Understanding State-Mandated Disability Benefits: A Guide for Employers
Last Updated on March 25, 2025
Navigating state-mandated disability benefits can be complex for employers. Understanding the available options, eligibility requirements and best practices ensures compliance and effectively supports your workforce. This guide outlines key information to help employers manage disability benefits efficiently and ensure they are remaining compliant with federal and state regulations.
Understanding Your State’s Requirements
State-mandated disability benefits are designed to provide wage replacement for employees who are unable to work due to non-work-related illness or injury. Currently, a handful of states require employers to participate in these programs. This includes California, Hawaii, New Jersey, New York and Rhode Island.
Each state has distinct rules regarding eligibility, benefit duration, and contribution requirements. Employers must understand their state’s specific disability benefits to ensure compliance and avoid potential penalties.
Know the Program Basics
State-mandated disability benefits and programs are typically funded through payroll taxes, which may be shared between employers and employees or covered entirely by employees, depending on the state’s regulations. The duration of benefits varies by state, generally ranging from 6 to 52 weeks, depending on the nature of the employee’s condition.
Benefit amounts are often calculated as a percentage of the employee’s wages. Additionally, many states enforce a brief waiting period, commonly around seven days, before benefits are paid to ensure the claim is valid and aligns with program requirements.
State-Mandated Disability Benefits Chart
*Please scroll to the right to see more columns.
| State | Weekly Benefit Amount | Duration of Benefits | Deductions | Part-Week Benefits | Waiting Period | Un-Interrupted Period of Disability |
|---|---|---|---|---|---|---|
| California | Beginning January 1, 2025, the weekly amount will be 70-90% of wages earned 5-18 months before the claim start date- up to the maximum rate. | Up to 52 Weeks | No Provisions | An individual’s daily benefit amount is calculated by dividing an individual’s weekly benefit amount by seven. | Seven Days | If an individual receives 2 consecutive periods of disability benefits due to the same or a related cause or condition and separated by not more than 60 days, they are considered as one disability benefit period. |
| Hawaii | 58% of the claimant’s average weekly wage, up to a maximum weekly benefit amount annually set by Hawaii’s Disability Compensation Division. | 26 Weeks | No Provisions | The weekly benefit amount multiplied by a factor consisting of a quotient having the number of workdays lost during the portion of the week for the numerator and the number of regular workdays of the employee during a calendar week for the denominator. | Seven consecutive days of any period of disability. | Consecutive periods of disability due to the same or related causes separated by no more than two weeks. |
| New Jersey | 2/3 of claimant’s average weekly wage, subject to a maximum weekly benefit that is set | Twenty-six weeks is the maximum number of weeks allowable for any one period of disability. | Benefits of individuals receiving wages are reduced so combined total does not exceed wages immediately before disability. | Daily benefits for each day in excess of seven in a row at rate of 1/7 of weekly benefit amount. | Seven consecutive days of disability at the beginning of each uninterrupted period of disability; waiting period is compensable after benefits have been paid for three consecutive weeks. | Two consecutive periods of disability due to same or related cause separated by no more than 14 days if individual earned wages from his or her last employer during the 14-day period. |
| New York | 50 percent of claimant’s average weekly wage with a maximum of $170; if average weekly wage is less than $20, benefit equals wage. | No more than 26 weeks in any 52-week period or 26 weeks in any one period of disability. | Benefits reduced by any payment from the employer or a fund to which the employer contributes, except for supplementary benefits paid pursuant to a collective bargaining agreement. | Paid for each day of disability in excess of seven in a row on basis of normal number of workdays per week. | Seven consecutive disability days at the beginning of each uninterrupted period of disability. | Consecutive disability periods caused by the same or related injury or sickness separated by less than three months. |
| Rhode Island | 4.62% of claimant’s highest quarter wages. Individuals with dependent children less than 18 years of age (or with handicapped children over 18) may be entitled to a dependency allowance. The dependency allowance is limited to 5 dependents and is equal to the greater of $10 or 7% of an individual’s benefit rate. | The duration of an individual’s claim is equal to 36% of their total base period wages divided by the individual’s weekly benefit rate (not including a dependency allowance). The most an individual is allowed to collect is an amount equal to 30 full weeks. | No Provisions | Benefits for part-week of disability paid at rate of 1/ 5 of weekly benefit amount for each day work is ordinarily performed. | Seven consecutive disability days. | No Provisions |
Common Employee Questions and Answers
Employees often have questions about their state-mandated disability benefits. Here are some common employee inquiries, and answers employers can give to provide clarity:
1. Am I eligible for state disability benefits? Eligibility typically requires that employees have earned a minimum amount in wages during a specified base period. They must also be unable to work due to a non-work-related condition.
2. How much will I receive in benefits? Benefit amounts vary by state. They are usually calculated as a percentage of your average weekly wage, up to a state-defined maximum.
3. How long can I receive benefits? Duration varies depending on the state. Benefits are often provided for up to 26 weeks, with some states offering extensions for severe conditions.
4. Is there a waiting period before I can collect benefits? Yes, most states require a waiting period of seven to fourteen days before benefits begin.
5. Can I collect disability benefits while working part-time? Some states allow partial benefits if you return to work part-time, but still experience reduced earnings due to your condition.
Final Thoughts on State-Mandated Disability Benefits
Effectively managing disability benefits helps create a supportive workplace while ensuring compliance with state and federal regulations. By staying informed and implementing clear policies, employers can protect their organization and empower employees facing challenging circumstances.
At MyHRConcierge, our team is dedicated to helping remain compliant in navigating the complexities of disability benefits, allowing employers to focus on their core operations while ensuring their workforce receives the support they need. For more information on how MyHRConcierge can be your organization’s trusted partner, contact us today at ccooley@myhrconcierge.com, 855-538-6947 ext. 108. Or, schedule a free consultation: