There are a lot of insurances available for employees that they can utilize when they really need it. Employers themselves offer insurance; then there's also the Social Security Disability Insurance which is a federal insurance program managed by the Social Security Administration. Plus, there are companies that offer life or educational insurance plans too. However, there are employees who are lucky enough to be covered by State Disability Insurance (SDI).

SDI is an insurance program administered by the state government that pays benefits every week to employees who have disabilities. State disability insurance is available to those who are not able to work due to the impairment. The injury could either be work-related or not. Those who are working in California, Hawaii, New Jersey, New York, Rhode Island, and the Commonwealth of Puerto Rico are the only ones who can have a SDI.

Here are some details regarding California's SDI:

Who Pays for SDI?

Eligible employees pay SDI through payroll taxes. In order for them to receive the maximum amount of benefits, the employee should pay the premium for a minimum of 18 months.

Who is covered by SDI?

Employees who are eligible for SDI are:

  • those who are unable to work for at least 8 consecutive days because of a disability;

  • people who are looking for work or has a job by the time the disability struck and;

  • employees who earn around $300 in a year before the quarter in which the SDI premiums are deducted.

In California, most workers are covered by SDI. Exceptions are:

  • Interstate Railroad workers

  • Some domestic workers

  • Most of the government employees

  • Some non-profit employees

  • Those who claim religious exemption

SDI Benefits and time of coverage

The amount of payment benefit under SDI is 55 percent of the employee's normal earning for 52 weeks (one year). Other benefits depend on the work history, what the employer can provide, and the benefits the employee availed for.

Pregnant women are eligible for SDI for four weeks before birth and 6 weeks after. They also have the optional additional six weeks of paid family leave.

The period of the insurance depends on how long the disability will last. Usually, medical providers give up to 52 weeks.

The benefit will be available on the eighth consecutive day of disability. The employee has 49 days to claim it. SDI is not tax free; it is deductible on federal returns.