The California Employment Development Department (EDD) has released the Voluntary Plan Employee Contribution and Benefit Rates for 2021.
Employers are required to withhold and send state disability contributions to the EDD. The 2021 rates are as follows:
|Employee Contribution Rate||1.2%|
|Taxable Wage Ceiling (per employee per year)||$128,298.00|
|Maximum Contribution (per employee per year)||$1,539.58|
|Maximum Weekly Benefit Amount (WBA)||$1,357.00|
|Maximum Benefit Amount (WBA X 52 weeks)||$70,564.00|
The employee contribution rate is the percentage withheld from the wages of employees who are covered by Disability Insurance (DI) and Paid Family Leave (PFL). The taxable wage ceiling is the maximum yearly wage that is subject to DI and PFL withholding. The maximum contribution is the maximum amount withheld from the yearly wages of an employee who is covered by state disability and who annually earns an amount equal to or exceeding the taxable wage ceiling.
The change in contribution rates and the maximum weekly benefit amount is relevant to employers who must comply with San Francisco’s Paid Parental Leave Ordinance (PPLO). The city of San Francisco requires most employers with 20 or more employees worldwide to supplement PFL benefits received by employees to bond with a new child. During the PFL leave period, the PPLO supplemental compensation provided by an employer, added to the PFL wage replacement benefit received from the EDD, must equal 100% of the employee’s gross weekly wage, subject to a cap. For 2021, the PPLO cap will be $2,262 per week. So, if an employee receives the PFL maximum weekly benefit amount of $1,357, the employer’s PPLO supplemental compensation obligation will be $905 a week.
The EDD also released an updated Overview of California’s Paid Family Leave Program and the required Disability Insurance Provisions brochure based on legislative changes that went into effect on January 1, 2021.
Jackson Lewis continually monitors governmental changes affecting California employers. If you have questions regarding Paid Family Leave, the Paid Parental Leave Ordinance or other wage replacement requirements contact a Jackson Lewis attorney to discuss.