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Employers, take note: California Voluntary Plan Program releases 2024 rates for state disability insurance

The California Employment Development Department (EDD) Voluntary Plan Administration Team released, ahead of the annual General Release Letter, the 2024 State Disability Insurance (SDI) Contribution and Voluntary Plan Assessment Rates. These rates will go into effect on January 1, 2024. 
 The 2024 rates will be as follows: 


2024 Rates:


DI/PFL Contribution Rate


California employees pay mandatory contributions to reimburse the Disability Insurance (DI) Fund for State Disability Insurance (SDI) coverage. The contribution rate is the percentage withheld from the wages of employees who are covered by Disability Insurance (DI) and Paid Family Leave (PFL). 
 The 2024 Rate reflects an increase from 2023, where the Contribution Rate was 0.9%.

Maximum Weekly Benefit Amount


This is the maximum weekly benefit amount paid to an eligible SDI program recipient. 
 The Maximum Weekly Benefit was not increased from the 2023 amount, which was also $1,620.

Voluntary Plan Assessment Rate of Taxable Wages


This is the amount paid by employers to the EDD for administrative costs arising out of a Voluntary Plan
 The 2024 Rate reflects an increase from 2023, where the Voluntary Plan Assessment Rate was 0.00126%, and reverting to the 2022 Voluntary Plan Assessment Rate.

State Average Weekly Wage (SAWW)


The 2024 SAWW reflects a decrease from 2023, where the SAWW was $1,651.

Also, the EDD noted a reminder that, effective January 1, 2024, California Senate Bill 951 removes the taxable wage limit and withholdings for each employee subject to SDI contributions. However, Voluntary Plan employers may elect to retain the wage ceiling. 

What will this change within Alight Leave Solutions?

Alight Leave Solutions has documented the changes to the 2024 State Disability Insurance (SDI) Contribution and Voluntary Plan Assessment Rates and will manage benefit calculation offsets accordingly, based on the 2024 maximum benefit amount. 

What employers should consider 

Employers who do not offer a Voluntary Plan for their California-based employees should prepare to work with their payroll administrator to ensure that the increased contribution rate is met starting January 1, 2024. Employers who do offer a Voluntary Plan should ensure that their Voluntary Plan does not cost their employees more than the State plan, if employee-funded, and ensure the Voluntary Plan’s maximum weekly benefit meets or exceeds the State’s maximum. Voluntary Plan employers should also work with their tax representatives to ensure they meet the increased Voluntary Plan Assessment Rate. 

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