California Paid Leave in 2025: What Employers Should Know as the Year Wraps Up 

California has continued to lead the nation in employee leave protections, and 2025 has been a major year of updates for Paid Family Leave (PFL) and related benefit programs. As employers close out the year, it’s important to make sure your payroll and HR policies reflect these changes and that your team is prepared for what’s next. 

Here’s a quick recap of what changed in 2025 and what California employers should keep in mind moving forward. 

Higher Benefit Rates Are Now in Effect

One of the biggest updates in 2025 was the increase in Paid Family Leave benefit levels. For employees earning less than $63,000 annually, benefits now cover up to 90% of wages during approved leave. For higher earners, the replacement rate remains around 70%. 

This change has made it easier for lower-income employees to take the time they need for family care, bonding, or recovery and it has required employers to update their leave communications and payroll coordination to reflect new wage replacement amounts. 

Vacation and PTO Are No Longer Required Before PFL

Before 2025, many employees had to use accrued vacation or paid time off before they could receive PFL benefits. Under the new rules, that’s no longer the case. 

Now, employees can access their PFL benefits directly without exhausting their other paid leave first. For employers, this means updating policy language, employee handbooks, and HR systems to reflect the change and ensuring managers understand how to coordinate different types of leave correctly. 

Expanded Qualifying Reasons for Leave

In 2025, California also expanded PFL eligibility to cover additional circumstances, including certain situations involving victims of serious crimes and family members who are assisting them. 

Employers should confirm that HR teams and supervisors are aware of these expanded categories to ensure employees are properly supported and that leave requests are handled consistently. 

Compliance Across Multiple Leave Laws

As always, California’s leave programs intersect with the California Family Rights Act (CFRA), Paid Sick Leave, and the federal Family and Medical Leave Act (FMLA). 

Because these laws overlap, accurate tracking is critical. Employers should verify that HR and payroll systems can handle concurrent leaves properly, record qualifying events correctly, and apply the appropriate wage replacement rules. 

Year-End Review and Planning for 2026

As you prepare for 2026, this is the perfect time to: 

• Review your leave policies and employee handbook for compliance. 

• Audit payroll systems to confirm PFL benefits and tax reporting are up to date. 

• Train HR and management staff on the expanded leave rules. 

• Communicate changes clearly to employees to reduce confusion and improve trust.Keeping your leave programs compliant helps protect your business while supporting the well-being of your team. 

  How Journey Payroll & HR Can Help 

  At Journey Payroll & HR, we help California businesses navigate complex and evolving employment laws. Our team provides the tools, systems, and guidance you need to stay compliant from leave tracking and payroll configuration to employee communication and handbook updates. 

  If you haven’t reviewed your paid leave processes this year, now is the time. We’ll help ensure your systems are accurate, compliant, and ready for a smooth start to 2026. 

  Contact Journey Payroll & HR today to schedule a year-end payroll and HR compliance check.