor to Hillary Clinton’s presidential campaign. And Angie Wei, the cabinet aide Newsom appointed to lead policy development, is a former labor union leader who was a key architect of California’s 2002 paid family leave law.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.