State Mandated Disability Benefits

If you have even one employee in California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico, state mandated disability and family leave benefits may impact you.  Many companies now have employees working at off site locations due to technology, or small worksites in other states and not realize the full impact of their location.

In all of these states, if you have even one employee who works in that state, you are required to cover them under the state mandated disability benefits and also some family leave benefits.   In some states, the employee pays the full cost of the benefits through payroll tax, while in others it is paid by both the employer and employee through payroll tax.  
 
Here is a brief overview of each state.
California’s plan is required for employers with 1 or more employees earning $100 or more in a calendar quarter in California. The employee contribution rate is 0.9% of payroll, with a maximum weekly benefit of $1,173 for 2017.   Paid Family Leave is also required and the cost is included in the 0.9% contribution.  Contributions and benefits are adjusted annually.

Hawaii has a state plan that adjusts benefits and contributions annually.   Hawaii mandate applies to employers with one or more employees working in Hawaii.  The law permits employee contributions of up to half the premium or, if less, 0.5% of the weekly wage base. The 2017 maximum weekly benefit is $594.

New Jersey has an annually adjusted contribution and benefit plan.  Their plan requires coverage if you have 1 New Jersey employee earning $1000 or more annually.   They have had paid family leave since 2009.    The worker contribution rate for TDB (Total Disability Benefit) is 0.24% in 2017, and the 2017 FLI (Family Leave Insurance) contribution rate is 0.1%. The 2017 maximum weekly benefit for each program is $633.

New York requires state disability with one or more employees.  Contribution and benefit rates are set by statute and not adjusted annually. Employee contributions are set at the rate of 0.5% of wages to a maximum of $0.60 per week. The maximum benefit allowance for any disability is $170 a week.

Rhode Island annually adjusts benefits and contribution levels. This applies to employers with one or more employees working in the state of Rhode Island.  For TDI (Temporary Disability Insurance) and Temporary Caregiver Insurance the 2017 employee contribution rate is 1.2%. The current maximum weekly benefit is $817. Family Leave (Temporary Caregiver Insurance) was effective January 1, 2017.

Puerto Rico requires disability coverage if you have one employee working there for one day during the year.  The disability law permits employee contributions at the rate of 0.3% of wages up to $9,000. The maximum weekly benefit is $113 ($55 for agricultural workers).

Do you have options? 
Most states will allow you to offer a voluntary disability benefit that is slightly better than the state mandated benefits to your employees.   More workers are disabled than die and this is a great benefit to offer to all your employees on voluntary or employer paid basis!Mercer PeoplePro Can HelpHave questions about state mandated disability and family leave benefits? Mercer PeoplePro can provide advice and help you with the legwork.  For more information, please contact me at Barbara.Jessen@mercerpeoplepro.com, or set up a FREE two-hour consultation by contacting us at MercerPeoplePro.com — help is only a click away.