California has a paid leave program for self-employed workers. But few are using it

Last year, more Californians filed claims for paid family leave through a state program than ever before, but for Californians who are self-employed or own their own businesses, it’s a different story.

Unlike private sector workers who automatically pay into the State Disability Insurance program through payroll deductions, self-employed workers have to opt-in to a separate program to be able to claim benefits. That program is called Disability Insurance Elective Coverage, or DIEC.

“ A lot of folks are unfamiliar with it,” said  Bianca Blomquist, California director at Small Business Majority.

As of last week, only 1,326 self-employed Californians have opted to participate in the DIEC program, according to the California Employment Development Department. In 2024, more than 2 million Californians reported they were self-employed.

Siobhán Gallagher, a freelance illustrator in Laguna Hills, hadn’t heard about the program. She had her baby two months ago, and has already taken on some freelance work.

“I can still hold her while I'm drawing or like while emailing, but I think it'll definitely be harder as she gets bigger,” she said.

She added that there should be more done to make the program for self-employed workers more well-known — like having it included in paperwork that the doctor’s office hands out to people who are pregnant.

Blomquist said self-employed workers don’t have access to human resources departments or other resources that can tell them about these state leave programs. In addition to the lack of awareness, she said the program also works differently than the program for workers who are payroll.

How DIEC works

For private sector workers in California on payroll, 1.3% of wages is deducted each paycheck to fund the State’s Disability Insurance program, which pays out workers 70-90% of their wages when they go on leave for a disability or to bond with a new child. (California offers up to 39 weeks of disability insurance, and eight weeks of paid family leave).

For the DIEC program, the amount workers pay is higher. In 2026, the premium rate is 8.84% of their net profit.  

”Unlike state disability insurance, where I pay in every paycheck whether I need it or not — the pool of folks in [DIEC] IS a lot smaller and are actually using the benefits, which means that the rates are higher in that program,” Blomquist said.

A worker also has to opt into DIEC at least six months before taking leave — and stay in the program for two calendar years. For some, that might not be worth it. While the program offers the same wage replacement rate as the traditional leave program, Blomquist said she’s worked with small business owners to calculate their break-even points.

For Gallagher, she said even if she found out about DIEC before having her baby, it would have been too late.

“That would have not applied to me,” she said. “And like if the [leave] is unplanned, how are you supposed to anticipate that?”

Florita Ruiz, who owns her own child-care business in Sylmar, is eight months pregnant, but said she anticipates going back to work after a couple of weeks. Before pivoting into child care, Ruiz was an employee at a bank and took paid leave when she had her three children.

“ I had a peace of mind that I was gonna have time to be bonding my baby, but I knew that in this field, there was going to be a lot of challenges, but I love working with children,” she said.

Ruiz said she hadn’t heard about the DIEC program either. Though she would qualify to opt-in as a small business owner, she said she would be unable to take much time off because of the state’s licensing requirements that requires home daycare providers to be present for at least 80% of the time.

“ It is very overwhelming for me and my husband,” she said. “ I have to work, continue working after having my baby to keep up our business open.”