by Sayema Hameed
California’s State Disability Insurance (SDI) is a partial wage-replacement insurance plan for eligible California workers. The SDI programs are state-mandated and funded through employee payroll deductions. SDI provides affordable, short-term benefits to eligible workers. Workers covered by SDI are eligible for two wage-replacement programs: Disability Insurance (DI) and Paid Family Leave (PFL).
An employee may need SDI benefits in the following situations. First, an employee may need to obtain SDI benefits when a severe injury, illness, pregnancy or childbirth prevents that person from being able to work. Second, an employee may need wage replacement when taking a leave of absence from work to care for an injured or seriously ill family member or to bond with a newborn baby or newly adopted child. An individual needs to be covered under any of these circumstances.
The California Employment Development Department (EDD) provides two solutions: Disability Insurance and Paid Family Leave.
The Disability Insurance (DI) program provides affordable, short-term benefits to eligible workers who suffer a loss of wages when they are unable to work due to a non work-related illness or injury, or due to pregnancy or childbirth.
The Paid Family Leave (PFL) program provides benefits to workers who suffer a loss of wages when they need to take time off from work to care for a seriously ill child, spouse, parent, registered domestic partner, or to bond with a new child.
Disability insurance (DI) provides partial wage replacement to workers that have a mental or physical illness, injury or condition, including pregnancy or childbirth, which prevents the workers from performing their regular work duties.
An eligible individual may collect up to 52 weeks of full DI benefits, or the amount of wages in your base period, whichever is less. The base period is a specific 12-month period of time that the EDD looks at to determine a claimant’s DI benefits amount. A claimant may be paid for periods longer than 52 weeks if DI benefits are reduced because the individual returned to work on a part-time basis or received other money during the disability claim period. You may want to contact the Social Security Administration (SSA) if your disability will be extended.
The EDD administers three types of DI plans: State Plan, Voluntary Plan, and Elective Coverage.
The State Plan is state mandated and funded through employee payroll deductions. The majority of employees are covered by the State Plan, unless an individual is covered by a Voluntary Plan or the individual is an employer or self-employed.
A Voluntary Plan is a private plan that is created by an agreement between the employer and the majority of the employee group. A Voluntary Plan is a substitute for the State Plan that requires EDD approval prior to implementation. A Voluntary Plan must provide all the benefits of the State Plan, have at least one benefit that is better than the State Plan, and it cannot cost more than the State Plan.
Elective coverage allows employers and self-employed individuals the option to elect coverage under State Disability Insurance (SDI). Employers may be sole proprietors, general partners, or select limited liability corporations. Elective coverage requires that employers and self-employed individuals to provide evidence of annual net profit of at least $4,600 or average $1,150 per quarter if in business for less than one year. If the employer or self-employed individual chooses to elect coverage, then the coverage must remain in effect for two complete calendar years unless the individual meets the criteria for early termination. The cost of participating in Elective Coverage, which is set annually, can be obtained by contacting your local EDD Employment Tax Office.
Requirements for Disability Insurance
Disability insurance benefits can be paid only if all the following requirements are met:
- The person (claimant) claiming the benefits must be unable to perform their regular or customary work for at least eight consecutive days.
- The claimant must be employed or actively looking for work at the time the claimant became disabled.
- The claimant must have lost wages because of the disability or, if unemployed, have been actively looking for work.
- The claimant must have earned at least $300 in wages from which SDI deductions were withheld during the established base period.
- The claimant must be under the care and treatment of a licensed physician or practitioner or accredited religious practitioner during the first eight days.
- The claimant must complete and submit a claim form within 49 days of the date the claimant became disabled.
- The physician or practitioner must complete the medical certification of the claimant’s disability.
A claimant will be ineligible to receive Disability Insurance benefits if he or she is already claiming or receiving unemployment insurance or paid family leave benefits while applying for state disability insurance.
Although a claimant is not allowed to receive wages, including sick leave wages equivalent to full salary, during the period in which the claimant is receiving DI benefits, a claimant is allowed to receive vacation pay during the DI benefits period. If a claimant receives only partial sick leave wages, the claimant may be eligible for partial DI benefits.
All other pay (e.g., holiday pay) must be reported for the EDD to determine eligibility for benefits. The first seven days of the DI claim is a non-payable waiting period; therefore, wages paid by the employer during the first seven days are not in conflict (including sick leave, holiday pay).
Paid Family Leave (PFL)
PFL is a component of State Disability Insurance that allows compensation to individuals in certain situations. The situations that are covered are as follows: individuals who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new child, or a child in connection with adoption or foster care placement. A medical certificate is required when a PFL claim is filed to provide care for ill family members.
The requirements for PFL are the same as SDI, but, depending on the situation, there are additional requirements to obtain PFL benefits, as follows:
- If caring for a seriously ill family member:
- The care recipient must be your child, parent, spouse, or registered domestic partner.
- The care recipient must be under the continuing treatment or supervision of a licensed doctor or accredited religious practitioner while the claimant is receiving benefits.
- A medical certificate is required.
- If bonding with a new child:
- The family leave must take place within 12 months of the birth or adoption.
- The new child must be either your biological child, adopted child, or foster child or that of your registered domestic partner.
No more than six weeks of PFL benefits may be paid within any 12-month period. The maximum PFL claim benefit is six times the weekly benefit amount.
The medical certificate is needed for either a Disability Insurance claim or Paid Family Leave claim. The medical certificate is issued by a doctor that must include the following: the diagnosis and International Classification of Diseases code, beginning date of the disability; the probable duration; estimated time of care that is needed; and a statement that the serious health condition warrants the participation of the employee to provide care.
Physicians can create an SDI Online account on the EDD website to file medical certificates online. For more information, see the following:
SDI Online Tips For Physicians and Practitioners
SDI Online Video For Physicians and Practitioners
Filing A Claim
An individual can apply for either Disability Insurance or Paid Family Leave benefits online or by mail. To learn more or to file a claim, visit the EDD’s website:
How to File a Disability Insurance Claim
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