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Employment Development Department
Employment Development Department

FAQs – Integration/Coordination of State Disability Insurance (SDI) Benefits

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Employees/Claimants

Integration or coordination of DI or PFL benefits is a process in which the full DI or PFL weekly benefit amount is paid to the employee and the employee is also being paid wages from the employer. With this process the employee could potentially receive up to 100% of his/her normal gross weekly wages for the benefit period (provided the employee has leave balances available).

For example: An employee’s current gross weekly wage is $500. The weekly benefit amount from PFL 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 the equivalent of his/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 balance.

This process may allow an employee to receive up to 100% of his/her normal gross weekly wages during a period of disability or family care leave while using a reduced amount of his/her leave balance.

When the integration/coordination process is used, and the EDD has confirmed use of this process by the employer, the EDD will pay the employee the full DI or PFL benefits. This reduces follow up contacts to the employer for further wage information. For additional information regarding employers who have decided to integrate/coordinate wages or who no longer want to provide wage integration/coordination of benefits, visit the SDI FAQs page.

The most common types of payments that are considered regular wages are sick leave, bereavement pay, back pay, earnings (full or partial return to work).

For DI benefits, the employee should respond to question A26 on the Claim for Disability Insurance Benefits form, DE 2501, by entering one of the phrases/acronyms below within the field labeled “Other”. For PFL benefits, the employee should respond to question A21 on the Claim for Paid Family Leave Benefits, DE 2501F, by entering one of the phrases/acronyms below within the field labeled “Other” (Sample DE 2501F Question A21). Another option is for an employee to attach a letter to either the DE 2501 or the DE 2501F to report all wages including integrated/coordinated wages.

These are some sample phrases or acronyms that may be used as an identifier of integration/coordination on either the DE 2501 – Question A26 or the DE 2501F – Question A21:

  • Less State Disability Insurance Benefits (LSDI), DE 2501
  • Less Paid Family Leave Benefits (LPFL), DE 2501F
  • Coordinated Benefits (Both Forms)
  • Integrated Benefits (Both Forms)
  • Regular Pay minus DI or PFL (Both Forms)

The EDD may disclose this information to the employer if the employee (claimant) has provided his/her written authorization on the initial DI or PFL claim forms or has submitted a separate written authorization stating the EDD may disclose benefit payment information to his/her employer pursuant to Section 1094 of the California Unemployment Insurance Code. If authorization is given on the Claim for Disability Insurance Benefits, DE 2501, refer to question A27. If authorization is given on the Claim for Paid Family Leave Benefits, DE 2501F, refer to question A22 (Sample DE 2501F, Question A22).

Employers

Integration or coordination of DI or PFL benefits is a process in which the full DI or PFL weekly benefit amount is paid to the employee and the employee is being paid wages from the employer. With this process an employee could potentially receive up to 100% of his/her normal gross weekly wages for the benefit period (provided the employee has leave balances available).

For example: An employee’s current gross weekly wage is $500. The weekly benefit amount from PFL 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% of their 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.

The California Unemployment Insurance Code, Section 2656, provides that wages received during a period of disability or family care leave, plus DI or PFL benefits, cannot exceed the employee’s normal gross weekly wage (excluding overtime pay) immediately prior to the commencement of the disability or period of family care leave.

SDI is a partial wage-replacement program, meaning that if an employee should stop working due to a disability or due to the need to care for an eligible family member, the employee must be suffering a wage loss to qualify for SDI benefits.

The most common types of payments that are considered wages are sick leave, bereavement pay, back pay, and earnings (full or partial return to work).

This process may allow an employee to receive up to 100% of his/her normal gross weekly wages during a period of disability or family care leave while using a reduced amount of his/her leave balances.

When the integration/coordination process is used, and the EDD has confirmed use of this process by the employer, EDD will pay the employee the full DI or PFL benefits. This reduces follow up contacts to the employer for further wage information.

Currently, the claimant receives a Notice of Computation from DI or PFL verifying the claim effective date, the weekly benefit amount, and the maximum benefit amount of the claim. In addition, with each DI or PFL benefit payment issued, the claimant receives a payment notification verifying the amount and period covered by each benefit payment. The claimant may provide this information to the employer to ensure the appropriate amount is deducted from the regular wages and to prevent any benefit overpayment. The DI or PFL benefits received in conjunction with any wages paid by the employer may total up to 100% of their normal wages.

The employer needs the DI or PFL benefit information to ensure the accurate amount of wages are paid by the employer to the employee during a period of disability or family care leave.

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

Notes:

  • 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 coordinated/integrated wages from his/her employer in conjunction with the DI or PFL weekly benefit amount.
  • The first seven days of the DI or PFL claim is a non-payable waiting period, therefore wages paid by the employer are not in conflict (i.e., sick leave, holiday pay, etc.) Integration/coordination of benefits begins with the first payable day of DI or PFL benefits.

Employers can contact the EDD online at www.edd.ca.gov under the Contact EDD option at the bottom of the page. After selecting Contact EDD, employers would then select Ask EDD and select the specific program area (Disability Insurance or Paid Family Leave) from a drop down list. Employers also have the option to write to the EDD at the Disability Insurance/Paid Family Leave mailing address noted at the Contact EDD Web page.

NOTE: An employer that has been approved to integrate/coordinate wages may apply the process to any current and future employees.

For assistance with payroll tax questions, call 1-888-745-3886.

For DI benefits, an employer can respond to questions five and seven on the Notice to Employer of Disability Insurance Claim Filed, DE 2503. Question five would be marked as “Yes” and question seven would require an employer to enter one of the phrases/acronyms below within the field labeled “Other”. For PFL benefits, an employer can respond “Yes” to question six on the Notice Of Paid Family Leave Claim Filed, DE 2503F (Sample DE 2503F, Question 6) to report all wages including integrated/coordinated wages.

These are some sample phrases or acronyms that may be used as an identifier on either the DE 2503 or the DE 2503F:

  • Less State Disability Insurance Benefits (LSDI), DE 2503
  • Less Paid Family Leave Benefits (LPFL), DE 2503F
  • Coordinated Benefits (Both Forms)
  • Integrated Benefits (Both Forms)
  • Regular Pay minus DI or PFL (Both Forms)

The EDD may disclose this information to the employer if the employee (claimant) has provided his/her written authorization on the initial DI or PFL claim forms or has submitted a separate written authorization stating the EDD may disclose benefit payment information to his/her employer pursuant to Section 1094 of the California Unemployment Insurance Code. If authorization is given on the Claim for Disability Insurance Benefits, DE 2501, refer to question A27. If authorization is given on the Claim for Paid Family Leave Benefits form, DE 2501F, refer to question A22 (Sample DE 2501F, Question A22).