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Update Applicable to:

All California employers and multi-state employers with at least 1 worker in California.

What happened?

California Law SB 951 goes into effect on January 1, 2024, eliminating the taxable wage limit on employee wages subject to California’s State Disability Insurance (SDI) withholding rate.

What are the details?

California’s SDI program pays for the state’s paid family leave (PFL) and disability insurance. SB 951 takes effect on January 1, 2024, which eliminates the taxable wage limit on employee wages subject to California’s State Disability Insurance (SDI) withholding rate.

In 2023, the maximum taxable wage base for SDI was $153,164 and the SDI tax rate was 0.9 percent. For 2024, the SDI withholding rate increases to 1.1 percent with no taxable wage limit and maximum withholding for each employee subject to SDI contributions.

Best practices

  • Employers should review the resources provided to adjust to the new requirements and properly comply with the law.

Employers should review additional resources here:

Firm Article

Law Firm Article

SB 951

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's California PEO services can help you navigate complex employment laws and keep your business compliant.

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.


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