California Employer News and Updates
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California’s Disability Insurance (DI) has been around since 1946. One of two components of the State Disability Insurance (SDI) program—which also includes Paid Family Leave (PFL)—good ole DI doesn’t get the same amount of ink as PFL, but the benefit is just as important for California workers as its more talked about counterpart.
DI provides partial-wage replacement benefits to eligible California workers who can’t work because of a non-work-related illness or injury. It also covers elective surgery, pregnancy, childbirth, and other related medical conditions. Like PFL, it pays 60 to 70 percent of wages earned 5 to 18 months prior to the claim start date and, since it is part of the SDI umbrella, is paid for by California workers through mandatory payroll deductions. A few key differences between DI and PFL:
- DI benefits can be paid for a maximum of 52 weeks as opposed to PFL, which caps at 8 weeks.
- Eligible workers must serve a seven-day unpaid waiting period before receiving DI benefits; there is no waiting period for PFL.
- DI benefits are not taxable unless they are taken in lieu of Unemployment Insurance; PFL benefits are taxable.
For more information about DI, including how to apply and frequently asked questions, go to Disability Insurance. The EDD website, informational brochures, and fact sheets are available in English, Spanish, and other languages. You may also sign up for a free webinar to learn about the SDI program by sending an email to DIBOUTREACH@edd.ca.gov.
You will receive your Notice of Contribution Rates and Statement of Unemployment Insurance (UI) Reserve Account (DE 2088) for the period of January 1, 2023, to December 31, 2023, by December 30, 2022. Carefully review all items on the DE 2088 as it informs you of your 2023 UI contribution rate, whether you are subject to Employment Training Tax (ETT), and all UI reserve account activity. For more information about the DE 2088 and your protest rights, see the reverse side of your DE 2088. You can also refer to the Explanation of the Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088C) or contact the Employment Development Department (EDD) at 1-888-745-3886. For 2023, the UI taxable wage limit and the ETT taxable wage limit is $7,000 per employee. The ETT rate will remain at 0.1 percent (.001).
The SDI withholding rate for 2023 is 0.9 percent. The taxable wage limit is $153,164 for each employee per calendar year. The maximum to withhold for each employee is $1,378.48. New and updated DE 2088 notices issued to employers after May 6, 2022 no longer display the State Disability Insurance (SDI) rate and taxable wage limit. Instead, the DE 2088 includes an EDD website link where employers can find the SDI information. Visit Tax-Rated Employers for more rate information.
The Quarterly Contribution and Wage Adjustment Form (DE 9ADJ) is used to request corrections to a previously reported Quarterly Contribution Return and Report of Wages (DE 9) and Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C). The Voluntary Plan for Disability Insurance Quarterly Adjustment Form (DE 938) is used to request corrections to a previously reported Quarterly Contribution Return (DE 3D), and DE 9C. Revisions to the paper versions of the DE 9ADJ and DE 938 were undertaken with enhanced user experience in mind to make form completion faster, easier, and simpler. The updated forms resulted in a reduction of the number of entries required to report name and social security number corrections. The Instructions for Completing the Quarterly Contribution and Wage Adjustment Form (DE 9ADJ-I), and the Instructions for Completing the Voluntary Plan for Disability Insurance Quarterly Adjustment Form (DE 938-I) have been updated too.
You can also submit your quarterly adjustments electronically through the e-Services for Business website, which is a fast, easy, and secure way to manage your employer payroll tax account online. For instructions on adjusting previously filed returns, you may refer to the e-Services for Business User Guide (DE 160) or visit the e-Services for Business FAQs.
Whether your workplace is functioning via a telework, in-office, or hybrid schedule, employers are still required by law to ensure that employees are aware of their State Disability Insurance (SDI) benefits.
The SDI program is comprised of Disability Insurance (DI) and Paid Family Leave (PFL). DI provides benefits to eligible employees who need to take time off work due to a non-work related illness or injury, pregnancy, or childbirth. Similarly, PFL provides benefits to eligible workers who need time off work to care for a seriously ill family member, to bond with a new child, or to participate in a qualifying event because of a family member’s military deployment to a foreign country.
Employers are required to post and/or provide the Notice to Employees: Unemployment Insurance/Disability Insurance/Paid Family Leave (DE 1857A) or the Notice to Employees (DE 1858) posters. Employers must also provide the Disability Insurance Provisions (DE 2515) and the Paid Family Leave (DE 2511) brochures to new hires or employees who may need to file a claim. The EDD provides convenient ways for employers to obtain the posters and brochures at no cost:
- Order them using the Online Forms and Publications page or by calling the EDD’s toll-free numbers
- Download and print them by going to DI Forms and Publications and PFL Forms and Publications
For more information on employer responsibilities regarding SDI, including employee contribution rates, go to Employer Requirements. You may also sign up for a free, no-cost webinar by sending an email to DIBOUTREACH@edd.ca.gov.