As of January 1, 2025, a significant change to California’s Paid Family Leave (PFL) program took effect — and many California employers may still be operating with outdated policies in their employee handbooks.
If you’re a business owner, HR manager, or internal compliance officer, it’s crucial to understand how this change impacts your workforce policies, especially those that govern time off during disability or pregnancy-related leaves.
What Changed in 2025?
Previously, California employers were allowed to require employees to use their accrued paid time off (PTO) or vacation time before applying for Paid Family Leave benefits through the State Disability Insurance (SDI) program.
That’s no longer the case.
As of January 1, 2025:
- Employers cannot require employees to use PTO or vacation time before accessing PFL.
- Employees now have the right to choose whether or not to use their PTO during a qualifying leave.
- Employers may still offer the option to use PTO, but it must be voluntary, not mandatory.
Why This Matters for Employers
This change reflects a broader shift in employee rights — treating PTO as a protected benefit rather than a resource employers can control during state-subsidized leave periods.
Failing to update your internal policies and documentation may expose your company to:
- Non-compliance with California labor law
- Employee complaints or legal action
- Disruption during leave management or return-to-work transitions
Common Pitfall: Outdated Language in Your Handbook
One of the most common issues we’re seeing right now is language in employee handbooks that still says employees “must” use PTO during the first 14 days of PFL or FMLA leave. This typically shows up in policies related to:
- California Family Rights Act (CFRA)
- Family and Medical Leave Act (FMLA)
- Disability and pregnancy-related leaves
This language must be revised to reflect that employees may choose to use their PTO — not that they are obligated to.
What Employers and HR Should Do Now
To ensure compliance and protect your business, take the following steps:
1. Review Your Employee Handbook
- Look closely at all leave-related policies, including FMLA, CFRA, PFL, and SDI.
- Identify any language that mandates PTO use.
2. Update Your Policies
- Replace mandatory language (e.g., “must use PTO”) with permissive language (e.g., “may choose to use PTO”).
- Ensure your policies are consistent across all documents — inconsistencies can create legal gray areas.
3. Educate Your HR Team and Managers
- Make sure anyone involved in leave administration understands the new rules.
- Clarify that leave coordination should now emphasize employee choice.
4. Communicate With Employees
- Update employees on their rights regarding PFL and PTO use.
- Offer guidance during the leave request process to avoid confusion.
5. Consult Employment Counsel
- Have an experienced employment law attorney review your revised handbook and leave policies.
- Get guidance on how to implement these changes correctly and consistently.
Final Thoughts
The 2025 update to California’s Paid Family Leave law is a powerful reminder that employment law is constantly evolving — and your policies need to evolve with it.
At Koegle Law Group, we help California businesses stay compliant, protected, and prepared for what’s next. Our firm believes that “knowledge is power” and that empowerment allows business owners and management teams to make well-informed decisions
Need help updating your employee handbook or navigating this change?
Contact Koegle Law Group today to schedule a consultation.
