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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:
Updates: | 2024 Rates: | Notes: |
DI/PFL Contribution Rate | 1.1% | 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). |
Maximum Weekly Benefit Amount | $1,620 | This is the maximum weekly benefit amount paid to an eligible SDI program recipient. |
Voluntary Plan Assessment Rate of Taxable Wages | 0.00154% | This is the amount paid by employers to the EDD for administrative costs arising out of a Voluntary Plan. |
State Average Weekly Wage (SAWW) | $1,642 | 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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