California made history Monday as the first state to offer paid family leave for employees who take time off their jobs to care for a new child or a seriously ill family member.

The legislation, which provides workers up to 55 percent of their salary for as long as six weeks, was hailed as a major success of a nationwide push by labor and women's groups to help family caregivers.

"I don't want Californians to have to choose between being good parents and good employees," said Gov. Gray Davis, who signed the law in Los Angeles. Families will be able "to help a loved one get through a difficult medical time without going broke in the process," he said.

But some business leaders feared the law will hurt California's economy at a time when many businesses are struggling. California's ability to compete with other states for manufacturing jobs will be hampered, they said.

An estimated 13 million workers covered by the State Disability Insurance Program will be eligible for the leave, which offers benefits up to $728 a week beginning July 1, 2004.

Employees, male and female, will be able to take paid time off to bond with a newborn or adopted child or to care for a seriously ill child, parent, spouse or domestic partner.

State and local government employees, who contribute to a different plan, are exempted from the new law.

Many advocates for California's growing senior population supported the bill. State officials estimate 80 percent of care for the elderly and disabled is provided by family members.

Opposing the law was a coalition of 2,000 business groups who argue that California's employers already suffer from higher costs for utilities and workers' compensation insurance.

"That's one more burden to impose on California businesses that exist only here and nowhere else," said Allan Zaremberg, president of the California Chamber of Commerce. "It places us at a competitive disadvantage."

Opponents included the California Manufacturers and Technology Association and the California Small Business Association.

Zaremberg warned that the state would lose manufacturing jobs because employers would have additional costs in overtime and temporary workers' pay to cover for workers on family leave.

Zaremberg also is worried that small businesses, which will not be exempted, will suffer because they can't afford to lose even one member of their smaller staffs.

To win the bill's passage, state Sen. Sheila Kuehl, D-Santa Monica, decreased the leave to six weeks from 12 and provided for the costs to be borne by employees, not employers. Employees will pay an average of $27 a year in payroll deductions.

Sacramento business owner Lynne Cardwell, chief executive of Sacramento's Car Care Center, praised the compassion behind the new law but expressed worry about its impact. The six-week absence of a key employee could be devastating, she said. Last year, she held open a mechanic's job for eight months because of his illness, costing her thousands of dollars in lost work.

"Six weeks could put some at a huge loss, especially for the under-capitalized business whose cash flow isn't there," she said.

Labor groups, including the California Labor Federation, have been among the biggest backers of paid family leave.

In praising the new law, the federation joined family advocates in saying California is leading the nation in recognizing the burdens of working parents and adult children who care for a growing elderly population. The labor group added that the law also would have the benefit of allowing workers to be more focused and less stressed.

The labor group argues that paid leave is a natural follow-up to the federal Family and Medical Leave Act of 1993, which requires employers with 50 or more employees to offer up to 12 weeks of unpaid leave.

Few workers could afford to take advantage of that act because they needed their income. The U.S. Department of Labor found that 78 percent of the workers who needed leave could not afford it.

California is the first state to offer paid family leave, but 27 states are studying the benefit. The United States is hardly breaking new ground: Many other developed countries offer similar benefits for family emergencies.

"This is a step toward getting our workplace policies in sync with the realities of today," said Debra Ness, executive vice president of the National Partnership for Women & Families, which is pushing for nationwide paid family leave.

Lynn Friss Feinberg, research manager for the Family Caregiver Alliance in San Francisco, said the law will reach across the generations to help caregivers for anyone, from sick newborns to frail seniors.

"The financial toll and stress is enormous," she said. "They do double, triple duty."

Kelly Callison, 59, of Rosemont has known firsthand the burdens of caregiving for the past three years. After she leaves her job as a payroll administrator, she goes home to care for her 79-year-old mother, who has Parkinson's disease.

"I'm really tired," she said. "There's been many times when there are bad days -- that means I haven't slept much that night."

Callison does everything for her mother -- makes her dinner, reminds her to brush her teeth, asks if she's warm or hungry. During the night, Callison listens for falls or sounds of her mother experiencing frightening hallucinations.

Her mother's insurance policy doesn't cover the $1,900 a month for caregivers while Callison is working. Paid leave could give Callison a break from her grueling schedule.

"It's really difficult," said Callison, who said she doesn't anticipate ever being able to retire. "Your life's not your own anymore."

The law's provisions

* Allows up to six weeks to care for a newborn, a newly adopted child or an ill family member.

* Workers can get 55 percent of their wages -- up to $728 a week.

* Leaves may begin July 1, 2004.

* Funding comes from payroll deductions, averaging $27 a year and ranging up to $70 for those earning $72,000 or more.

* About 13 million of California's 16 million workers would be eligible, exempting state and local government employees who use to a different plan.

* Employers can first require the use of up to two weeks of unused vacation time.

* Businesses with fewer than 50 employees are not required to hold a job open for a worker on leave.