FAQs – State Employees

The State Disability Insurance (SDI) program was negotiated for employees in Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21.

What is SDI?
SDI pays part of an employee's wages if they are unable to work due to a non work-related illness or injury or due to pregnancy or childbirth. SDI also covers an employee if they take time off to care for a seriously ill child, parent, spouse, or domestic partner, or to bond with a child (i.e., under age 18) within one year of its birth, adoption, or foster care placement. For specific benefit eligibility and payment amount information please refer to About the Program.

Can an employee choose to participate in either SDI or NDI/ENDI?
No. The existing agreement provides for continuing the current NDI program (both the regular and enhanced benefit levels) until the SDI deductions start, and for six months following the initial SDI deduction. After that, the State will discontinue coverage under the NDI program if the employee is in a bargaining unit covered by SDI.

Will the State continue to contribute to the employee’s health, dental, and vision benefits if the employee is unable to work and receive SDI benefits?
If an employee is unable to work (for reasons described above) and is receiving SDI benefits, the State will pay the full premiums for an employee and any applicable dependent coverage for health, dental, and vision benefits during that time The State will recover the employee’s portion of the premiums paid through an accounts receivable.

Who administers the SDI program?
The Employment Development Department (EDD) administers the SDI program; the SCO will calculate and withhold the deductions; and the Department of Personnel Administration (DPA) is responsible for the contract administration.

Can an employee use leave credits while receiving SDI benefits?
The agreement between the State and SEIU allows for the use of 40 hours accrued leave credits per month while receiving SDI benefits. Also, an employee may use accrued vacation, annual leave, CTO, holiday credit, personal leave (PLP), or sick leave balances to cover the benefit waiting-period, per the provisions of the Memorandum of Understanding (MOU).

Is an employee covered for Paid Family Leave (PFL) benefits under SDI?
Yes. PFL, known as Family Temporary Disability Insurance (FTDI), provides benefits to individuals who need to be off work to care for a seriously ill family member, or for the birth, adoption, or foster care placement of a child. FTDI is a component of SDI. This means an employee covered by SDI, is also covered for this PFL benefit.

Where can an employee find additional information about SDI, such as eligibility, benefits amounts, claim filing, etc?
See SDI program.

Employers are mandated by law to provide health benefits for employees while they are on a Family and Medical Leave Act (FMLA) leave. Will the State bill the employees for the employee-paid premium when they return to work from their FMLA leave?
Yes. The employer will pay the employer’s portion of the health benefits premium for up to 26 weeks. The State Controller’s Office (SCO) will set up accounts receivable for the employee’s portion of the health benefits premium to be paid when the employee returns to work.

How will this work if the employee is out on a FMLA leave that runs concurrently with SDI?
As stated above, the employer will pay the employer’s portion of the health benefits premium for up to 26 weeks and the SCO will set up an accounts receivable for the employee’s portion of the health benefits premium to be paid when the employee returns to work. If the employee has not returned to work after the 26 weeks, in order to continue the health benefits, the employee will be required to direct pay the provider for both the employee and employer share of the health benefits premiums.

Will managers and supervisors receive SDI benefits?
No, managerial and supervisory employees will continue to receive the current NDI program (both the regular and enhanced benefit levels).

Please note that these questions and answers are intended to be general in nature, and may not address each individual situation. Specific situations will need to be evaluated on a case-by-case basis and in accordance with the applicable Memorandum of Understanding.

Is SDI taxable? Disability Insurance (DI) vs. Paid Family Leave (PFL)?
Disability Insurance (DI) benefits are not taxable except when considered to be a substitute for unemployment compensation when paid to an individual who is ineligible for unemployment insurance (UI) benefits solely because of the disability. Only in this instance, where DI benefits are received in lieu of UI benefits, will the EDD provide the claimant with a 1099G form showing amounts paid which are reportable (no more than the original UI maximum) and forward a copy of the 1099G to the Internal Revenue Service (IRS).

Paid Family Leave (PFL) benefits are taxable for federal purposes but not state tax purposes. The EDD will provide all claimants with a 1099G form and forward a copy of the 1099G to the federal IRS. The PFL benefits are not taxable/reportable to the California State Franchise Tax Board.

Are SDI deductions pre-taxed (deducted from the paycheck prior to paying federal, state and social security taxes)?
No, SDI deductions are not pre-taxed.

If the employee’s spouse has health benefit coverage and the employee is receiving the cash option under FlexElect, will the employee be allowed to reenroll in the cash option after returning from leave?
Yes, the employee’s FlexElect Cash Option will resume automatically once the employee returns from leave.

Can an employee work and receive SDI?
Yes, an employee working reduced hours or at modified duty due to a disability and who suffers a wage loss may be eligible for benefits.

How will Annual Leave credits be accrued for employees on SDI?
An employee who is receiving SDI benefits will not accrue Annual Leave credits unless he or she works.

Will an SDI deduction be taken from a lump-sum payment that is being transferred to an employee’s 401K plan?
No. Lump sum payments for pay (e.g. vacation, annual leave, CTO) which was earned but not paid for services performed prior to termination of employment, shall not be construed to be wages or compensation for personal services. Therefore, there should be no SDI deduction withheld from lump sum payments. This includes lump sum payments for vacation cash out or lump sum payments for 401K plans.

What happens to a represented employee who has been paying into SDI for quite some time and then they promote/move to a non-SEIU bargaining unit? What happens to their SDI deductions? Are the funds returned to the employee? Is the employee eligible for both NDI and SDI?
The SDI deductions stop. The funds are not returned to the employee. The employee could potentially be eligible for both NDI and SDI as long as the employee has wages in their base period.

Employees may buy back NDI time for retirement purposes. Will employees be able to buy back SDI time?
SDI does not qualify for purchase as retirement service credit.

Are employees in the affected bargaining units who live and work in other states, but are employed by the State of California, covered by State Disability Insurance?
Yes. These employees can file claims and receive benefits, if otherwise eligible, despite residing out of state.

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