California Unemployment Insurance Code

Bill Number: SB 1661

Chaptered Sept. 26, 2002

Section 1. Section 984 of the Unemployment Insurance Code is

amended to read:

984. (a) (1) Each worker shall pay worker contributions at the

rate determined by the director pursuant to this Section with respect

to wages, as defined by Sections 926, 927, and 985. On or before

October 31 of each calendar year, the director shall prepare a

statement, which shall be a public record, declaring the rate of

worker contributions for the calendar year and shall notify promptly

all employers of employees covered for disability insurance of the

rate.

(2) (A) Except as provided in paragraph (3), the rate of worker

contributions for calendar year 1987 and for each subsequent calendar

year shall be 1.45 times the amount disbursed from the Disability

Fund during the 12-month period ending September 30 and immediately

preceding the calendar year for which the rate is to be effective,

less the amount in the Disability Fund on that September 30, with the

resulting figure divided by total wages paid pursuant to Sections

926, 927, and 985 during the same 12-month period, and then rounded

to the nearest one-tenth of 1 percent.

(B) The director shall increase the rate of worker contributions

by .08 percent for the 2004 and 2005 calendar years to cover the

initial cost of family temporary disability insurance benefits

provided in Chapter 7 (commencing with Section 3300) of Part 2.

(3) The rate of worker contributions shall not exceed 1.5 percent

or be less than 0.1 percent. The rate of worker contributions shall

not decrease from the rate in the previous year by more than

two-tenths of 1 percent.

(b) Worker contributions required under Sections 708 and 708.5

shall be at a rate determined by the director to reimburse the

Disability Fund for unemployment compensation disability benefits

paid and estimated to be paid to all employers and self-employed

individuals covered by those Sections. On or before November 30th of

each calendar year, the director shall prepare a statement, which

shall be a public record, declaring the rate of contributions for the

succeeding calendar year for all employers and self-employed

individuals covered under Sections 708 and 708.5 and shall notify

promptly the employers and self-employed individuals of the rate.

The rate shall be determined by dividing the estimated benefits and

administrative costs paid in the prior year by the product of the

annual remuneration deemed to have been received under Sections 708

and 708.5 and the estimated number of persons who were covered at any

time in the prior year. The resulting rate shall be rounded to the

next higher one-hundredth percentage point. The rate may also be

reduced or increased by a factor estimated to maintain as nearly as

practicable a cumulative zero balance in the funds contributed

pursuant to Sections 708 and 708.5. Estimates made pursuant to this

subdivision may be made on the basis of statistical sampling, or

another method determined by the director.

shall not constitute an authorized regulation.

(d) Notwithstanding subdivision (a), the director may, at his or

her discretion, increase or decrease, by not to exceed 0.1 percent,

the rate of worker contributions determined pursuant to subdivision

(a), up to a maximum worker contribution rate of 1.5 percent, if he

or she determines the adjustment is necessary to reimburse the

Disability Fund for disability benefits paid or estimated to be paid

to individuals covered by this Section or to prevent the accumulation

of funds in excess of those needed to maintain an adequate fund

balance.

Sec. 1.5. Section 2116 of the Unemployment Insurance Code is

amended to read:

2116. It is unlawful to do any of the following:

(a) Falsely certify the medical condition of any person in order

to obtain disability insurance benefits, including family temporary

disability insurance benefits, whether for the maker or for any other

person.

(b) Knowingly present or cause to be presented any false or

fraudulent written or oral material statement in support of any claim

for disability insurance including family temporary disability

insurance benefits.

refund, commission, preference, patronage, dividend, discount, or

other consideration, whether in the form of money or otherwise, as

compensation or inducement for soliciting a claimant to apply for

disability insurance including family temporary disability insurance

benefits unless the payment is lawful pursuant to Section 650 of the

Business and Professions Code.

(d) Knowingly assist, abet, solicit, or conspire with any person

who engages in an unlawful act under this Section.

Sec. 2. Section 2601 of the Unemployment Insurance Code is amended

to read:

2601. The purpose of this part is to compensate in part for the

wage loss sustained by any individual who is unable to work due to

the employee's own sickness or injury, the sickness or injury of a

family member, or the birth, adoption, or foster care placement of a

new child, and to reduce to a minimum the suffering caused by

unemployment resulting therefrom. This part shall be construed

liberally in aid of its declared purpose to mitigate the evils and

burdens which fall on the unemployed and disabled worker and his or

her family.

Sec. 3. Section 2613 of the Unemployment Insurance Code is amended

to read:

2613. (a) The Director of Employment Development shall develop

and maintain a program of education concerning disability insurance

rights and benefits.

(b) The director shall provide to each employer of employees

subject to this part a notice informing workers of their disability

insurance rights and benefits due to sickness, injury, or pregnancy.

The notice shall be given by every employer to each new employee

hired on or after June 1, 1988, and to each employee leaving work due

to pregnancy or nonoccupational sickness or injury on or after July

1, 1989.

employer of employees subject to this part a notice informing

workers of their disability insurance rights and benefits due to the

employee's own sickness, injury, or pregnancy, or the employee's need

to provide care for any sick or injured family member or new child

who is unable to care for himself or herself. The notice shall be

given by every employer to each new employee hired on or after

January 1, 2004, and to each employee leaving work on or after July

1, 2004, due to pregnancy, nonoccupational sickness or injury, or the

need to provide care for any sick or injured family member or new

child who is unable to care for himself or herself.

Sec. 4. Section 2708 of the Unemployment Insurance Code is amended

to read:

2708. (a) In accordance with the director's authorized

regulations, and except as provided in subdivision (c) and Sections

2708.1 and 2709, a claimant shall establish medical eligibility for

each uninterrupted period of disability by filing a first claim for

disability benefits supported by the certificate of a treating

physician or practitioner that establishes the sickness, injury, or

pregnancy of the employee, or the condition of the family member that

warrants the care of the employee. For subsequent periods of

uninterrupted disability after the period covered by the initial

certificate or any preceding continued claim, a claimant shall file a

continued claim for those benefits supported by the certificate of a

treating physician or practitioner. A certificate filed to

establish medical eligibility for the employee's own sickness,

injury, or pregnancy shall contain a diagnosis and diagnostic code

prescribed in the International Classification of Diseases, or, where

no diagnosis has yet been obtained, a detailed statement of

symptoms.

A certificate filed to establish medical eligibility of the

employee's own sickness, injury, or pregnancy shall also contain a

statement of medical facts including secondary diagnoses when

applicable, within the physician's or practitioner's knowledge, based

on a physical examination and a documented medical history of the

claimant by the physician or practitioner, indicating his or her

conclusion as to the claimant's disability, and a statement of his or

her opinion as to the expected duration of the disability.

(b) A certificate filed to establish medical eligibility of the

serious health condition of the family member that warrants the care

of the employee shall contain:

(1) A diagnosis and diagnostic code prescribed in the

International Classification of Diseases, or, where no diagnosis has

yet been obtained, a detailed statement of symptoms.

(2) The date, if known, on which the condition commenced.

(3) The probable duration of the condition.

(4) An estimate of the amount of time that the physician or

practitioner believes the employee is needed to care for the child,

parent, spouse, or domestic partner.

(5) A statement that the serious health condition warrants the

participation of the employee to provide care for his or her child,

parent, spouse, or domestic partner.

"Warrants the participation of the employee" includes, but is not

limited to, providing psychological comfort, and arranging "third

party" care for the child, parent, spouse, or domestic partner, as

well as directly providing, or participating in, the medical care.

employee taking leave for reason of the birth of a child of the

employee or the employee's domestic partner, or the placement of a

child who is unable to care for himself or herself with the employee

in connection with the adoption or foster care of the child by the

employee or domestic partner.

(d) The first and any continuing claim of an individual who

obtains care and treatment outside this state, shall be supported by

a certificate of a treating physician or practitioner duly licensed

or certified by the state or foreign country in which the claimant is

receiving the care and treatment. If a physician or practitioner

licensed by and practicing in a foreign country is under

investigation by the department for filing false claims and the

department does not have legal remedies to conduct a criminal

investigation or prosecution in that country, the department may

suspend the processing of all further certifications until the

physician or practitioner fully cooperates, and continues to

cooperate with the investigation. A physician or practitioner

licensed by and practicing in a foreign country who has been

convicted of filing false claims with the department may not file a

certificate in support of a claim for disability benefits for a

period of five years.

(e) For purposes of this part, the term "physician" has the same

meaning as it does in Section 3209.3 of the Labor Code. For purposes

of this part, "practitioner" means a person duly licensed or

certified in California acting within the scope of his or her license

or certification who is a dentist, podiatrist, or as to normal

pregnancy or childbirth, a midwife, nurse midwife, or nurse

practitioner.

(f) For a claimant who is hospitalized in or under the authority

of a county hospital in this state, a certificate of initial and

continuing medical disability, if any, shall satisfy the requirements

of this Section if the disability is shown by the claimant's

hospital chart, and the certificate is signed by the hospital's

registrar. For a claimant hospitalized in or under the care of a

medical facility of the United States government, a certificate of

initial and continuing medical disability, if any, shall satisfy the

requirements of this Section if the disability is shown by the

claimant's hospital chart, and the certificate is signed by a medical

officer of the facility duly authorized to do so.

(g) Nothing in this Section shall be construed to preclude the

department from requesting additional medical evidence to supplement

the first or any continued claim if the additional evidence can be

procured without additional cost to the claimant. The department may

require that the additional evidence include identification of

diagnoses, symptoms, or a statement as to the facts of the claimant's

disability by the physician or practitioner treating the claimant,

by the registrar, authorized medical officer, or other duly

authorized official of the hospital or health facility treating the

claimant, or by an examining physician or other representative of the

department.

Sec. 5. Section 3254 of the Unemployment Insurance Code is amended

to read:

3254. The Director of Employment Development shall approve any

voluntary plan, except one filed pursuant to Section 3255, as to

which he or she finds that there is at least one employee in

employment and all of the following exist:

(a) The rights afforded to the covered employees are greater than

those provided for in Chapter 2 (commencing with Section 2625) and

those provided for in Chapter 7 (commencing with Section 3300).

(b) The plan has been made available to all of the employees of

the employer employed in this state or to all employees at any one

distinct, separate establishment maintained by the employer in this

state. "Employees" as used in this subdivision includes those

individuals in partial or other forms of short-time employment and

employees not in employment as the Director of Employment Development

shall prescribe by authorized regulations.

state or a majority of the employees employed at any one distinct,

separate establishment maintained by the employer in this state have

consented to the plan.

(d) If the plan provides for insurance the form of the insurance

policies to be issued have been approved by the Insurance

Commissioner and are to be issued by an admitted disability insurer.

(e) The employer has consented to the plan and has agreed to make

the payroll deductions required, if any, and transmit the proceeds to

the plan insurer, if any.

(f) The plan provides for the inclusion of future employees.

(g) The plan will be in effect for a period of not less than one

year and, thereafter, continuously unless the Director of Employment

Development finds that the employer or a majority of its employees

employed in this state covered by the plan have given notice of the

termination of the plan. The notice shall be filed in writing with

the Director of Employment Development and shall be effective only on

the anniversary of the effective date of the plan next following the

filing of the notice, but in any event not less than 30 days from

the time of the filing of the notice; except that the plan may be

terminated on the operative date of any law increasing the benefit

amounts provided by Sections 2653 and 2655 or the operative date of

any change in the rate of worker contributions as determined by

Section 984, if notice of the termination of the plan is transmitted

to the Director of Employment Development not less than 30 days prior

to the operative date of that law or change. If the plan is not

terminated on the 30 days' notice because of the enactment of a law

increasing benefits or because of a change in the rate of worker

contributions as determined by Section 984, the plan shall be amended

to conform to that increase or change on the operative date of the

increase or change.

(h) The amount of deductions from the wages of an employee in

effect for any plan shall not be increased on other than an

anniversary of the effective date of the plan except to the extent

that any increase in the deductions from the wages of an employee

allowed by Section 3260 permits that amount to exceed the amount of

deductions in effect.

(i) The approval of the plan or plans will not result in a

substantial selection of risks adverse to the Disability Fund.

Sec. 6. Chapter 7 (commencing with Section 3300) is added to Part

2 of Division 1 of the Unemployment Insurance Code, to read:

CHAPTER 7. PAID FAMILY CARE LEAVE

3300. The Legislature finds and declares all of the following:

(a) It is in the public benefit to provide family temporary

disability insurance benefits to workers to care for their family

members. The need for family temporary disability insurance benefits

has intensified as both parent's participation in the workforce has

increased, and the number of single parents in the workforce has

grown. The need for partial wage replacement for workers taking

family care leave will be exacerbated as the population of those

needing care, both children and parents of workers, increases in

relation to the number of working age adults.

(b) Developing systems that help families adapt to the competing

interests of work and home not only benefits workers, but also

benefits employers by increasing worker productivity and reducing

employee turnover.

s Family Rights Act (CFRA) entitle eligible employees working for

covered employers to take unpaid, job-protected leave for up to 12

workweeks in a 12-month period. Under the FMLA and the CFRA, unpaid

leave may be taken for the birth, adoption, or foster placement of a

new child; to care for a seriously ill child, parent, or spouse; or

for the employee's own serious health condition.

(d) State disability insurance benefits currently provide wage

replacement for workers who need time off due to their own

non-work-related injuries, illnesses, or conditions, including

pregnancy, that prevent them from working, but do not cover leave to

care for a sick or injured child, spouse, parent, domestic partner,

or leave to bond with a new child.

(e) The majority of workers in this state are unable to take

family care leave because they are unable to afford leave without

pay. When workers do not receive some form of wage replacement

during family care leave, families suffer from the worker's loss of

income, increasing the demand on the state unemployment insurance

system and dependence on the state's welfare system.

(f) It is the intent of the Legislature to create a family

temporary disability insurance program to help reconcile the demands

of work and family. The family temporary disability insurance

program shall be a component of the state's unemployment compensation

disability insurance program, shall be funded through employee

contributions, and shall be administered in accordance with the

policies of the state disability insurance program created pursuant

to this part. Initial and ongoing administrative costs associated

with the family temporary disability insurance program shall be

payable from the Disability Fund.

3301. (a) The purpose of this chapter is to establish, within the

state disability insurance program, a family temporary disability

insurance program to provide up to six weeks of wage replacement

benefits to workers who take time off work to care for a seriously

ill child, spouse, parent, domestic partner, or to bond with a new

child.

Nothing in this chapter shall be construed to abridge the rights

and responsibilities conveyed under the CFRA or pregnancy disability

leave.

(b) An individual's "weekly benefit amount" shall be the amount

provided in Section 2655.

disability benefit period for family temporary disability insurance

shall be six times his or her "weekly benefit amount," but in no case

shall the total amount of benefits payable be more than the total

wages paid to the individual during his or her disability base

period. If the benefit is not a multiple of one dollar ($1), it

shall be computed to the next higher multiple of one dollar ($1).

(d) No more than six weeks of family temporary disability

insurance benefits shall be paid within any 12-month period.

3302. For purposes of this part:

(a) "Child" means a biological, adopted, or foster son or

daughter, a stepson or stepdaughter, a legal ward, a son or daughter

of a domestic partner, or a son or daughter of an employee who stands

in loco parentis to that child.

(b) "Family care leave" means any of the following:

(1) Leave for reason of the birth of a child of the employee or

the employee's domestic partner, the placement of a child with an

employee in connection with the adoption or foster care of the child

by the employee or domestic partner, or the serious health condition

of a child of the employee, spouse or domestic partner.

(2) Leave to care for a parent, spouse, or domestic partner who

has a serious health condition.

stepparent, a legal guardian, or other person who stood in loco

parentis to the employee when the employee was a child.

(d) "Domestic partner" has the same meaning as defined in Section

297 of the Family Code.

(e) "Family member" means child, parent, spouse, or domestic

partner as defined in this Section.

(f) "Serious health condition" means an illness, injury,

impairment, or physical or mental condition that involves inpatient

care in a hospital, hospice, or residential health care facility, or

continuing treatment or continuing supervision by a health care

provider, as defined in Section 12945.2 of the Government Code.

3303. (a) An individual shall be deemed eligible for family

temporary disability insurance benefits on any day in which he or she

is unable to perform his or her regular or customary work because he

or she is caring for a new child during the first year after the

birth or placement of the child or a seriously ill child, parent,

spouse, or domestic partner, subject to a waiting period of seven

consecutive days during each family temporary disability benefit

period where no benefits are payable within that period.

(b) An individual is not eligible for family temporary disability

insurance benefits with respect to any day that he or she has

received unemployment compensation benefits under Part 1 (commencing

with Section 100) or under an unemployment compensation act of any

other state or of the federal government.

insurance benefits with respect to any day of unemployment and

disability for which he or she has received, or is entitled to

receive, "other benefits" in the form of cash benefits as defined in

subdivision (b) of Section 2629.

(d) An individual is not eligible for family temporary disability

insurance benefits with respect to any day that he or she is entitled

to receive state disability insurance benefits under Part 2

(commencing with Section 2601) or under a disability insurance act of

any other state.

(e) An individual is not eligible for family temporary disability

insurance benefits with respect to any day that another family member

is able and available for the same period of time that the

individual is providing the required care.

(f) An individual who is entitled to leave under the FMLA and the

CFRA must take Family Temporary Disability Insurance (FTDI) leave

concurrent with leave taken under the FMLA and the CFRA.

(g) As a condition of an employee's initial receipt of family

temporary disability insurance benefits during any 12-month period in

which an employee is eligible for these benefits, an employer may

require an employee to take up to two weeks of earned but unused

vacation leave prior to the employee's initial receipt of these

benefits. If an employer so requires an employee to take vacation

leave, that portion of the vacation leave that does not exceed one

week shall be applied to the waiting period required under

subdivision (a). This subdivision may not be construed in a manner

that relieves an employer of any duty of collective bargaining the

employer may have with respect to the subject matter of this

subdivision.

3304. Eligible workers shall receive benefits in accordance with

provisions established under this division.

3305. If the director finds that any individual falsely certifies

the medical condition of any person in order to obtain family

temporary disability insurance benefits, with the intent to defraud,

whether for the maker or for any other person, the director shall

assess a penalty against the individual in the amount of 25 percent

of the benefits paid as a result of the false certification. The

provisions of this article, the provisions of Article 9 (commencing

with Section 1176) with respect to refunds, and the provisions of

Chapter 7 (commencing with Section 1701) with respect to collections

shall apply to the assessments provided by this Section. Penalties

collected under this Section shall be deposited in the contingent

fund.

Sec. 7. This act shall become operative on January 1, 2004, except

that benefits shall be payable for periods of family temporary

disability leave commencing on or after July 1, 2004.

Sec. 8. No reimbursement is required by this act pursuant to

Section 6 of Article XIII B of the California Constitution because

the only costs that may be incurred by a local agency or school

district will be incurred because this act creates a new crime or

infraction, eliminates a crime or infraction, or changes the penalty

for a crime or infraction, within the meaning of Section 17556 of the

Government Code, or changes the definition of a crime within the

meaning of Section 6 of Article XIII B of the California

Constitution.

History: Chapter 901

Filed with Secretary of State September 26, 2002

Approved by Governor September 25, 2002

Passed the Senate August 30, 2002

Passed the Assembly August 27, 2002

Amended in Assembly August 23, 2002

Amended in Assembly August 8, 2002

Amended in Assembly August 7, 2002

Amended in Assembly June 24, 2002

Amended in Senate May 22, 2002

Amended in Senate May 6, 2002

Amended in Senate April 29, 2002

Introduced by Senator Sheila J. Kuehl February 21, 2002