What’s New with California State Disability Insurance (SDI) and Paid Family Leave (PFL) in 2025?

California is taking significant steps to improve financial support for workers who need to take time off due to illness, injury, or family obligations. Starting in 2025, State Disability Insurance (SDI) and Paid Family Leave (PFL) benefits will see major increases.

These changes are part of a broader effort to provide more robust financial protection for workers, particularly those with lower wages. If you provide unpaid care to a loved one, here’s what you need to know about the upcoming updates: let’s dive in.

Increased Benefit Amounts for SDI and PFL

The most notable change is an increase in the percentage of wages that will be eligible for substitution/replacement by SDI and PFL.

Starting January 1, 2025, employees filing for SDI or PFL will receive a weekly benefit of between 70% and 90% of their wages capped at 63% of the state average weekly wage (AWW)*.

This is a huge percentage increase from the previous rates of 60%- 70%. The increase is designed to offer better/more adequate financial relief to workers who find themselves unable to work due to non-work-related illnesses, injuries, pregnancy, or family caregiving needs.

In California, here’s what you should expect:

For lower-wage earners (those who make 70% or less of the state’s average quarterly wage), the benefit will cover up to 90% of their wages during the eligibility period.
Higher-wage earners (those earning more than 70% of the state average) will continue to receive a reimbursement of up to 63% of the AWW.

Note: The AWW* average weekly wage for 2025 increases to $1,681 per week, up from $1,620 in 2023–2024.

This increase in benefits is a crucial step toward making sure that workers, especially those with lower earnings, don’t face financial hardship when taking time off to care for their loved ones.

Timeline for Claim Processing and Filing

As part of the new legislation, SB-1090, employees will have more flexibility when it comes to filing their claims.

Workers can now file for SDI or PFL benefits up to 30 days in advance of their expected first day of leave. Once a claim is submitted, the California Employment Development Department (EDD) will have whichever comes later – 14 days from receipt of the claim or the date the SDI or PFL claim begins to begin payment.

This new legislation not only offers higher compensation but also provides faster processing times, ensuring that workers receive their benefits more quickly and efficiently.

A History of Benefit Increases

California’s SDI and PFL programs have evolved significantly over the years – usually for the better. The state is historically one of the better ones for listening and learning to take better care of family caregivers – an effort advocacy groups like CRC proudly join.

In 2018, the state temporarily increased the benefit amounts to 60% and 70% of the average weekly wage (AWW), depending on the worker’s earnings. These increases were extended multiple times, including through SB-951, which extended the 60%-70% benefits through the end of 2024.

The most recent change, SB-1090, solidifies the permanent increase to 70%-90% of wages for claims starting in 2025. It also shortens the amount of time the California Employment Development Department (EDD) has to pay out claims and allows claims to be applied for earlier.

This change marks a big win for workers, especially those with lower incomes, who are expected to benefit the most from these increases.

What About High Earners?

A major change that took effect in 2024 is the elimination of the SDI contribution wage cap. Prior to this change, workers only paid SDI taxes on earnings up to a certain threshold (most recently, the cap was $153,164). With the cap gone, all wages earned are now subject to the SDI tax.

For example:

In 2025, an employee earning $800,000 will pay the SDI payroll tax of 1.2%, resulting in an SDI annual contribution of $9,600.
In contrast, under the previous system, the same employee would have had an SDI tax cap of just $1,378 in 2023 because the tax no longer applied to wages earned beyond the cap of $153,164.

This change means higher contributions from high earners, but it also helps sustain and expand the benefits provided by the SDI and PFL programs.

Additional Benefits for Lower Wage Earners

The most significant beneficiaries of these changes will be lower-wage earners.

Workers earning less than 70% of the state average quarterly wage will receive a benefit of up to 90% of AWW as a benefit, which is a substantial increase over the previous rates. This change is especially important and impactful as it helps provide greater financial security to California’s working class when they face unexpected medical or family care needs.

What Else Is Changing?

While California is making major strides with its SDI and PFL programs, other states are also enhancing their paid leave offerings.

For instance:

Delaware will start collecting payroll taxes for paid leave in 2025, with leaves beginning in 2026. Learn more here about Delaware Paid Leave.
Maine and Maryland will also be rolling out new paid family and medical leave programs, with payroll tax deductions starting in 2025, though Maryland’s is based on a delay from a program that has been expected to begin in 2023.

California’s efforts are part of a larger trend of expanding paid leave benefits across the U.S., though California’s improvements stand out due to their scope and impact.

Closing Thoughts: Paid Family Leave Changes to Watch in 2025

The changes coming in 2025 to California’s SDI and PFL programs are a big win for workers, particularly those who need the most support.

With higher benefit amounts, faster claim processing, and an expanded safety net for lower-income employees, these updates are a great additional step in economic security for workers facing health issues or family caregiving responsibilities.

While high earners will see higher payroll tax deductions, the overall effect will be a more inclusive system that better supports California’s workforce across the board.

If you’re a California worker, make sure to stay informed about how these changes will affect you in 2025, and be sure to check the California Employment Development Department website for the latest details on filing claims and benefit amounts, or get in contact with us here at CRC for additional support and resources.

The California Caregiver Resource Center is a 501c(3) nonprofit network of 11 Centers covering the entire state of California here to help connect you with medical resources and support in this journey. To get more information about the resources we have available to you as a California caregiver, contact us at the California Caregiver Resource Center nearest to you or join CareNav for free today.