Employees who are eligible for Emergency Paid Sick Leave (“EPSL”) under the Families First Coronavirus Response Act (“FFCRA”) may also file a claim for Paid Family Leave (“PFL”), a benefit established under California law. PFL provides 60-70% wage replacement benefits for up to 6 weeks (8 weeks effective July 1, 2020) in a 12-month period for eligible employees who need to take time off work to care for a seriously ill family member or bond with a new child. (Unempl. Ins. Code, § 3303(a).) Given the similarities between EPSL and PFL, we have received numerous questions regarding how one may affect the other. This bulletin serves to provide practical guidance on how employers should handle those situations where an employee seeks benefits under both laws.
PFL is a benefit provided by the State Disability Insurance (“SDI”) program and administered by the Employment Development Department (“EDD”). (Overview of California’s Paid Family Leave Program at pp. 5-6.) It is only available to those employees whose employers participate in SDI or have adopted a Voluntary Plan. (EDD “FAQs – Paid Family Leave Eligibility”; EDD “FAQs – Voluntary Plan”.) Thus, employers do not determine an employee’s eligibility for PFL or the amount of PFL benefits. Further, EDD now pays PFL benefits to employees directly by issuing a debit card, eliminating the need for employers to advance PFL benefits. Once an employee has filed a claim for PFL with EDD, employers will receive a Notice of Paid Family Leave Claim Filed (form DE 2503F). Employers must complete and return the form within two business days. (EDD “Employer Requirements”.)
Employers are likely to have processed an employee’s leave as EPSL before receiving notice that an employee has also filed a claim for PFL. Employees are required to file a claim within 41 days of first taking leave, and it takes about 14 days for EDD to determine eligibility after receiving a claim. (Unempl. Ins. Code, § 3301(e); Overview of California’s Paid Family Leave Program at pp. 11, 18.) When responding to a Notice of Paid Family Leave Claim Filed for an employee who is on EPSL, employers should report EPSL payments as wages on question 6 of form DE 2503F. (Overview of California’s Paid Family Leave Program at p. 13; Sample DE Form 2503F Question 6.) Employees should also report EPSL pay as wages when they file a claim. (EDD “Reporting Your Wages”; Form DE 2501F Instructions at p. 3.)
Employees who continue to receive wages while on PFL will have their PFL benefit amount reduced so that that the total does not exceed their regular wages (not including overtime). (Unempl. Ins. Code, § 2656(a).) Courts have held, and EDD forms reflect, that paid sick time constitutes “wages.” (Cooper v. Unemployment Ins. Appeals Bd. (1981) 118 Cal.App.3d 166 [sick time benefits provide under collective bargaining agreement constitutes wages]; Barret v. Unemployment Ins. Appeals Bd. (1961) 190 Cal.App.2d 854; DE 2530 at p. 13; e.g., Overview of California’s Paid Family Leave Program at p. 13; Sample DE Form 2503F Question 6.) In addition, PFL benefits will be reduced by the amount of “’other benefits’ in the form of cash payments” an employee receives while on leave. (Unempl. Ins. Code, § 2629.) The statute defines “other benefits” as:
(1) Temporary disability indemnity under a workers’ compensation law of this state or of any other state or of the federal government.
(2) Temporary disability benefits under any employer’s liability law of this state or of any other state or of the federal government.
(3) Permanent disability benefits for the same injury or illness under the workers’ compensation law of this state, any other state, or the federal government. (Id. at subd. (b).)
EPSL most likely constitutes paid sick time, which is considered “wages.” (Cooper v. Unemployment Ins. Appeals Bd. (1981) 118 Cal.App.3d 166; Barret v. Unemployment Ins. Appeals Bd. (1961) 190 Cal.App.2d 854.) FFCRA refers to EPSL throughout as “paid sick time” (see FFCRA Sec. 5102), and there is no authority limiting the types of paid sick leave that may be considered “wages” for purposes of PFL.
If an employee is already on PFL, the Department of Labor guidance suggests that the employee is most likely not eligible for EPSL. (See DOL Q&A #76.) However, this is not addressed in the regulations, and an employer that fails to provide EPSL as provided in the FFCRA may be liable for failure to pay minimum wage under the Fair Labor Standards Act. (29 CFR § 826.150(a).) Thus, there is risk in denying EPSL to an employee on PFL. Employers that agree to provide EPSL to employees on PFL should advise employees to report the income to EDD. (See Form DE 2501F Instructions at p. 2.) An employee’s failure to report wages could result in overpayment, penalties, and a false statement disqualification. (EDD “Reporting Your Wages – PFL”.)
Alternatively, an employee may choose to terminate PFL by filing a Notice of Change in Claimant Status on the Notice of Automatic Payment – PFL (form DE 2587F) with EDD prior to going on EPSL.
Coordination/Integration of Benefits
“Integration or coordination of Disability Insurance (DI) or PFL benefits is a process in which the full DI or PFL weekly benefit amount is paid to the employee and the employee is also paid wages from you or using the employee’s available leave to cover the difference.” (EDD FAQ Integration and Coordination.) PFL coordination is a voluntary benefit that employers may choose to offer to supplement an employee’s PFL benefits to reach 100% compensation.
If an employer has adopted a policy of coordinating SDI/PFL benefits, the extent to which EPSL will supplement PFL will be determined by the terms of the policy. Any wages, including EPSL, that are coordinated to supplement PFL should be reported as “wages” on the Notice of Paid Family Leave Claim Filed. (EDD FAQ Integration and Coordination.)