Voluntary Plan Security Deposit Requirements
A Voluntary Plan (VP) requires participating employers to post a security deposit with us as part of the approval process. This step is to make sure the employer meets all financial obligations of the VP.
The deposit is used to cover the potential liability of the VP and to reimburse us if the employer fails to pay any assessments.
The minimum deposit amount is determined using the employer’s estimated taxable wages from previous year (PY) multiplied by 0.5 multiplied by the current State Disability Insurance Contribution rate: PY x 0.5 x 1.2% = VP minimum security deposit.
The amount of security deposit over the minimum $1,000 is determined by:
- The number of employees covered.
- The size of the payroll.
- The class of risks.
- The financial standing of the employer.
- Any other relevant factors we determine.
How to Submit the Deposit
The security deposit must be submitted in one of the following forms:
- A company check made payable to the EDD.
- Irrevocable Letter of Credit from a US financial institution.
- Guarantee bond, issued by an admitted surety insurer.
For More Information
Contact the Voluntary Plan Group
- Email: DIBVPSRW@edd.ca.gov
- Call: 1-916-653-6839. For TTY users, dial the California Relay Service at 711
Employment Development Department
Disability Insurance Branch
Voluntary Plan Group, MIC 29VP
PO Box 826880
Sacramento, CA 94280-0001
Last Revised: 07/01/2021