California State Disability Insurance (SDI) and Paid Family Leave (PFL)

Update (06/13/24, Effective 01/01/25): The Employment Development Department (EDD) has announced the projected 2025 Maximum Weekly Benefit Amount to remain the same as 2024 which is $1,620 per week. Additionally, while the current wage replacement rates are 60% to 70% of wages, the rates are projected to increase to 90% for lower wage earners and 70% for all other covered workers beginning January 1, 2025. Lastly, the SDI contribution rate is projected to increase to 1.2% in 2025 from 1.1%. As a reminder, the taxable wage ceiling for state disability insurance was removed in 2024 and should remain the same for 2025.

Update (10/18/24, Effective 01/01/25): Governor Newsom recently signed Assembly Bill 2123 (AB 2123). Coming into effect on January 1, 2025 employers will no longer have the ability to require its employees use up to 2 weeks of accrued vacation before utilizing the state’s paid family leave program, or voluntary plan benefits if the employer has an approved plan through the state.

Additionally, Senate Bill 1090 (SB 1090) was signed, which will provide some future changes to the State Disability Insurance (SDI) program. Currently, the California Unemployment Insurance Code (CUIC) requires the Employment Development Department (EDD) to issue the initial payment for a disability or Paid Family Leave (PFL) claim within 14 days of receipt of a properly completed claim. SB 1090 will instead require initial payment within 14 days of receipt of a properly completed claim or as soon as eligibility begins, whichever is later.

The EDD instructs individuals to wait nine days after their disability starts to file their claim. Under SB 1090, individuals will be able to initiate the claims process up to 30 days in advance of the anticipated first compensable day of their claim. Both changes under SB 1090 will become operative when they are incorporated in the EDD’s integrated claims management system as part of the EDDNext project. You can learn more about the project here.

Update (10/31/24, Effective 01/01/25): The Employment Development Department (EDD) has provided a partial update for the State Disability Insurance program, confirming the increased contribution rate of 1.2% in 2025 (from 1.1% in 2024). The Voluntary Plan Assessment Rate of Taxable Wages has also increased to 0.168% (from 0.154% in 2024). Currently, the forecasted maximum weekly benefit amount remains unchanged (forecasted to be $1,620 per week) as we await the final update to the State Average Weekly Wage (SAWW) for 2025.

Update (11/06/24, Effective 01/01/25): The Employment Development Department (EDD) has now released the SDI maximum weekly benefit amount which has increased to $1,681 per week (from $1,620 in 2024). The State Average Weekly Wage for 2025 has also been confirmed to be $1,704, a 3.8% increase from the $1,642 in 2024.

The Larkin Company will adjust offsets for any top-up (leave of absence pay) calculations or STD, accordingly, if we handle these services for you. The Larkin Company will consider any law changes carefully, and update our internal resources and processes, as well as our employee leave information packets, if necessary.

Please be sure to adjust your contributions in line with the updates, effective 01/01/25. Additionally, please ensure as a company you are offsetting any salary continuation/company top-up pay aligned with the new maximum weekly benefit rate where applicable, effective 01/01/25.*

*Claims that start in 2024 will be awarded 2024 benefit rates. Claims that begin on or after 01/01/25 will be eligible for the new maximum benefit rate.

AB 2123
SB 1090