Planning for a baby while running a business? 

You’re not alone. One of the most frequent questions I receive from California women who own their own business is: “Am I even eligible for Paid Family Leave in California?” If you’ve ever tried to Google it, you probably ran straight into a wall of confusing, conflicting info.

You might’ve heard things like:

“Business owners don’t qualify.”
“You have to shut your business down to collect benefits.”
“You have to abandon your clients.”

None of that is totally true, but there are very specific requirements you need to meet. And most HR teams (if you even have one) lack the expertise to guide business owners through this process. So let’s break down what you need to know.

What Is Paid Family Leave in California — and Does It Apply to You?

Paid Family Leave in California (PFL for short) is a state benefit that provides partial income replacement when you need time off to bond with a new child or care for a sick family member. It’s funded by you, through mandatory payroll taxes that you likely already contribute to via SDI (State Disability Insurance).

If you’re a California business owner taxed as an S Corporation and you pay yourself W2 payroll income, here’s the good news:
You may qualify for Paid Family Leave, Disability Insurance, and more.

But — and this is a big but — you need to set things up the right way.

The Challenge: Most S Corp Business Owners Are in the Dark

Here’s the real issue: the state doesn’t provide specific guidance on how business owners can qualify. The available info is generic. And most accountants and HR pros don’t know how to interpret these requirements for S Corps.

If you’re not asking the right questions or documenting things the right way, you risk:

• Getting denied for benefits despite your eligibility.
• Missing out on $17K–$86K in potential income replacement.
• Burning yourself out trying to DIY your maternity leave and bonding time.
  
  

The most concerning aspect? You may never realize you could have qualified for these benefits..

“I Pay Into SDI — Isn’t That Enough?”

Not exactly. Simply paying into SDI (State Disability Insurance) doesn’t automatically guarantee  PFL or maternity leave benefits.

To qualify, you must:

• Be classified as an employee of your company (W2 wages, not just owner distributions)
• Be actively paying into CA SDI through your payroll system
• Submit all required paperwork exactly as the state specifies
  
  

Any misstep on any of these requirements, the state can deny your claim, and the appeals process takes time and specialized knowledge.

This official guide from the EDD explains the basic requirements, but it doesn’t dive into how S Corp owners can actually make it work.

Let’s Talk Maternity Leave: Can You Keep Working?

This is where it gets even trickier. California allows you to collect Paid Family Leave or State Disability Insurance, but there are limits to what you can do in your business while receiving benefits.

Here’s what we often hear:

“I’ll just keep managing emails or client projects during leave — that should be fine, right?”

Not necessarily. Certain types of work can disqualify you from benefits if you're not careful. But there are ways to legally delegate, automate, and plan ahead strategically so your business runs smoothly while you collect your benefits.

It simply requires strategy and paperwork, which most business owners are unaware of.

The Bottom Line: You Need Real Support — Not Guesswork

If you’re a California S Corp business owner and you’re planning a family (or even thinking about it in the next year), don’t wait until you’re 8 months pregnant to figure this out.

You deserve to understand your rights and options — and how to structure your business operations so you don’t miss out on thousands in benefits.

I work with S Corp owners like you daily, helping them:

• Strategically coordinate benefits across Disability + PFL programs
• Maximize how much time and money they can receive
• Maintain business operations while taking actual leave
• File paperwork correctly and avoid nightmares and costly claim denials
  
  

Need Help Navigating Paid Family Leave California?

If you’re feeling overwhelmed by these requirements or simply want to do it right the first time, reach out.

We offer unlimited 1-1 consulting specifically designed for S Corp owners who want to take real, paid leave, without putting their business at risk.