California State Disability Insurance

California State Disability Insurance (SDI) is a partial wage-replacement insurance plan for California workers. The SDI program is State-mandated, and funded through employee payroll deductions. SDI provides affordable, short-term benefits to eligible workers who suffer a loss of wages when they are unable to work due to a NON WORK-RELATED illness or injury, or a medically disabling condition from pregnancy or childbirth.

The majority of California employees, approximately 12 million workers, are covered by the SDI program. Some employees are exempt from SDI; for example, railroad employees, some employees of non-profit agencies, employees who claim religious exemptions, and most government employees.

Four other states and one Commonwealth offer a disability insurance program. They are Rhode Island, New Jersey, New York and Hawaii, and the Commonwealth of Puerto Rico. Each state operates its program independently.

What is the State Disability Insurance (SDI) program?
The State of California administers the State Disability Insurance program, commonly referred to as SDI. This is a public disability insurance program that pays a weekly benefit every other week. The State of California has administered this benefit since 1946.

Who Pays for State Disability Insurance (SDI)?
Through payroll taxes, employees pay State Disability Insurance premiums. Self-employed persons may participate by enrolling in elective coverage and pay premiums based on IRS quarterly reporting.

Do all employers participate in the State Disability Insurance (SDI) program?
No. Employees of the federal government and some state government workers are not eligible to participate in State Disability Insurance (SDI). Employers that do not participate in SDI program are required to participate in a voluntary plan through an insurance carrier or a self-insured plan. To qualify, the plan must be superior to the coverage offered through SDI but not cost more than SDI for the employee.

By what other names is the State Disability Insurance (SDI) program known?
The acronym used by the State Disability Insurance program is SDI although others may use DI. State Disability may also be referred to as short term disability, which can cause misunderstandings. Short term disability refers to private disability insurance that can be offered from an employer or purchased by individuals.

Are State Disability Insurance (SDI) programs available and the same in the rest of the country?
No. There are only five states that provide state disability programs, California, Hawaii, New Jersey, New York, Rhode Island, and the Commonwealth of Puerto Rico. Each state or Commonwealth governs how its program is structured.

Who is eligible for the State Disability Insurance (SDI) program? 
To be eligible, you must have paid into the State Disability Insurance fund with a payroll deduction through a California employer. If you are self-employed you may participate by paying into what is called elective coverage. Federal and some state government employees are not eligible to participate in State Disability Insurance.

To be eligible to receive the full 52-week benefit (39 for self-employment), you must have paid into the State Disability Insurance fund for a minimum of 18 months. Individuals who have paid into State Disability Insurance for more than 6 months and less than 18 months may be eligible to receive benefits for shorter periods of time.