What is the California State Disability Insurance program, and what are employer requirements and employee eligibility rules?

The California State Disability Insurance (SDI) program provides short-term disability insurance (DI) and paid family leave (PFL) wage replacement benefits to eligible workers who need time off work.

For information on PFL, see What are the benefits and requirements under California's Paid Family Leave program?

DI is a partial wage replacement program to provide short-term benefits to eligible California workers who suffer a loss of wages when they are unable to work due to a nonwork-related illness or injury or when they are medically disabled due to pregnancy or child birth. It is typically funded through employee payroll deductions and is administered through the Employment Development Department (EDD).

DI Employer Requirements

Employers are required by law to withhold and remit DI contributions and to inform their employees of DI benefits. Employers are responsible for providing information about DI to their employees by posting and furnishing the following information:

• Notice to Employees: Unemployment Insurance/Disability Insurance Benefits (DE 1857A): Advises employees of their right to claim unemployment insurance (UI), DI and PFL benefits.
• State Disability Insurance Provisions (DE 2515): For new hires and again when an employee notifies the employer that he or she needs to take time off from work due to a nonindustrial medical condition.

DI Employee Eligibility

Workers who suffer a loss of wages when they are unable to work due to a nonwork-related illness or injury, pregnancy or child birth may be eligible for DI benefits. Employees who have no wage loss are not eligible. For example, if an employee is being paid through sick leave benefits, the employee would not be suffering a wage loss. However, if an employee is receiving sick leave benefits that cover only part of his or her regular pay, then the employee would likely be eligible for DI benefits.

To receive DI benefits, an employee must meet the following basic eligibility requirements:

• Be unable to do his or her regular or customary work for at least eight consecutive days.
• Be employed or actively looking for work at the time he or she becomes disabled.
• Have lost wages because of disability or, if unemployed, have been actively looking for work when the disability began.
• Have earned at least $300 from which DI deductions were withheld during the base period.
• Be under the care and treatment of a licensed doctor or accredited religious practitioner during the first eight days of disability. An employee must remain under care and treatment to continue receiving benefits.
• Complete and mail a claim form within 49 days of the date he or she became disabled, or complete process online; otherwise, the employee may lose benefits. See State Disability Online Process.
• Have a doctor complete the medical certification of the employee's disability. A licensed midwife, nurse/midwife or nurse practitioner may complete the medical certification for disabilities related to normal pregnancy or child birth. For employees under the care of a religious practitioner, a practitioner's certificate (DE 2502) is available from the DI office. Certification by a religious practitioner is acceptable only if the practitioner has been accredited by the EDD.

An independent medical examination to determine an employee's initial or continuing eligibility may be required if the employee's estimated date of recovery exceeds the normally expected duration of a disability for the certified medical diagnosis.

A worker is not eligible for DI benefits in the following circumstances:

• Is not suffering a loss of wages.
• Is claiming or receiving unemployment insurance or paid family leave benefits.
• Became disabled while committing a crime resulting in a felony conviction.
• Is in jail, prison, recovery home or any other place as a result of being convicted of a crime.
• Is receiving workers' compensation benefits at a weekly rate equal to or greater than the DI rate.
• Fails to have an independent medical examination when requested to do so.

Part-time employees and employees whose work hours are reduced as the result of a disability may be eligible to receive DI benefits if they have at least $300 in gross wages in their base period, are suffering a loss of wages and meet the other basic eligibility requirements.

DI Benefits

The benefits of the program are paid through the state EDD, and there is a seven-day waiting period before benefits are paid.

The weekly benefit amount is approximately 55 percent of the earnings shown in the highest quarter of the employee's base period. An employee may collect up to 52 weeks of full DI benefits or the amount of wages earned in his or her base period, whichever is less. The employee may be paid for periods longer than 52 weeks if his or her benefits are reduced because the employee returned to work on a part-time basis or if the employee received other money during his or her disability claim period.

Vacation pay is not in conflict with DI benefits, and an employee can receive DI benefits at the same time he or she receives vacation pay from the employer. However, an employee cannot receive DI benefits for any period in which he or she also received sick leave wages that are equivalent to an employee's full salary. If an employee is receiving only partial sick leave wages, he or she may be eligible for full or partial DI benefits. All other pay (e.g., holiday pay) must be reported to the EDD to determine eligibility for benefits. The first seven days of the DI claim is a nonpayable waiting period, therefore, any type of wages paid by the employer during the waiting period are not in conflict with DI benefits. See FAQ: Disability Insurance Eligibility.

Integration with Other Benefits

The need for integration or coordination of DI benefits occurs when the full DI weekly benefit amount is paid to the employee and the employee is also receiving paid time off from the employer. When this occurs, an employee could potentially receive up to 100 percent of his or her normal gross weekly wages for the benefit period.

For example: An employee's current gross weekly wage is $500. The weekly benefit amount from DI is $275. The $500 minus $275 equals a $225 per week wage loss. Consequently, the employer can integrate/coordinate a maximum amount of $225 per week in gross wages to the employee, resulting in the employee receiving 100 percent of his or her normal weekly gross pay.

Note: "It is the responsibility of the employer and the employee to ensure that the employee is not receiving more than 100% of his/her normal gross wages when receiving integrated/coordinated wages from his/her employer in conjunction with the DI or PFL weekly benefit amount." See CA Integration of Benefits. 

Job Protection

DI does not protect anyone's job. It simply provides partial wage replacement when an employee suffers a loss of wages when he or she is unable to work due to a nonwork-related illness or injury, pregnancy or child birth. An employee may have his or her job protected under other laws, such as the Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA).