As we say good-bye to 2016 and enter the New Year, it's important to be familiar with the new updates being made to state disability insurance and paid family leave programs.
State Disability Insurance
Five states – California, Hawaii, New Jersey, New York, and Rhode Island – and the territory of Puerto Rico, provide benefits to employees who are temporarily disabled by an injury or illness that is not job-related through a tax-supported state fund.
The state disability insurance (SDI) fund operates in much the same way as state unemployment insurance systems and under similar rules regarding coverage, taxable wages, exemptions, benefit eligibility, etc. Employers may be required to pay a payroll tax similar to unemployment contributions, and must withhold and pay a percentage of their employees’ wages.
States With Paid Family Leave
Three of these states also have existing paid family leave (PFL) programs:
- California's PFL program extends disability compensation to employees who take time off from work to care for a seriously ill child, spouse, parent, or domestic partner, or for the birth, adoption, or foster care placement of a child. PFL benefits are funded entirely by employees through increased contributions to the state disability insurance fund.
- New Jersey's Family Leave Insurance (FLI) program allows employees to take paid leave to care for sick family members, newborns, and newly adopted children, and is funded by employee contributions to the temporary disability insurance fund.
- Rhode Island’s Temporary Caregiver Insurance (TCI) program allows employees to take paid leave to care for a seriously ill child, spouse, domestic partner, parent-in-law, or grandparent, or to bond with a new child. The TCI program is financed through employees’ Temporary Disability Insurance contributions.
New York also recently enacted a PFL program. It will take effect January 1, 2018. The program will be funded through employee payroll deductions. Beginning June 1, 2017, and annually thereafter, the Superintendent of Financial Services will set the maximum employee contribution for the following year. The contribution will be made through payroll deductions. No employer contributions will be required.
Check out PayState Update Issue No. 24 for a chart detailing the 2017 SDI employer contributions, employee contributions (including PFL surcharges), and wage bases.