California EDD Announces 2016 Changes to State Disability Insurance

California EDD Announces 2016 Changes to State Disability Insurance                   

The California Employment Development Department (EDD) has announced that the 2016 employee contribution rate for State Date Disability will remain at .9%.  The taxable wage base from which the contributions will be taken will increase from $104,378 to $106,742 and the maximum cost to an employee will be $960.68.

SDI provides disability and Paid Family Leave (PFL) benefits equal to 55% of the employee’s base period earnings.  For 2016, the maximum weekly benefit will increase from $1,104 to $1,129.

California permits employers to opt out of SDI and establish a private plan for Voluntary Disability Insurance (knows as a “voluntary plan”), provided certain requirements are met.  Among these requirements are that the voluntary plan’s employee cost be no more than the cost for SDI and that benefits are paid by the plan at least equal to what SDI would pay.

The Larkin Company will reach out to clients for whom we administer a voluntary plan to assist them in planning for 2016.