November 19, 2024
On September 28, 2024, California Gov. Gavin Newsom approved SB 1090, which increases California state disability insurance (SDI) and paid family leave (PFL) benefits and takes effect on January 1, 2025.
Effective January 1, 2025, these programs will generally provide 70%-90% wage replacement for California workers, an increase from the current 60%-70% range.
Wage replacement will be based upon the amount of wages paid to an individual during the quarter of their disability base period in which their wages were highest, as follows:
Where that amount is less than $722.50, then the weekly benefit will be $50.
Where that amount is more than 70% of the state average quarterly wage, then the weekly benefit amount will be equal to 70% of the wages paid during the quarter of the individual’s disability base period in which their wages were highest, divided by 13, or the maximum weekly benefit amount set by the Department of Industrial Relations (DIR) annually, whichever is greater.
Where that amount is more than $722.50 but 70% or less than the state average quarterly wage, then the weekly benefit amount is equal to 90% of the wages paid during the quarter of the individual’s disability base period in which their wages were the highest, divided by 13, but cannot be greater than the maximum weekly benefit amount set by the DIR annually.
The DIR has set the maximum weekly benefit amount at $1,681 for 2025.
Furthermore, the 2024 employee contribution rate for the SDI and PFL will increase from 1.1% in 2024 to 1.2% in 2025. There is no taxable wage cap.
California employers should be aware of these changes to the state’s SDI and PFL programs.
Bill Text - SB-1090 Unemployment insurance: disability and paid family leave: claim administration
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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