Employees in California can now take up to six weeks off to care for a new baby or sick relative and still get 55 percent of their pay under the Paid Family Leave Insurance program (search).

"It is just more humane," said Democratic State Sen. Sheila Kuel (search). "It makes it easier for people to take care of family in a crisis and the employer does not have to pay while you're away."

The state picks up the program's estimated $400 million annual tab.

It's the only program of its kind in the country and business groups say that's because most states realize paid family leave will leave small business in a lurch.

"It's an incentive for people to take time off ... unscheduled, extended time off," said Allan Zaremberg, president of the California Chamber of Commerce (search). "And small business just doesn't have the flexibility to manage people who take long periods of time off from work." 

The state is already among the most expensive in the country to do business, said Zaremberg.

"This is going to bankrupt the employees' State Disability Insurance fund. It's going to cause tax increases on individual workers in California and we need to take action. We need to make California a better place to do business."

Kuel said the program has been set up to "try and balance the needs of the workplace and the family place."

Go to the video box above to watch a report by FOX News' Trace Gallagher.