1. Implementing Payroll for the United States
  2. California Voluntary Plan Disability Insurance

California Voluntary Plan Disability Insurance

You can provide Voluntary Plan Disability Insurance (VPDI) for California employees who have opted out of the state plan. VPDI plans use the same taxability rules, wage limits, and self-adjustment method as California's State Disability Insurance (SDI) plan.

However, there are some areas you should consider.

  • How to set the VPDI wage plan code

  • How to configure VPDI tax withholding

  • How to change disability plans

  • How to exclude individual employees

Set the VPDI Wage Plan Code

To set the wage plan code:

  1. From My Client Groups, click Workforce Structures.

  2. Click either Manage Legal Entity HCM Information or Manage Legal Reporting Unit HCM Information, depending on which level is implementing the plan.

  3. Select California.

  4. Specify the wage plan code in the appropriate field.

Configure VPDI Tax Withholding

To make VPDI the default tax and set its withholding rate:

  1. To configure this plan at the payroll statutory unit (PSU) level, start the Legal Entity Calculation Cards task from your implementation project.

    Use the Legal Reporting Unit Calculation Cards task to configure it at the tax reporting unit (TRU) level.

  2. In Component Groups, select the California state regional node.

  3. In Calculation Component, select State Disability.

  4. Select Enterable Calculation Values on Calculation Cards.

  5. Click Create.

  6. Search for and select Default Disability Plan as the display value.

    Setting this value on the TRU card would override the value on the payroll statutory unit card.

  7. In Value, select the plan type.

  8. Click Save.

  9. Click Create again.

  10. Search for and select VPDI Employee Rate as the display value.

  11. In Rate, enter your employee rate.

  12. Click Save.

  13. Repeat these steps if you have a VPDI Employer Rate component.

Change Disability Plans

Whether you're implementing a VPDI or reverting to the state plan, you can make this switch only at the beginning of the calendar year. If you change the plan after running the first payroll of the year, you must perform the balance adjustments to move the wages and taxes to the appropriate balances.

To change the wage plan code for your organization:

  1. From My Client Groups, click Workforce Structures.

  2. Click either Manage Legal Entity HCM Information or Manage Legal Reporting Unit HCM Information, depending on which level is implementing the plan.

  3. Select California.

  4. Enter the new wage plan code.

  5. If you're terminating the VPDI and moving back to the state plan, end date the Default Disability Plan value on the card.

Exclude Individual Employees

For employees who opt out of the voluntary plan, enter an override on their tax card so that they use the state plan instead:

  1. On their Tax Withholding card, set Exempt from Voluntary Plan Disability to Yes.

  2. On the California regional node of their Reporting Information card, select the appropriate SDI code in Wage Plan Code.

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