FAQs – Integration/Coordination of State Disability Benefits

Employees/Claimants

• What is integration/coordination of State Disability Insurance (SDI), Disability Insurance (DI), or Paid Family Leave (PFL) benefits?
• How does the integration/coordination process benefit me as a full-time or part-time employee?
• What types of payments or benefits received by the employee, from the employer, are considered wages with DI and PFL benefits?
• If your employer has agreed to a policy of integration/coordination of benefits and has notified the Employment Development Department (EDD), how does an employee respond to the wage questions on the SDI forms?
• Can EDD tell the employer how much SDI is paying an employee per week?

Employers

• What is integration/coordination of SDI, DI or PFL benefits?
• How does the law provide for wage integration or coordination with the EDD SDI (DI or PFL) programs?
• What types of payments or benefits received by the employee from the employer are considered wages with DI and PFL benefits?
• How does the integration/coordination process benefit a full-time or part-time employee?
• What information/payment verification should an employee provide to an employer?
• Why does the employer need the DI or PFL benefit information?
• If an employer has decided to integrate/coordinate wages with SDI for his/her employees, or an employer decides to no longer provide wage integration/coordination with DI/PFL benefits, how should the employer notify the EDD?
• If an employer has agreed to a policy of integration/coordination of benefits and has notified EDD, how do the employers respond to the wage questions on the SDI forms?
• Can EDD tell the employer how much SDI is paying his/her employee per week?

Employees/Claimants

What is integration/coordination of SDI, DI, or PFL benefits?
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 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.

How does the integration/coordination process benefit me as a full-time or part-time employee?
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, should visit the SDI FAQs page.

What types of payments or benefits received by the employee, from the employer, are considered wages with DI and PFL benefits?
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).

If your employer has agreed to a policy of integration/coordination of benefits and has notified the EDD, how does an employee respond to the wage questions on the SDI forms?
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)

Can EDD tell the employer how much SDI is paying an employee per week?
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

What is integration/coordination of State Disability Insurance (SDI), Disability Insurance (DI), or Paid Family Leave (PFL) benefits?
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.

How does the law provide for wage integration or coordination with the EDD SDI (DI or PFL) programs?
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.

What types of payments or benefits received by the employee from the employer are considered wages with DI and PFL 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).

How does the integration/coordination process benefit a full-time or part-time employee?
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.

What information/payment verification should an employee provide to an employer?
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.

Why does the employer need the DI or PFL benefit information?
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.

If an employer has decided to integrate/coordinate wages with SDI for his/her employees, or an employer decides to no longer provide wage integration/coordination with DI/PFL benefits, how should the employer notify the EDD?
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.

If an employer has agreed to a policy of integration/coordination of benefits and has notified the EDD, how do the employers respond to the wage questions on the SDI forms?
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)

Can the EDD tell the employer how much SDI is paying his/her employee per week?
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).