Finds that, although family and medical leave laws have assisted individuals to balance the demands of the workplace with their family responsibilities, more needs to be done to achieve the goals of family care, children and family health, workforce stability, and economic security.

Finds that many individuals do not have access to family leave laws, and those who do may not be in a financial position to take family leave that is unpaid, and that employer-paid benefits meet only a relatively small part of this need.

Declares it to be in the public interest to establish a program that: (1) Allows parents to bond with a newborn or newly placed child;

(2) Provides limited and additional income support for a reasonable period while an individual is away from work on family leave;

(3) Reduces the impact on state income support programs by increasing an individual's ability to provide caregiving services for a child while maintaining an employment relationship; and

(4) Establishes a wage replacement benefit to be coordinated with current existing state and federal family leave laws.

Appropriates the sum of eighteen million dollars, or as much thereof as may be necessary, for the biennium ending June 30, 2009, from the family leave insurance account to the department of labor and industries for the initial administration of the family leave insurance program.

Provides that, beginning September 1, 2010, the department shall report to the legislature by September 1st of each year on projected and actual program participation, premium rates, fund balances, and outreach efforts.