People Operations | Management

State Disability Insurance

State Disability Insurance (SDI)   is a   state-mandated   partial wage replacement program to provide short- term benefits to eligible California workers who suffer a loss of wages when they are unable to work due to a   non-work-related   illness or injury or when they are medically disabled due to pregnancy or childbirth. It is typically funded through employee payroll deductions and is administered through the   Employment Development Department (EDD) .


There is a   seven-day   eligibility period, and the weekly benefit amount is approximately 55 percent of earnings up to the maximum weekly benefit amount.

Employees who have no wage loss are not eligible. For example, if an employee is being paid through sick leave benefits, the EDD would not interpret this as a wage loss. However, if an employee is receiving sick leave benefits that cover only part of his or her regular pay, then this would not likely impact eligibility for SDI benefits.


SDI has certain exclusionary classes of individuals who may not be required to contribute to the SDI funds. Some government workers, including school employees, may be entitled to SDI benefits as a function of collective bargaining.


The Disability Insurance Branch of the EDD administers three disability insurance plans:


State plan.   This plan covers most California employees who pay into the fund through a tax deducted from their paycheck.

Voluntary plans.   These are private plans that an employer may choose as a substitute. Such a plan must be approved by the director of the EDD. The coverage, rights and benefits must be as good as the   state-mandated   plan in all respects and better in at least one provision. Voluntary plans may be established as long as the majority of the company’s employees agree. The employer pays an assessment to the EDD based on wages and a security deposit to the state treasurer to cover payments under the plan’s obligations. Voluntary plans may be either underwritten by an insurance company or self-insured.

Elective coverage.   An employer or   self-employed   individual may elect coverage. An employer must obtain the consent and approval of the majority of eligible employees in writing before submitting a formal application to the EDD. The method of computing benefits for elective coverage is not the same for employees covered by the state-mandated   plan. The EDD will determine eligibility and computed benefits.


Individuals in family employment that is not subject to the California   Unemployment Insurance Code   may also elect coverage at the same rate as employees covered by the state plan and with the same benefits as the state plan. Elective coverage claims are filed in the same manner as state plan claims; however, there are some differences in the premiums and benefits offered.


Eligibility.   In order for an individual to be eligible for benefits, he or she must meet one of the following conditions:

Be unable to perform regular or customary duties for a period of at least eight consecutive days.

Be employed or actively looking for work at the time he or she becomes disabled.

Have lost wages as a result of the disability or, if unemployed, have actively been looking for work.

Have earned at least $300 from which SDI deductions were withheld during a previous period.

Be under the care and treatment of a licensed doctor or accredited religious practitioner during the first eight days of the disability. (The beginning date of a claim can be adjusted to meet this requirement.)

Complete and mail a claim form within 49 days of the date of the disability.

Have a physician complete the medical certification of disability. A licensed midwife, nurse/midwife or nurse practitioner may complete the medical certification for disabilities related to normal pregnancy or childbirth.


If a spouse, registered domestic partner, parent or child is providing care for the claimant, he or she may be eligible for PFL benefits.


An individual will be ineligible for all or part of a period claimed when he or she meets one of the following conditions:

Did not suffer any loss of wages.

Are claiming or receiving Unemployment Insurance or PFL benefits.

Became disabled while committing a crime resulting in a felony conviction.

Are in jail, prison, a recovery home or any other place as a result of being convicted of a crime.

Are receiving workers’ compensation benefits at a weekly rate equal to or greater than the SDI rate.

Fail to have an independent medical examination when requested to do so.


Part-time   reduced work schedules.   Part-time   employees who have at least $300 in gross wages in their base period, are suffering a loss of wages and meet all other basic eligibility requirements may also be eligible to receive SDI benefits.

Individuals who suffer a loss of wages as a result of reduced hours or wages may also be entitled to disability benefits.


If an employee’s work hours must be reduced as the result of a disability, and the employee suffers a wage loss due to being unable to perform his or her regular or customary duties for a period of at least eight consecutive days, the employee may be eligible to receive SDI benefits.


Employer requirements.   Employers are required by law to withhold and remit SDI contributions and to inform their employees of SDI benefits. State and federal regulations require employers to display various posters and notices to inform their employees of certain laws and regulations pertaining to employment and working conditions. Currently, employers are responsible for providing information on SDI to their employees by posting and providing the following:

Notice to Employees: Unemployment Insurance and Disability Insurance Benefits. Advises employees of their right to claim Unemployment Insurance, Disability Insurance and PFL benefits.

State Disability Insurance Provisions.   Must be provided to new hires and again when an employee notifies the employer that he or she needs to take time off due to a nonindustrial medical condition.

Paid Family Leave Insurance Program.   Most be provided to new hires and again when an employee notifies the employer that he or she needs to take time off to care for a seriously ill family member or to bond with a new child.