In the state of California, for those who are unable to work due to a non-work-related injury or illness, there is a program that will help replace lost wages called the California State Disability Insurance (CASDI) program. Under the CASDI program, eligible workers can continue to earn a portion of their wages when they are incapable of returning to work.
For employers, it is important to understand the CASDI program, what it is, what employees are eligible for this program, and how it is funded. This can help employers assist their employees in navigating the system. Learn more about CASDI below.
What Is CASDI?
If you employ workers in the state of California, CASDI is a program that can benefit your employees during a period of time in which they cannot perform their normal work duties. CASDI stands for California State Disability Insurance and is a state-specific, short-term disability insurance and paid family leave wage replacement program.
Through CASDI, when a worker needs time off — not due to a work-related injury or illness — they may be eligible to receive state-sponsored disability insurance that will help to replace lost wages.
It is important to note that CASDI only provides monetary benefits to workers. It does not protect their job. However, in the state of California, an employee’s job might still be protected based on the Family and Medical Leave Act or the California Family Rights Act.
Who Is Covered by CASDI?
According to the state of California, there are currently more than 18 million workers who are covered by the CASDI program. This partial wage-replacement plan is available to those who cannot work due to non-work-related illness or injury, pregnancy, or childbirth.
Common reasons for an employee being covered by CASDI include the following:
- They are missing work due to caring for a seriously ill family member.
- They are bonding with a new child.
- They are participating in a qualifying event that is due to a family member’s military deployment to a foreign country.
It is important to note that the state of California outlines detailed requirements to ensure eligibility, which are as follows:
- An employee must be unable to do their regular work for at least eight days. CASDI does not kick in until the eighth day.
- An employee must be losing wages due to their disability.
- They must be actively employed or looking for work at the time their disability began.
- An employee must have earned at least $300 from which CASDI deductions were withheld.
- They must be under the care and treatment of a qualifying practitioner.
- They must complete and submit a claim no earlier than nine days after their first day of disability but no later than 49 days after.
- Their qualifying practitioner must complete a portion of their application.
When an employee applies for CASDI benefits, their citizenship or immigration status will not affect their eligibility. Additionally, while their employer will be notified that they have submitted a CASDI claim, all medical information will remain confidential.
How is CASDI funded?
CASDI is a state-run disability insurance program that is funded through deductions. These deductions are taken out of an employee’s paycheck automatically. Currently, every time an employee is paid, 1.1% of their wages will contribute toward the CASDI program.
However, CASDI deductions are only paid on income of up to $145,600 a year. This means that any money earned above this amount is not subject to the 1.1% tax. This creates a limit on the total amount an employee will pay annually toward the CASDI program.
How Much Will an Employee Receive from CASDI?
When an employee applies for CASDI, if they are eligible for benefits, their total weekly pay will be calculated based on the wages they were previously earning. A weekly CASDI benefit is equivalent to around 60% to 70% of wages earned in the 5 to 18 months leading up to the claim start date.
However, for wages to qualify, an employee must have been paying CASDI taxes on those wages. This deduction is usually noted as CASDI on a pay stub.
How Can an Employee Apply for CASDI?
If an employee wants to apply for CASDI, they can use the SDI Online Portal provided by the State of California. To complete their application, they will need to verify their identity and have their qualified practitioner submit documentation regarding their inability to work.
What is the Purpose of CASDI?
The CASDI program is designed to offer wage replacement for California workers who are incapable of performing their normal work resulting in the loss of wages. CASDI, similar to other disability insurance programs, aims to ensure that when someone is incapable of working, they can still meet their basic needs.
For example, if an employee becomes too ill to perform their normal work, in California, CASDI will help make sure that during their illness, they can still pay their bills and afford standard necessities. This is a critical stopgap for those who are facing long periods of time during which they are not capable of earning their regular wages.
How Should I Notify Employees about the CASDI Program?
If you are an employer in the state of California, you can help your employees understand the potential benefits they could receive from CASDI in two key ways:
- Post notices: The state of California offers posters that will provide detailed information about the CASDI program. If you have a physical office or retail location, be sure to place these posters in an area where employees can easily access them.
- Add information to your employee handbook: When designing your employee handbook, include links to the California disability insurance portal. This will allow employees to explore critical information regarding all disability insurance programs.
The CASDI program can help your employees navigate a period of time in which they are incapable of performing their normal job duties. Be sure to check back with the California Employment Development Department for updates to state-specific programs.