California State Disability (EDD) Benefits and How They Interact with Workers’ Compensation (2025 Guide)
When you’re hurt and unable to work, understanding the difference between State Disability Insurance (SDI) and Workers’ Compensation Total Temporary Disability (TTD) can make a big difference in your finances. Both programs replace lost wages, but they apply in different situations—and you can’t collect both for the same period.
When You Qualify for State Disability (EDD)
You may qualify for State Disability Insurance (SDI) benefits from the Employment Development Department (EDD) if:
You can’t perform your regular job duties for at least eight consecutive days
You’ve lost wages because of your disability
Your doctor certifies your inability to work using the DE 2501 form
If approved, EDD will pay you about two-thirds of your average weekly wages based on the earnings information they have on file. It is not always accurate and not the same computation that is utilized in the Workers’ Comp arena. Sometimes it is higher and sometimes it is lower.
How EDD Interacts with Workers’ Compensation
The key question is how these two systems overlap.
If Your Workers’ Compensation Case Is Denied
EDD is often a lifeline for denied cases. Whether your workers’ comp claim is accepted or denied has no impact on your eligibility for EDD.
If your treating doctor certifies that you’re unable to work, EDD can pay you disability benefits even while your workers’ comp case is being litigated. (You do not have to have a work injury to get EDD or even a case filed_
Later, if your workers’ comp case is eventually accepted, the insurance company down the road will need to litigate and reimburse EDD for monies spent on your case.
If Your Case Is Admitted
If your claim is accepted and you’re already receiving temporary disability benefits (TD) from the workers’ comp insurance company, you cannot collect EDD at the same time.
If you do, EDD will be reimbursed from your final settlement under the criteria in Labor Code §4904.
EDD can only recover when:
They paid benefits when you were TTD; or
They paid benefits when you were entitled to permanent disability advances.
The recoveries are based upon the rate of your TTD rate in Work Comp Court or Permanent Disability Rate.
Settling Cases with EDD Involvement
Judges typically won’t approve a Compromise & Release (C&R) settlement if EDD benefits haven’t been addressed.
Usually, the defense attorney and EDD work out a lien resolution, or the insurance company agrees to “hold you harmless” from repayment. Sometimes the lien amount can be negotiated down before settlement approval. On denied cases that never get admitted, the defense will argue that the same bars to your case being admitted.
Why EDD Benefits Matter
State Disability benefits can be crucial when your claim is delayed or denied. They keep you financially stable while your case is being fought.
Many injured workers rely on EDD while their attorney pushes to have the case accepted and medical treatment authorized.
If you have questions about how State Disability and Workers’ Compensation interact—or if you’re unsure whether to file for EDD—our team at Lee Partners Law: Work Injury Attorneys can help.
We handle denied and delayed cases across California and can coordinate with EDD to protect your benefits and ensure you aren’t left owing money.
Contact - David A Lee, Esq. FOR A FREE CONSULT TODAY AT 310-295-0822.