Special offer 

Jumpstart your hiring with a $75 credit to sponsor your first job.*

Sponsored Jobs are 2.6x times faster to first hire than non-sponsored jobs.**
  • Attract the talent you’re looking for
  • Get more visibility in search results
  • Appear to more candidates longer

What Is CASDI, or California State Disability Insurance?

If your business operates in the state of California, then your employees may qualify for California State Disability Insurance. Often called SDI or CASDI, this short-term public insurance program is operated by the State of California Employment Development Department (EDD). California SDI tax funds the program. In addition to learning the answer to “what is CASDI?,” it’s important to know who qualifies for the program and what your related responsibilities are as an employer.

Post a Job
Create a Culture of Innovation
Download our free step-by-step guide for encouraging healthy risk-taking
Get the Guide

What is CASDI?

According to the EDD, CASDI provides partial wage-replacement plans to more than 18 million California workers. These short-term disability insurance plans provide nontaxable monetary benefits, but don’t offer additional job protection for workers. The program is intended to support eligible California workers who lose income due to certain non-work-related medical issues.CASDI isn’t the same as workers’ compensation, which provides coverage for work-related injuries and medical conditions.

CASDI provides approximately 60-70% of an employee’s wage, depending on the income they earned during the five to 18 months prior to the claim start date. Benefits may be paid for up to 52 weeks. Eligible employees can file a claim for benefits online or by mail.

How is CASDI funded?

CASDI is funded by the California SDI tax. This tax appears as a deduction on an employee’s pay statement as California State Disability Income Tax; Employee Contribution (CASDI-E). Employers withhold this amount according to the CASDI rate for the given year.

What is CASDI on Form W-2? When employers complete a Wage and Tax Statement or Form W-2 for a worker, they’ll enter the dollar amount withheld for CASDI in Box 14. CASDI is deductible from state and local taxes, so the dollar amount entered in Box 14 will be subtracted from the employee’s gross income.

What is the CASDI rate?

The 2021 withholding rate for SDI tax is 1.2%. The taxable wage limit for an employee is $128,298 every calendar year. The maximum withholding amount for each employee is $1,539.58.

Who is eligible for CASDI?

Employees in California who are unable to work due to pregnancy or a non-work-related illness or injury may qualify for CASDI. Citizenship and immigration status don’t affect an individual’s eligibility. When an employee submits a claim, the EDD will notify their employer but won’t release any confidential medical information. In some cases, a medical examination may need to be performed to confirm initial or continuing CASDI eligibility.

To be eligible for CASDI benefits, a worker must:

  • Be unable to perform regular work for at least eight days.
  • Have lost wages because of a disability, injury or illness.
  • Be employed or actively seeking employment at the onset of their disability.
  • Have earned a minimum of $300 from which SDI tax deductions were withheld during the base period.
  • Be under the care of a licensed physician/medical practitioner or accredited religious practitioner within the first eight days of disability. The date a claim begins may be adjusted if it doesn’t meet this requirement. A worker must remain under a physician/practitioner’s care to maintain their eligibility.
  • Complete and submit the Claim for Disability Insurance (DI) Benefits (DE 2501) no earlier than nine days after their first day of disability begins but no later than 49 days to maintain eligibility.
  • Have their physician/practitioner complete the medical certification portion of the disability claim. A nurse may certify a disability within the scope of practice. A licensed midwife, nurse-midwife or nurse may complete the medical certification for claims related to normal pregnancy or childbirth.
  • If under the care of an accredited religious practitioner, a worker must complete and file the Claim for Disability Insurance Benefits-Religious Practitioner’s Certificate (DE2502)

Employees may be disqualified from CASDI eligibility for any of the following reasons:

  • They claim or receive any Unemployment Insurance or Paid Family Leave (PFL) benefits.
  • Their disability is related to committing a crime that results in a felony conviction.
  • They’re in jail, prison, a recovery home or elsewhere because they were convicted of a crime.
  • They’re receiving workers’ compensation benefits at a weekly rate equal to or greater than the CASDI rate.
  • They fail to have an independent medical examination when requested to do so.

Self-employed individuals, independent contractors and business owners

What is CASDI for those who aren’t employees? Business owners, self-employed individuals and independent contractors aren’t typically eligible for CASDI, but they have the option of getting disability and PFL coverage through the Disability Insurance Elective Coverage program. Individuals can visit the DIEC page to learn more about the program and how to apply.

Employer responsibilities for CASDI

CASDI is funded by withheld employee income, which means that employers aren’t required to make CASDI contributions. In addition to other withheld amounts, employers are responsible for withholding CASDI contributions from their employees’ pay and sending these funds to the EDD.

Employers should provide employees with information about employment laws and regulations and their entitlement to certain workplace standards, working conditions and benefits. Employers can do so by posting the following documents in the workplace:

  • Notice to Employees: Unemployment Insurance/Disability Insurance/Paid Family Leave (DE 1857A) or Notice to Employees (DE 1858)
  • Disability Insurance Provisions (DE 2515)
  • Paid Family Leave Benefits (DE 2511)

Employers can also opt out of CASDI, provided they implement a private plan for disability insurance. This plan must:

  • Provide all benefits offered by CASDI
  • Provide at least one benefit in addition to CASDI benefits
  • Have an equal or lower cost than CASDI
  • Be approved by the majority of employees
Post a Job
Create a Culture of Innovation
Download our free step-by-step guide for encouraging healthy risk-taking
Get the Guide

Ready to get started?

Post a Job

*Indeed provides this information as a courtesy to users of this site. Please note that we are not your recruiting or legal advisor, we are not responsible for the content of your job descriptions, and none of the information provided herein guarantees performance.

Editorial Guidelines