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Employment Development Department
Employment Development Department

Requirements to Become a Voluntary Plan (VP) Employer

An employer must submit a completed Application for Approval of Self-Insured Voluntary Plan of Disability Benefits (DE 2520BV) to the Employment Development Department (EDD).

As referenced by the California Unemployment Insurance Code (CUIC), Section 3254:

In order for a VP to be approved by the EDD all of the following conditions must be met:

Once a VP is approved, the employer is no longer required to send SDI withholdings to the EDD for the employees covered by the VP. Instead, the employer holds the contributions in a separate trust fund to pay Disability Insurance or Paid Family Leave claims and approved expenses. The VP employer pays an assessment to the EDD based on the taxable wages of employees participating in the plan and other factors.

For more information on the VP program, such as types of security deposits, reporting requirements, and disputed coverage claims, reference the Disability Insurance Employer’s Guide to Voluntary Plan Procedures (DE 2040).