In plain words
Most employees in California pay into (SDI) through payroll. Self-employed people usually do not, because no employer withholds the tax. Elective coverage lets a self-employed person choose to join SDI, and with it (PFL). The worker applies through the and agrees to pay contributions for a set period. Once coverage is in place, a claim can be filed, but a applies before benefits can be paid. EDD sets the length of that wait. Elective coverage is different from employer-based coverage, and the two are often confused.
The deeper version
Elective coverage is a provision of the California Unemployment Insurance Code under which self-employed individuals, and certain others not covered by mandatory SDI, may elect into the SDI program, which funds PFL as well. Election requires an application and payment of contributions on elected earnings for a required period before benefit eligibility, and the statute sets a waiting period between enrollment and the first claim. The design reflects a concern about adverse selection, since people expecting a claim could opt in just before one. Whether the waiting period deters enrollment is a policy question with limited direct measurement.
Where it comes up
- Paid Family Leave (PFL) for bondingCalifornia: Leave, Money, and Paperwork
- Pregnancy and parental leave in California: the mapCalifornia: Leave, Money, and Paperwork
- Pregnancy Disability Leave (PDL) and State Disability (SDI)California: Leave, Money, and Paperwork
What mothers here say about elective coverage
No one has posted under this term yet.
Sources
- California Employment Development Department — Self-employed elective coverage for SDI and PFL
- State of California — California Unemployment Insurance Code, provisions on elective coverage