California is known for its progressive labor laws, which often set the standard for other states. For employers and HR professionals, however, this creates unique challenges in designing and administering compliant employee benefit plans. Understanding the key differences between federal requirements and California-specific regulations is critical to staying ahead in 2025.
Key Differences Between Federal and California Regulations
Paid Leave Obligations
While the federal Family and Medical Leave Act (FMLA) provides unpaid leave, California goes further with its robust paid leave programs. Employers must adhere to the California Family Rights Act (CFRA) and Paid Family Leave (PFL), both of which require paid time off for qualifying life events. Effective 2025, updates to these programs include expanded definitions of family members and increased maximum leave durations.
Health Coverage Mandates
California extends its healthcare mandates beyond federal requirements under the Affordable Care Act (ACA). Large employers must ensure their health plans meet California-specific standards, such as offering coverage for fertility treatments and gender-affirming care—provisions not federally mandated. Non-compliance can result in substantial penalties at both the state and federal levels.
Compliance with Wage Replacement and Supplemental Benefits
California’s short-term disability insurance (SDI) program offers wage replacement for employees unable to work due to disability or caregiving responsibilities. Employers who design supplemental benefits, such as voluntary insurance plans, must ensure they align with state laws. Regular audits and updates are crucial to avoid conflicts with California’s strict regulatory framework.
Best Practices for Navigating Compliance
Conduct Regular Compliance Audits
Employers should conduct annual reviews of their benefit plans to ensure adherence to both federal and state laws. Collaborating with a compliance expert familiar with California’s regulations can help identify gaps and avoid penalties.
Invest in Employee Communication
Clearly communicating benefit offerings and updates is vital. HR teams should create accessible resources, conduct training sessions, and answer employee questions to foster better understanding and satisfaction.
Stay Proactive with Legislative Updates
California frequently updates its labor laws. Subscribing to trusted legal updates or partnering with a benefits administrator specializing in California regulations can help you stay informed and prepared.
Stay Compliant and Competitive with EBPA
At EBPA, we help California employers navigate the complexities of employee benefits with expert guidance and tailored solutions. 📞 Contact us today at (626) 201-7111 or visit ebpa.net to learn how we can support your business in 2025 and beyond.
Ensure your employee benefit plans stay compliant, competitive, and aligned with California’s unique regulations by partnering with EBPA—a trusted leader for over 20 years.
