California Employment Development Department (EDD)
The EDD has released some updates for 2027 for the California State Disability Insurance (SDI) program, which includes Paid Family Leave (CA PFL).
- Contribution rate: 1.4% (increase from 1.3%).
- Voluntary Plan Assessment Rate of Taxable Wages: 0.196% (increase from 0.182%). The assessment rate is 14% of the SDI contribution rate multiplied by taxable wages.
The State Average Weekly Wage (SAWW) for 2027 has yet to be released. The SAWW is used to determine the maximum weekly benefit amount each year and is currently forecasted to increase to $1,791 for 2027. We will send an update once this information is available.
California permits employers to opt out of SDI and establish a private plan for Voluntary Disability and Paid Family Leave Insurance (known as a “Voluntary Plan”), provided certain requirements are met. Among these requirements, the Voluntary Plan’s cost to employees cannot be more than the cost for SDI and benefits paid by the plan must be at least equal to what the EDD would pay.
If you think a Voluntary Plan is a good option for your company and employees, or would like to find out more information, please reach out to your Larkin Client Success Manager or get in touch with us at sales@thelarkincompany.com.
