The California Employment Development Department (EDD) has released its May forecast for the 2020 Disability Insurance (DI) Fund. The DI fund provides State Disability Insurance (SDI) and Paid Family Leave benefits for California employees. The 2020 employee contribution rate is expected to increase from 1.0% to 1.1%; the maximum weekly benefit is expected to increase from $1,252 to $1,327; and the taxable wage base, from which DI contributions are taken, is expected to increase from $118,371 to $125,462. The final 2020 DI Fund forecast is expected to be published in late October.
California employers may opt out of the state plan if a private plan, Voluntary Disability Insurance (VDI), is established and certain requirements are met. Two of these requirements are that the employee cost of VDI cannot be more than what the employee would pay for SDI and the benefits paid by VDI must be at least equal to what SDI would pay. For more information about VDI, please contact The Larkin Company.
The Larkin Company will reach out to clients for whom we administer VDI to assist them in planning for 2020.