Former Gov. Gray Davis signed a law that makes California the first state to offer workers paid family leave.

The law, financed by an employee payroll tax, allows workers to take six weeks off to care for a newborn, a newly adopted child or a sick family member.

Employees will be eligible to receive 55% of their wages during their absence, up to a maximum of $728 a week. "I don't want Californians to choose between being good parents and good employees," said Davis, a Democrat.

Supporters hope the law will serve as a nationwide model, while business groups denounced it as too costly for employers. Federal law grants up to 12 weeks of unpaid leave for workers at businesses with more than 50 employees.

The paid-leave law is the latest of several groundbreaking social and environmental laws passed in California this year.

Under this paid-leave program, workers are allowed to take time off as of July 1, 2004. The program will be funded entirely by employee payroll deductions, averaging about $27 a year and ranging up to $70 a year for those earning more than $72,000 annually.

About 13 million of California's 16 million workers will be eligible for the leave plan. State and local government employees contribute to a different plan.

Businesses with fewer than 50 employees are not required to hold a job for a worker who goes on paid family leave.

California business groups had tried to kill the bill. "It's very discouraging, and California small businesses are going to pay the price for this bill," said Julianne Broyles, a lobbyist for the California Chamber of Commerce. "They are going to have to compete with similar businesses in other states that don't have to contend with this."

Broyles said the law fails to address the real cost to employers, which includes paying for overtime, replacement workers and training to fill in for those who go on family leave.