Beginning January, workers in California who need to take care of a newborn or a sick relative will find some financial relief as the state increases leave payments. This policy is in response to recent legislation aimed at bridging the gap among employees who could not afford to take leave, particularly those earning lower wages. Research by California Budget & Policy Center established that paid family leave was more frequently utilized by workers with an income ranging from $80,000 to $100,000 in contrast with those earning less than $20,000.

Workforce earning a lower wage refrained from taking time off due to health concerns or for familial responsibilities since they could not afford to lose a significant portion of their income. To address this, the recent legislation mandates that workers can have up to 90% of their income reimbursed, up from the previous 60%, through the State Disability Insurance (SDI) scheme, if they earn lower than or equal to $60,000 annually. Workers with higher wages are going to have their reimbursement increased to 70%. Considering the median annual wage in California is about $54,030, most workers are eligible to receive the maximum reimbursement rate.

SDI is financed through workers, who currently contribute 1.1% of their salaries. On pay stubs, this can be referred to as “CASDI or “CA Disability Employee . In the past, there was an upper threshold each year for the amount highly paid workers contribute to the fund, but this has now been removed, necessitating all employees to make contributions proportional to their salary regardless.

The date of applying for this leave plays a crucial role in determining the percentage of income that can be claimed. Applying in 2024 will yield 60% of the income, even if the leave is extended into 2025. As an exception, non-birthing parents who have children in 2024 can postpone their paid family leave until 2025 and still get the higher percentage reimbursement.

If you need further information or help regarding the new changes to the State Disability Insurance program, you can contact the SDI through eddcaller.com which provides a comprehensive guide on how to get a hold of the SDI.