California Unemployment Insurance Code 821 - 1224

back to top

821.  (a) Each school employer may, in lieu of the contributions
required of employers, elect to pay into the Unemployment Fund the
cost of benefits, including extended duration benefits and
federal-state extended benefits, paid based on base period wages with
respect to employment for an employing unit and charged to its
account in the manner provided by Section 1026, pursuant to
authorized regulations that shall prescribe the rate or amount, time,
manner, and method of payment or advance payment or providing a good
and sufficient bond to guarantee payment of contributions. The
provisions of this article shall apply to school employers who have
elected financing under this section.
   (b) Sections 1030, 1031, 1032, and 1032.5, and any provision of
this division for the noncharging of benefits to the account of an
employer, shall not apply to an employing unit under subdivision (a).
The cost of benefits charged to a school employer under this section
shall include, but not be limited to, benefits or payments
improperly paid in excess of a weekly benefit amount, or in excess of
a maximum benefit amount, or otherwise in excess of the amount that
should have been paid, due to any computational or other error of any
type by the Employment Development Department or the Department of
Benefit Payments, whether or not the error could be anticipated.
   (c) The cost of benefits charged to a school employer under this
section shall include credits of benefit overpayments actually
collected by the department, unless the department determines that
the payment was made because the school employer, or an agent of the
school employer, was at fault for failing to respond timely or
adequately to requests of the department for information relating to
the individual claim for unemployment compensation benefits. The
department shall make this determination when the school employer or
agent fails to respond timely or adequately in two instances relating
to the individual claim for unemployment compensation benefits. This
subdivision shall apply to benefit overpayments established on or
after October 22, 2013.
   (d) In making the payments prescribed by subdivision (a), there
shall be paid or credited to the Unemployment Fund, either in advance
or by way of reimbursement, as may be determined by the director,
any sums he or she estimates the Unemployment Fund will be entitled
to receive from each employing unit for each calendar quarter,
reduced or increased by any sum by which he or she finds that his or
her estimates for any prior calendar quarter were greater or less
than the amounts that should have been paid to the fund. These
estimates may be made upon the basis of a statistical sampling, or
other method as may be determined by the director.
   Upon making the determination, the director shall mail notice of
the determination, pursuant to Section 1206, to the employing unit.
   The director may cancel any contributions or portion thereof that
he or she finds have been erroneously determined. The contributions
due from the employing units shall be paid, transferred, or credited
from the School Employees Fund established in the State Treasury by
Section 822 to the Unemployment Fund by the State Treasurer, State
Controller, or other officer or person responsible for disbursements
on behalf of the employing unit within 30 days of the date of mailing
of the director's notice of determination to the employing unit.
   Each employing unit shall send a copy of any and all notices,
billings, or correspondence not normally routed to the administrator
and the Superintendent of Public Instruction, regarding unemployment
insurance for the school employees, to the administrator, the
Superintendent of Public Instruction, and the county superintendent
of schools, or agent thereof, with timely documentation of charges or
determination. Article 8 (commencing with Section 1126) of Chapter 4
with respect to the assessment of contributions, and Chapter 7
(commencing with Section 1701) with respect to the collection of
contributions, shall apply to the assessments provided by this
article. Sections 1177 to 1184, inclusive, relating to refunds and
overpayments, shall apply to amounts paid to the Unemployment Fund
pursuant to this section. Sections 1222, 1223, 1224, 1241, and 1242
shall apply to matters arising under this section.
   (e) Notwithstanding any other provision of this section, no
employing unit shall be liable for that portion of any extended
duration benefits or federal-state extended benefits that is
reimbursed or reimbursable by the federal government to the state.
   (f) To the extent permitted by federal law, including Section 121
(e) of Public Law 94-566, any school employer that elects a method of
financing under this article shall not be liable to reimburse the
cost of benefits paid to any individual whose base period wages
include wages for services performed prior to January 1, 1978, if the
benefits are reimbursable by the federal government under Section
121 of Public Law 94-566 and to the extent that the individual would
not have been eligible for the benefits had this state not provided
for benefits payable based on services performed prior to January 1,
1978.
   (g) The administrator and the Superintendent of Public Instruction
shall adopt rules and regulations for the administration of their
respective functions under this article in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. Regulations of the administrator shall be
subject to Article 1 (commencing with Section 301) of Chapter 2 of
Part 1 of Division 1. Rules and regulations of the Superintendent of
Public Instruction shall not be subject to the provisions of Article
1 (commencing with Section 301) of Chapter 2 of Part 1 of Division 1.
   (h) Any election for financing coverage under this section shall
take effect with respect to services performed from and after the
first day of the calendar quarter in which the election is filed with
the director, and shall continue in effect for not less than two
full calendar years. Thereafter, the election under this section may
be terminated as of January 1 of any calendar year only if the school
employer, on or before the 31st day of January of that year, has
filed with the director a written application for termination. The
director may for good cause waive the requirement that a written
application for termination shall be filed on or before the 31st day
of January. School employers shall be prohibited from making a
subsequent reelection under this section for 10 years from the date
of termination of an election under this section. An election for
financing coverage under this section is deemed to have been filed by
every school employer effective as of January 1, 1976, is deemed to
have been in effect for two calendar years prior to January 1, 1978,
and may be terminated as of January 1, 1978, or as of January 1,
1980, or any later January 1 pursuant to this section. Upon the
termination of any election under this section, the school employer
shall be and remain liable for all benefits paid based upon wages
paid by the school employer during the period of an election under
this section.



821.3.  As used in this article, "administrator" means the Director
of Employment Development.



821.4.  As used in this article, "employing unit" and "school
employer" means the governing board of any school district or
community college district, any county board of education, any county
superintendent of schools, or any personnel commission of a school
district or community college district which has a merit system
pursuant to any provision of the Education Code, or any
instrumentality of the foregoing, or any instrumentality of more than
one of the foregoing, which employs one or more employees.



821.5.  The provisions of Article 3 (commencing with Section 1326)
of Chapter 5 of this part relating to filing, determination, and
payments of unemployment compensation benefit claims, and all other
provisions of this part not inconsistent with this article, shall
apply to all claims and matters arising under this article.




822.  (a) There is hereby established in the State Treasury the
"School Employees Fund." The School Employees Fund is the successor
of the "Classified School Employees Fund." Moneys received pursuant
to Section 823, together with any charges, notices, fees, interest,
penalties, assessments, or other revenue, shall be deposited in this
fund. All moneys in the fund are hereby appropriated to the
administrator without regard to fiscal year for carrying out the
purposes of this article, for administrative costs, for making
refunds, and for investment through the Surplus Money Investment
Fund, with any interest or earnings credited to the School Employees
Fund. Funds to be used for administrative costs shall be budgeted and
expended in accordance with existing state law.
   (b) Notwithstanding any other law, the Controller may use the
moneys in the School Employees Fund for loans to the General Fund as
provided in Sections 16310 and 16381 of the Government Code. However,
interest shall be paid on all moneys loaned to the General Fund from
the School Employees Fund. Interest payable shall be computed at a
rate determined by the Pooled Money Investment Board to be the
current earning rate of the fund from which loaned. This subdivision
does not authorize any transfer that will interfere with the carrying
out of the object for which the School Employees Fund was created.




823.  (a) For the purpose of payment by each school employer of all
or part of the charges for unemployment compensation benefits, fees,
assessments, interest, penalties, billings, notices, and other
expenses of unemployment insurance for school employees pursuant to
this part, moneys budgeted pursuant to subdivisions (b) and (c) of
this section shall be remitted by the school employer or on the
school employer's behalf by the county auditor to the Treasurer
pursuant to this article, and shall be deposited in the School
Employees Fund.
   (b) (1) For each fiscal year, except as provided in subdivisions
(c) and (d), each school employer shall budget and remit on or before
the last day of the calendar month following the close of each
calendar quarter to the Treasurer for deposit in the School Employees
Fund in the State Treasury an amount determined by multiplying the
contribution rate for the fiscal year by the total wages, including
taxable wages as well as wages which would be taxable except for the
limitation on taxable wages provided under Section 930, but
excluding, to the extent permitted by federal law, wages paid to any
individual to the extent that federal law provides for reimbursement
to the State of California for all benefits paid from the
Unemployment Fund to the individual based on the wages.
   The administrator shall, not later than March 31 each year, notify
all school employers participating in the School Employees Fund of
the contribution rate for the succeeding fiscal year.
   (2) The contribution rate for the fiscal year beginning July 1,
1988, and for each subsequent fiscal year shall be two times the
amount disbursed for claims management fees, unemployment insurance
benefit charges, and School Employees Fund administrative
expenditures from the School Employees Fund during the 12-month
period ending December 31 and immediately preceding the fiscal year
for which the rate is to be effective, less the amount in the School
Employees Fund on that December 31, with the resulting figure divided
by total wages as described in paragraph (1) for the 12-month period
ending June 30 and immediately preceding that December 31, and then
rounded to the nearest one-hundredth of 1 percent. In no event shall
the contribution rate be less than five one-hundredths of 1 percent.
   (c) If the administrator finds that the ability of the School
Employees Fund to meet its estimated obligations promptly when due
will become endangered, he or she shall increase the contribution
rate otherwise provided by this section to a level estimated to be
needed to protect the solvency of the fund, except that the rate
shall not be increased to more than three-tenths of 1 percent. If the
administrator finds that the School Employees Fund balance is in
excess of an adequate reserve to meet its estimated obligations
promptly when due, he or she shall, after consultation with the fund'
s School Advisory Committee, decrease the contribution rate otherwise
provided by this section, except that the rate shall not be
decreased to less than one-tenth of 1 percent. The administrator
shall notify all school employers participating in the fund of any
increased or decreased contribution rate under this authority.



826.  The administrator of the School Employees Fund shall, based on
the total number of covered employees reflected on reports received
by March 31, 1978, and by November 30, 1978, and each year thereafter
by November 30, make a transfer from available interest earnings
pursuant to investments authorized by Section 822 to the
Superintendent of Public Instruction or Chancellor of the California
Community Colleges to support an Unemployment Insurance Management
System and appeals program as set forth in Section 1330 of the
Education Code. Such transfers shall be equal to two dollars ($2) per
covered employee, less administrative costs of the Superintendent of
Public Instruction and the Chancellor of the California Community
Colleges, and shall be made by April 30, 1978, and by December 31,
1978, and each year thereafter by December 31, to the Superintendent
of Public Instruction or Chancellor of the California Community
Colleges, as appropriate, and expended only for the purposes set
forth in Section 1330 of the Education Code.




827.  Whenever the unencumbered balance of interest deposited in or
earned by the School Employees Fund, after deducting administrative
expenses paid or encumbered, exceeds two million dollars ($2,000,000)
as of the close of each fiscal year, the unencumbered balance shall
be credited as of the close of that fiscal year to the account of
each school employer which has a positive balance in the fund, in the
proportion that each positive account balance bears to the total of
all positive account balances.



828.  Each school employer shall be responsible for a quarterly
local experience charge as set forth below, together with the charges
or penalties set by the administrator for administrative
indiscretions, including tardiness and error, as well as all costs
for benefits and administration resulting from failure to properly
cover an employee. The reimbursement for charges shall be delinquent
30 days from the date of notice and if not paid within the time
required, the school employer shall pay a penalty of 10 percent of
the unpaid amount, plus interest at the adjusted annual rate
established pursuant to Section 19521 of the Revenue and Taxation
Code from and after the date of delinquency until paid. The local
experience charge to be levied against each school employer shall be
computed as follows:
                              Local Experience Charge
   (a) The local experience charge rate shall be 10 percent for the
first three complete fiscal years of participation in the School
Employees Fund.
   (b) The local experience charge rate for the fourth fiscal year,
and each succeeding fiscal year, shall be determined by dividing the
reserve balance at the end of the fiscal year which began 24 months
prior to the fiscal year for which the rate is being calculated by
the benefits paid for that same prior fiscal year.
   The factor derived is the employer's reserve ratio. If, as of the
computation date, the school employer's reserve ratio equals or
exceeds that which appears on any line in column 1 of the following
table, but is less than that which appears in column 2 of that table,
the local experience charge rate shall be the figure appearing on
that same line in column 3 of that table.

        (Column 1)         (Column 2)     (Column 3)
  Line                   Reserve Ratio       Rate
  1 ..... negative  to        1.00            15%
  2 ......... 1.00  to        2.00            10%
  3 ......... 2.00  to        3.00            5%
  4 ......... 3.00  or        more            0%

   (c) The rate determined in subdivision (a) or (b) shall be
multiplied by the employer's quarterly benefit charges to compute the
local experience charges.
   The administrator shall, not later than March 31 of each year,
notify each school employer participating in the School Employees
Fund of their local experience charge rate for the succeeding fiscal
year.



829.  The total amount of the local experience charge computed for
each school employer pursuant to Section 828 shall be the amount that
the school employer, county superintendent of schools, or empowered
entity shall, on behalf of the employers under that jurisdiction,
reimburse the School Employees Fund in the State Treasury. However,
this amount shall not exceed 1.7 percent of the actual annual wages
paid by a school employer in the immediately preceding calendar year
as indicated in the four quarterly reports to the department.



831.  There is hereby created a School Employer Advisory Committee
of five persons. The committee shall consist of one person appointed
by each of the following: the State Superintendent of Public
Instruction, Chancellor of the California Community Colleges,
Association of School Administrators, California School Business
Officials, and the California School Board Association.
   All such members shall serve at the pleasure of the appointing
power and their only compensation shall be per diem expenses for
attending meetings, which shall be a cost of administration of the
School Employees Fund. The advisory committee shall select a
chairperson and meet at least semiannually with the administrator to
consider and recommend improvements concerning the administration of
this article.


832.  The administrator shall at least annually calculate, as of the
close of and for the immediately preceding fiscal year, the
experiences of school employers relative to usage of the Unemployment
Fund. The calculations shall include tabulations on the experience
of each school employer in relation to the expenditures from and the
income to the School Employees Fund from the wages paid by the
employer. All school employers shall be listed and ranked by ratio of
use. The report shall contain comments and recommendations on
improvements to the administration, enforcement, and financing of the
provisions relative to this article. The report by the administrator
on the above shall be made each year to the affected school employer
and governing board thereof prior to March 31.
   The administrator shall develop experience relationships on all
benefits paid to employees via the School Employees Fund and on
school employers' experience related to use and exposure. Data shall
relate to numbers of employees and types of programs and shall be
calculated as of the close of and for the immediately preceding
fiscal year. A report by the administrator on the above shall be made
each year to the Legislature prior to March 31 containing comments
and recommendations on improvement to administration, enforcement and
financing of the provisions relative thereto.

back to top

901.  The definitions set forth in this article are applicable to
this chapter only.



902.  "Computation date" means the close of business on June 30th,
of each calendar year for the purpose of establishing contribution
rates for the next succeeding calendar year.



903.  "Rating period" means the full calendar year next succeeding
any computation date.



904.  "Net balance of reserve" means the excess, if any, of credits
required to be made to any employer's account over the charges
against that account as of any computation date.



905.  "Average base pay roll" means the quotient obtained by
dividing by three the total amount of taxable wages paid by an
employer during the most recent period of three consecutive calendar
years immediately preceding the computation date.




906.  "Contributions paid on his own behalf" means:
   (a) All contributions paid under this part to the Unemployment
Fund on behalf of an employer with respect to wages paid by him on or
before the computation date for any rating period, which have been
paid on or before the end of the calendar month next succeeding such
computation date.
   (b) Any additional amount of contributions paid under this part to
the Unemployment Fund on behalf of an employer with respect to wages
paid by him on or before the computation date for any rating period,
which have been assessed pursuant to Section 1036 and have been paid
before the delinquent date for the calendar quarter in which he is
given notice of the assessment pursuant to Section 1036.
   (c) Any additional contributions paid pursuant to Section 976.5.

back to top

926.  Except as otherwise provided in this article "wages" means all
remuneration payable to an employee for personal services, whether
by private agreement or consent or by force of statute, including
commissions and bonuses, and the reasonable cash value of all
remuneration payable to an employee in any medium other than cash.




926.5.  "Wages" also means all remuneration payable for personal
services, as specified in Section 926, when the legal obligation for
the payment of such wages is assumed by an employer specified in
Section 678, and the first or prior employer for whom the personal
services were originally performed is relieved of the legal
obligation for the payment of such remuneration.



927.  "Wages" also means all tips which are received while
performing services which constitute employment and included in a
written statement furnished to the employer pursuant to Section 6053
(a) of the Internal Revenue Code.
   The changes in law made in this section by Chapter 1461 of the
Statutes of 1985 shall apply with respect to wages earned on and
after January 1, 1986, in conformity with the provisions of federal
law.



928.  Unless otherwise specifically provided, the definitions and
qualifications of deferred compensation plans shall be determined for
purposes of this part in accordance with Subchapter D (commencing
with Section 401) of Chapter 1 of Subtitle A of the Internal Revenue
Code. When applying the Internal Revenue Code for the purposes of
this part, any reference to regulations of the Internal Revenue
Service shall not apply if the Employment Development Department has
adopted and issued regulations on this subject. In the absence of
regulations issued by the Employment Development Department,
regulations issued under the Internal Revenue Code shall govern the
interpretation of this part.



928.5.  "Wages" also includes all of the following:
   (a) Any employer contributions under a qualified cash or deferred
arrangement, as defined by Section 401(k) of the Internal Revenue
Code, to the extent the amount is excluded from the gross income of
the employee under Section 402(e)(3) of the Internal Revenue Code.
   (b) Any amount treated as an employer contribution under a state
pickup plan as defined by Section 414(h)(2) of the Internal Revenue
Code, only if the payments are made pursuant to a salary reduction
arrangement.
   (c) Any amount deferred under a nonqualified deferred compensation
plan shall be taken into account, for purposes of this article, on
the later of the following:
   (1) When the services are performed.
   (2) When there is no substantial risk of forfeiture of the right
to the amount.
   (d) Any amount taken into account as "wages" by reason of
subdivision (c), and the income attributable thereto, shall be taxed
only once and shall not thereafter be treated as "wages" for purposes
of this article.
   (e) For the purposes of this section, the term "nonqualified
deferred compensation plan" means any plan or arrangement for
deferral of compensation other than a plan described under Section
934.


928.7.  "Wages" includes compensation, that is deductible under
Section 162 of the Internal Revenue Code, paid to a member of a
limited liability company filing a federal corporate income tax
return.


929.  "Wages" does not include the actual amount of any required or
necessary business expense incurred by an individual in connection
with his employment, or, in lieu of the actual amount of such
expenses, the reasonably estimated amount allowed therefor pursuant
to authorized regulations.



930.  "Wages" does not include remuneration in excess of seven
thousand dollars ($7,000) paid to an individual by an employer during
any calendar year, with respect to employment.



930.1.  For the purpose of determining whether an employer has paid
remuneration with respect to employment in excess of the limitation
prescribed by Section 930 to an individual during any calendar year,
the remuneration shall be deemed to include any remuneration paid to
the individual by the employer for services constituting employment
under the unemployment compensation law of another state which the
employer has reported to the other state as wages for contribution
purposes. As used in this section, "remuneration" does not include
the remuneration of the type described in Sections 931, 931.5, 933,
934, 935, 936, 937, 938, 938.1, and 938.3 when paid by the employer
in another state.


930.5.  If an employer during any calendar year acquires
substantially all the property used in a trade or business of another
employer, or used in a separate unit of a trade or business of the
other employer, and immediately after the acquisition employs in his
or her trade or business an individual who immediately prior to the
acquisition was employed in the trade or business of the employer
from whom the property was acquired, then, for the purpose of
determining whether the acquiring employer has paid remuneration with
respect to employment in excess of the limitation prescribed by
Section 930, or the limitation prescribed by Section 985, to the
individual during the calendar year, any remuneration with respect to
employment paid to the individual by the employer from whom the
property was acquired during the calendar year and prior to the
acquisition shall be considered as having been paid by the acquiring
employer. As used in this section, "remuneration" does not include
the remuneration referred to in Sections 931, 931.5, 933, 934, 935,
936, 937, 938, 938.1, and 938.3.



931.  "Wages" does not include the amount of any payment, including
any amount paid by an employer for insurance or annuities, or into a
fund, to provide for any payment, made to or on behalf of an employee
or any of his or her dependents under a plan or system established
by an employer which makes provision for his or her employees
generally, or for his or her employees generally and their
dependents, or for a class or classes of his or her employees, or for
a class or classes of his or her employees and their dependents, on
account of any of the following:
   (a) Sickness or accident disability, but in the case of payments
made to an employee or any of his or her dependents, this subdivision
shall exclude from "wages" only those payments which are received
under a workers' compensation law.
   (b) Medical or hospitalization expenses in connection with
sickness or accident disability.
   (c) Death.



931.5.  (a) Except for Part 2 (commencing with Section 2601) of this
division and Division 6 (commencing with Section 13000), any third
party which makes a payment included in the term "wages" solely by
reason of subdivision (a) of Section 931 shall be the employer with
respect to those wages unless the third-party payer notifies the last
employer, who is a member of the plan and for whom the services were
performed, within 15 days of payment, and provides all of the
following information to that last employer:
   (1) The name and social security account number of the recipients
of the wages paid pursuant to subdivision (a) of Section 931.
   (2) The amount of gross wages paid pursuant to subdivision (a) of
Section 931.
   (b) The special rule prescribed by this subdivision applies to the
payment of sick pay made by a third-party payer, such as an insurer,
under a contract of insurance pursuant to a multiple employer plan
that is obligated to make payments for sick pay to employees of
participating employers. If the third-party payer provides the plan
with the notification required by subdivision (a) within the time
required, the plan, not the third-party payer, shall be treated as
the employer under subdivision (a). If within six business days after
receipt of the notification the plan similarly notifies the last
employer for whom the services are performed, and who is a plan
member, that employer, not the plan, shall be required to report and
pay the contributions due with respect to the wages.
   (c) The employer, as determined by subdivision (a) or (b), shall
pay contributions, required by this part, except as provided in
Sections 984 and 986, and shall comply with the requirements of
subdivision (a) of Section 1088.
   (d) When an employer receives the notification prescribed in
subdivision (a) or (b), the wages described therein shall be deemed
paid when the notice is received.
   (e) The director shall not make an assessment pursuant to Section
1126, 1127, or 1137 to assess employee contributions required by
Sections 984 and 13020 on third-party sick pay as described in
subdivision (a) for the period from January 1, 1987, through the date
on which this subdivision became effective.
   (f) Except as provided by Section 1176 and Section 19301 of the
Revenue and Taxation Code, no refunds may be made for employee
contributions required by Sections 984 and 13020 paid on third-party
sick pay as described in subdivision (a) for the period from January
1, 1987, through the date on which this subdivision became effective.




933.  "Wages" does not include any payment on account of sickness or
accident disability, or medical or hospitalization expenses in
connection with sickness or accident disability made by an employer
to, or on behalf of, an employee after the expiration of six calendar
months following the last calendar month in which the employee
worked for such employer.



934.  "Wages" does not include any payment made to, or on behalf of,
an employee or his or her beneficiary:
   (a) From or to a trust described in Section 401(a) of the Internal
Revenue Code which is exempt from tax under Section 501(a) of that
code at the time of the payment, unless the payment is made to an
employee of the trust as remuneration for services rendered as an
employee and not as a beneficiary of the trust.
   (b) Under or to an annuity plan which, at the time of the payment,
is a plan described in Section 403(a) of the Internal Revenue Code.
   (c) Under a simplified employee pension, as defined in Section 408
(k)(1) of the Internal Revenue Code, other than any contributions
described in Section 408(k)(6) of the Internal Revenue Code.
   (d) Under a simple retirement account, as described in Section 408
(p) of the Internal Revenue Code, other than any elective
contributions under Section 408(p)(2)(A)(i) of the Internal Revenue
Code.
   (e) Under or to an annuity contract described in Section 403(b) of
the Internal Revenue Code, other than a payment for the purchase of
the contract which is made by reason of a salary reduction agreement,
whether evidenced by a written instrument or otherwise.
   (f) Under or to an exempt governmental deferred compensation plan,
as defined in Section 3121(v)(3) of the Internal Revenue Code.
   (g) To supplement pension benefits under a plan or trust described
in any of the foregoing provisions of this section to take into
account some portion or all of the increase in the cost of living, as
determined by the Secretary of Labor, since retirement, but only if
the supplemental payments are under a plan which is treated as a
welfare plan under Section 3(2)(B)(ii) of the Employee Retirement
Income Security Act of 1974.



935.  "Wages" does not include the payment by an employer, without
deduction from the remuneration of the employee, of the tax imposed
upon an employee under Section 3101 of the Internal Revenue Code with
respect to remuneration paid to an employee for domestic service in
a private home of the employer or for agricultural labor, as defined
in subsection (g) of Section 3121 of the Internal Revenue Code.




936.  "Wages" does not include remuneration paid in any medium other
than cash to an employee for service not in the course of the
employer's trade or business, except that this section shall not
apply to remuneration paid for domestic service in a private home or
in a local college club or local chapter of a college fraternity or
sorority.



937.  "Wages" does not include the payment to, or on behalf of, an
employee for moving expenses, if at the time of the payment it is
reasonable to believe that a corresponding deduction from income is
allowable to the employee under Section 217 of the Internal Revenue
Code.



938.  (a) "Wages" does not include any payment or series of payments
by an employer to an employee or any of his or her dependents which
is paid:
   (1) Upon or after the termination of an employee's employment
relationship because of death or retirement for disability, and
   (2) Under a plan established by the employer which makes provision
for his or her employees generally or a class or classes of his or
her employees, or for the employees or class or classes of employees
and their dependents.
   (b) This section shall not apply to any payment or series of
payments which would have been paid if the employee's employment
relationship had not been terminated as prescribed by this section.



938.1.  "Wages" does not include any contribution, payment, or
service provided by an employer which may be excluded from the gross
income of an employee, his or her spouse, or his or her dependents,
under the provisions of Section 120 of the Internal Revenue Code,
relating to amounts received under a qualified group legal services
plan.



938.3.  "Wages" does not include any payment made, or benefit
furnished to, or for the benefit of, an employee, for any of the
following:
   (a) An educational assistance program if, at the time of payment
or the furnishing, it is reasonable to believe that the employee will
be able to exclude the payment or benefit from income under Section
127 of the Internal Revenue Code.
   (b) A dependent care assistance program if, at the time of payment
or the furnishing, it is reasonable to believe that the employee
will be able to exclude the payment or benefit from income under
Section 129 of the Internal Revenue Code.
   (c) Any benefit provided to or on behalf of an employee if at the
time the benefit is provided it is reasonable to believe that the
employee will be able to exclude the benefit from income under
Section 74(c), 117, or 132 of the Internal Revenue Code.
   (d) Any benefit under a cafeteria plan, as described in Section
125 of the Internal Revenue Code, if the benefit is excludable from
wages pursuant to any other provision of this article, except Section
930.


938.4.  "Wages" does not include any payment made, or benefit
furnished to, or for the benefit of, an employee under Section 105(b)
of the Internal Revenue Code, relating to amounts expended for
medical care, as amended by Section 1004(d)(1) of the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152).




938.5.  "Wages" does not include any payment received by a member of
the National Guard or reserve component of the armed forces for
inactive duty training, annual training, or emergency state active
duty.


938.7.  "Wages," does not include any payment made by an employer to
a survivor, or the estate of a former employee, after the calendar
year in which the employee died.



939.  Types of payments excluded from the definition of wages by
Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, 938.3, and
938.7 shall be excluded from the definition of wages only during the
time that the respective type or types of payments set forth in those
sections are similarly excluded from the definition of wages
contained in the Federal Unemployment Tax Act.



940.  For the purposes of this section, of Sections 977 and 977.5 to
the extent specified by those sections, and of Sections 1026, 1088,
1280, 1281, 1282, 2652, 2654, 2655, and 2657, "wages" means taxable
wages as well as wages which would be taxable except for the
limitations on taxable wages provided under Sections 930 and 985.

back to top

976.  Employer contributions to the Unemployment Fund shall accrue
and become payable by every employer, except an employer as defined
by Section 676, for each calendar year with respect to wages paid for
employment. The contributions are due and shall be paid to the
department for the Unemployment Fund by each employer in accordance
with this division and shall not be deducted in whole or in part from
the wages of individuals in his employ.



976.5.  (a) Except as provided in subdivision (b), in addition to
other contributions required by this division, every employer, except
an employer to which subdivision (c) is applicable, may submit a
voluntary unemployment insurance contribution for the purpose of
redetermining its unemployment insurance contribution rate. No
redetermination of a contribution rate shall be made unless the
voluntary contribution is submitted as required in subdivision (c) of
Section 1110. No redetermination shall reduce an employer's
unemployment insurance contribution rate by more than three rates as
provided in Section 977.
   (b) This section shall not be operative in calendar years in which
Contribution Rate Schedules E and F in Section 977 are in effect, or
in calendar years to which the emergency solvency surcharge provided
in Section 977.5 is in effect.
   (c) This section does not apply to any of the following:
   (1) An employer not eligible for a contribution rate other than
that provided pursuant to Section 982 or subdivision (c) of Section
977.
   (2) An employer with a negative reserve account balance on the
computation date.
   (3) An employer who was notified prior to September 1 of any
unpaid amount owed to the department which is not the subject of a
timely petition for reassessment pending before the appeals board on
September 30 preceding the year to which a contribution rate is
applicable.


976.6.  In addition to other contributions required by this
division, every employer, except an employer defined by Section 676,
684, or 685, and except an employer that has elected an alternate
method of financing its liability for unemployment compensation
benefits pursuant to Article 5 (commencing with Section 801), or
Article 6 (commencing with Section 821) of Chapter 3, shall pay into
the Employment Training Fund contributions at the rate of 0.1 percent
of wages specified in Section 930. The contributions shall be
collected in the same manner and at the same time as any
contributions required under Sections 977 and 977.5.



976.8.  (a) Section 976.6 does not apply to any employer who has a
negative reserve account balance on the computation date.
   (b) Subdivision (a) does not apply to an employer assigned the
maximum rate pursuant to subdivision (c) of Section 977.




977.  (a) Except as provided in subdivision (c), if, as of the
computation date, the employer's net balance of reserve equals or
exceeds that percentage of his or her average base payroll which
appears on any line in column 1 of the following table, but is less
than that percentage of his or her average base payroll which appears
on the same line in column 2 of that table, his or her contribution
rate shall be the figure appearing on that same line in the
appropriate schedule, as defined in subdivision (b), which shall be a
percentage of the wages specified in Section 930.

               Reserve                Contribution
                Ratio                     Rate
            Column Column               Schedules
   Line        1    2       AA    A    B    C    D    E    F
              less than
                 -20
               -20 to
                 -18
    01         -18 to       5.4  5.4  5.4  5.4  5.4  5.4  5.4
    02           -16        5.2  5.3  5.4  5.4  5.4  5.4  5.4
    03         -16 to       5.1  5.2  5.4  5.4  5.4  5.4  5.4
    04           -14        5.0  5.1  5.3  5.4  5.4  5.4  5.4
    05         -14 to       4.9  5.0  5.3  5.4  5.4  5.4  5.4
    06           -12        4.8  4.9  5.2  5.4  5.4  5.4  5.4
    07         -12 to       4.7  4.8  5.1  5.3  5.4  5.4  5.4
    08           -11        4.6  4.7  5.1  5.3  5.4  5.4  5.4
    09         -11 to       4.5  4.6  4.9  5.2  5.4  5.4  5.4
    10           -10        4.4  4.5  4.8  5.1  5.3  5.4  5.4
               -10 to
                 -09
               -09 to
                 -08
             -08 to -07
               -07 to
                 -06
    11         -06 to       4.3  4.4  4.7  5.0  5.3  5.4  5.4
    12           -05        4.2  4.3  4.6  4.9  5.2  5.4  5.4
    13         -05 to       4.1  4.2  4.5  4.8  5.1  5.3  5.4
    14           -04        4.0  4.1  4.4  4.7  5.0  5.3  5.4
    15         -04 to       3.9  4.0  4.3  4.6  4.9  5.2  5.4
                 -03
             -03 to -02
               -02 to
                 -01
    16         -01 to       3.8  3.9  4.2  4.5  4.8  5.1  5.4
    17           00         3.7  3.8  4.1  4.4  4.7  5.0  5.4
    18          00 to       3.4  3.6  3.9  4.2  4.5  4.8  5.1
    19           01         3.2  3.4  3.7  4.0  4.3  4.6  4.9
    20          01 to       3.0  3.2  3.5  3.8  4.1  4.4  4.7
                 02
              02 to 03
                03 to
                 04
    21          04 to       2.8  3.0  3.3  3.6  3.9  4.2  4.5
    22           05         2.6  2.8  3.1  3.4  3.7  4.0  4.3
    23          05 to       2.4  2.6  2.9  3.2  3.5  3.8  4.1
    24           06         2.2  2.4  2.7  3.0  3.3  3.6  3.9
    25          06 to       2.0  2.2  2.5  2.8  3.1  3.4  3.7
                 07
              07 to 08
                08 to
                 09
    26          09 to       1.8  2.0  2.3  2.6  2.9  3.2  3.5
    27           10         1.6  1.8  2.1  2.4  2.7  3.0  3.3
    28          10 to       1.4  1.6  1.9  2.2  2.5  2.8  3.1
    29           11         1.2  1.4  1.7  2.0  2.3  2.6  2.9
    30          11 to       1.0  1.2  1.5  1.8  2.1  2.4  2.7
                 12
              12 to 13
                13 to
    31           14         0.8  1.0  1.3  1.6  1.9  2.2  2.5
    32          14 to       0.7  0.9  1.1  1.4  1.7  2.0  2.3
    33           15         0.6  0.8  1.0  1.2  1.5  1.8  2.1
    34          15 to       0.5  0.7  0.9  1.1  1.3  1.6  1.9
                 16
              16 to 17
                17 to
    35           18         0.4  0.6  0.8  1.0  1.2  1.4  1.7
    36          18 to       0.3  0.5  0.7  0.9  1.1  1.3  1.5
    37           19         0.2  0.4  0.6  0.8  1.0  1.2  1.4
    38          19 to       0.1  0.3  0.5  0.7  0.9  1.1  1.3
                 20
             20 or more

   (b) (1) Whenever the balance in the Unemployment Fund on September
30 of any calendar year is greater than 1.8 percent of the wages (as
defined by Section 940) in employment subject to this part paid
during the 12-month period ending upon the computation date,
employers shall pay into the Unemployment Fund contributions for the
succeeding calendar year upon all wages with respect to employment at
the rates specified in Schedule AA.
   (2) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is equal to or less than 1.8 percent and greater
than 1.6 percent of the wages (as defined by Section 940) in
employment subject to this part paid during the 12-month period
ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year upon
all wages with respect to employment at the rates specified in
Schedule A.
   (3) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is equal to or less than 1.6 percent and greater
than 1.4 percent of the wages (as defined by Section 940) in
employment subject to this part paid during the 12-month period
ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year upon
all wages with respect to employment at the rates specified in
Schedule B.
   (4) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is equal to or less than 1.4 percent and greater
than 1.2 percent of the wages (as defined by Section 940) in
employment subject to this part paid during the 12-month period
ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year upon
all wages with respect to employment at the rates specified in
Schedule C.
   (5) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is equal to or less than 1.2 percent and greater
than 1.0 percent of the wages (as defined by Section 940) in
employment subject to this part paid during the 12-month period
ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year upon
all wages with respect to employment at the rates specified in
Schedule D.
   (6) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is equal to or less than 1.0 percent and greater
than or equal to 0.8 percent of the wages (as defined by Section
940) in employment subject to this part paid during the 12-month
period ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year
upon all wages with respect to employment at the rates specified in
Schedule E.
   (7) Whenever the balance in the Unemployment Fund on September 30
of any calendar year is less than 0.8 percent and greater than or
equal to 0.6 percent of the wages (as defined by Section 940) in
employment subject to this part paid during the 12-month period
ending upon the computation date, employers shall pay into the
Unemployment Fund contributions for the succeeding calendar year upon
all wages with respect to employment at the rates specified in
Schedule F.
   (c) For each rating period beginning on or after January 1, 2005,
in which an employer obtains or attempts to obtain a more favorable
rate of contributions under this section due to deliberate ignorance,
reckless disregard, fraud, intent to evade, misrepresentation, or
willful nondisclosure, the director shall assign the maximum
contribution rate plus 2 percent for each applicable rating period,
the current rating period, and the subsequent rating period.



977.5.  Whenever the balance in the Unemployment Fund on September
30 of any calendar year is less than 0.6 percent of the wages (as
defined by Section 940) in employment, subject to this part, paid
during the 12-month period ending on the computation date, employers
shall pay into the Unemployment Fund contributions for the succeeding
calendar year upon all wages with respect to employment at an
emergency solvency surcharge rate. The emergency solvency surcharge
rate shall be 1.15 times the rate the employer would have paid in
Schedule F of subdivision (a) of Section 977, rounded to the nearest
one-tenth of 1 percent.


979.  On or before January 10 of each calendar year, the director
shall prepare a statement based on records of the department
declaring which of the employer tax schedules contained in Section
977 shall be in effect for that calendar year and whether the
emergency solvency surcharge pursuant to Section 977.5 shall be
added. The statement shall be a public record and shall be final and
binding for that calendar year. The statement shall include the
official tabulation of wages in subject employment made by the
department for the purpose of Sections 977 and 977.5, a summary of
the data upon which that tabulation was based, and the sources from
which those data were obtained, and shall further include a summary
of the data upon which the computation of the balance in the
Unemployment Fund was based, and their source. The director's action
under Sections 977, 977.5, and this section shall not constitute an
authorized regulation.


980.  (a) In determining the balance in the Unemployment Fund for
the purpose of Sections 977 and 977.5, there shall be excluded all of
the following:
   (1) Any amount credited to this state's account in the
Unemployment Trust Fund pursuant to Section 903 of the federal Social
Security Act, as amended, which has been appropriated for expenses
of administration other than for capital assets, whether or not that
amount has been withdrawn from that fund.
   (2) Any unexpended advance from the federal unemployment account
in the Unemployment Trust Fund received in accordance with Section
323 of this division and Title XII of the federal Social Security
Act, as amended.
   (3) Any amount paid in advance into the Unemployment Fund by an
employer under any type of coverage pursuant to which reimbursement
of benefits is permitted or required in lieu of the contributions
required of employers.
   (4) Any amount paid in advance into the Unemployment Fund by the
federal government under any federal law that requires or permits
this state to pay benefits from the Unemployment Fund and provides
for advances by the federal government for reimbursement of all or
part of those benefits.
   (b) In determining the balance in the Unemployment Fund for the
purpose of Sections 977 and 977.5, there shall also be excluded any
estimated or other contributions not legally due and payable with
respect to the final calendar quarter of the calendar year, except
any payment of contributions made under Sections 976.5 and 1137 and
except any payment of contributions by employers terminating business
during any calendar quarter.



980.5.  In determining the balance in the Unemployment Fund for the
purpose of Sections 977 and 977.5, there shall be included both of
the following:
   (a) The unreimbursed balance of all benefits paid from the
Unemployment Fund to claimants when those benefits are based upon
wages in employment under any type of coverage pursuant to which
reimbursement of benefits is permitted or required in lieu of the
contributions required of employers, whether or not the director has
certified the benefits to the employer as due or payable.
   (b) The unreimbursed balance of all benefits paid from the
Unemployment Fund to claimants when, and to the extent that, the
benefits are subject to reimbursement by the federal government under
any federal law that requires or permits this state to pay benefits
from the Unemployment Fund and provides for reimbursement by the
federal government of all or part of those benefits.



981.  In determining wages in employment, for the purpose of
Sections 977 and 977.5, there shall be excluded all wages paid in
employment under any type of coverage pursuant to which reimbursement
of benefits is permitted or required in lieu of the contributions
required of employers.



982.  (a) Except as provided in subdivision (b), no employer shall
be eligible for a contribution rate of more or less than 3.4 percent
for any rating period unless his or her reserve account has been
subject to benefit charges during the period of 12 complete
consecutive calendar quarters ending on the computation date for that
rating period and he or she is qualified under Sections 977 and
977.5.
   (b) No new employer shall be eligible for a contribution rate of
more or less than 3.4 percent unless his or her reserve account has
been subject to benefit charges during the period of 12 complete
consecutive calendar months ending on the computation date and the
new employer is qualified under Sections 977 and 977.5.
   (c) For the purposes of this section "new employer" means any of
the following:
   (1) An employer who first qualifies as an employer after the 1969
calendar year, and whose account is continuously subject to benefit
charges from the date of first chargeability, except that a successor
employer under Section 1051 is not a new employer if the successor
applies for or obtains the transfer of the reserve account or part
thereof of a predecessor who is not a new employer.
   (2) An employer whose entire reserve account has been transferred
to a successor under Article 5 (commencing with Section 1051) of
Chapter 4 of this part.
   (3) An employer whose reserve account has been canceled pursuant
to Section 1029.
   (d) Section 905 applies to a new employer, except that for the
purposes of this section "average base payroll" means:
   (1) The payroll in the calendar year immediately preceding the
computation date for a new employer with a payroll only in that
calendar year.
   (2) The quotient obtained by dividing by two the total amount of
taxable wages paid by a new employer during the most recent period of
two consecutive calendar years immediately preceding the computation
date, for a new employer with a payroll only in each of, or only in
the first of, the two consecutive calendar years.
   (e) The contribution rate of an employer, for any period prior to
January 1, 1988, shall not be changed, other than by the provisions
of Sections 977 and 977.5, when the director makes a determination,
pursuant to Section 135.1 or 135.2, because of arrangements entered
into or business activities conducted between January 1, 1984, and
January 1, 1986.
   (f) This section does not apply to an employer assigned the
maximum rate pursuant to subdivision (c) of Section 977.



984.  (a) (1) Each worker shall pay worker contributions at the rate
determined by the director pursuant to this section with respect to
wages, as defined by Sections 926, 927, and 985. On or before October
31 of each calendar year, the director shall prepare a statement,
which shall be a public record, declaring the rate of worker
contributions for the calendar year and shall notify promptly all
employers of employees covered for disability insurance of the rate.
   (2) (A) Except as provided in paragraph (3), the rate of worker
contributions for calendar year 1987 and for each subsequent calendar
year shall be 1.45 times the amount disbursed from the Disability
Fund during the 12-month period ending September 30 and immediately
preceding the calendar year for which the rate is to be effective,
less the amount in the Disability Fund on that September 30, with the
resulting figure divided by total wages paid pursuant to Sections
926, 927, and 985 during the same 12-month period, and then rounded
to the nearest one-tenth of 1 percent.
   (B) The director shall increase the rate of worker contributions
by .08 percent for the 2004 and 2005 calendar years to cover the
initial cost of family temporary disability insurance benefits
provided in Chapter 7 (commencing with Section 3300) of Part 2.
   (3) The rate of worker contributions shall not exceed 1.5 percent
or be less than 0.1 percent. The rate of worker contributions shall
not decrease from the rate in the previous year by more than
two-tenths of 1 percent.
   (b) Worker contributions required under Sections 708 and 708.5
shall be at a rate determined by the director to reimburse the
Disability Fund for unemployment compensation disability benefits
paid and estimated to be paid to all employers and self-employed
individuals covered by those sections. On or before November 30th of
each calendar year, the director shall prepare a statement, which
shall be a public record, declaring the rate of contributions for the
succeeding calendar year for all employers and self-employed
individuals covered under Sections 708 and 708.5 and shall notify
promptly the employers and self-employed individuals of the rate. The
rate shall be determined by dividing the estimated benefits and
administrative costs paid in the prior year by the product of the
annual remuneration deemed to have been received under Sections 708
and 708.5 and the estimated number of persons who were covered at any
time in the prior year. The resulting rate shall be rounded to the
next higher one-hundredth percentage point. The rate may also be
reduced or increased by a factor estimated to maintain as nearly as
practicable a cumulative zero balance in the funds contributed
pursuant to Sections 708 and 708.5. Estimates made pursuant to this
subdivision may be made on the basis of statistical sampling, or
another method determined by the director.
   (c) The director's action in determining a rate under this section
shall not constitute an authorized regulation.
   (d) (1) Notwithstanding subdivision (a), and except as provided in
paragraph (2), the director may, at his or her discretion, increase
or decrease, by not to exceed 0.1 percent, the rate of worker
contributions determined pursuant to subdivision (a), up to a maximum
worker contribution rate of 1.5 percent, if he or she determines the
adjustment is necessary to reimburse the Disability Fund for
disability benefits paid or estimated to be paid to individuals
covered by this section or to prevent the accumulation of funds in
excess of those needed to maintain an adequate fund balance.
   (2) Notwithstanding paragraph (1), for the 2004, 2005, and 2006
calendar years, the director may not decrease the rate of worker
contributions, regardless of whether the director determines that a
decrease is necessary to prevent the accumulation of funds in excess
of those needed to maintain the adequacy of the Disability Fund
during program implementation.



984.5.  (a) Effective January 1, 1994, the director shall prepare a
statement on or before November 30 of each calendar year, which shall
be a public record, declaring the rate of contributions of the
succeeding calendar year for all employers and self-employed
individuals covered under Section 708 or 708.5 and shall notify
promptly the employers and self-employed individuals of the rate. For
calendar years 1994 to 1996, inclusive, worker contributions
required under Section 708 or 708.5 shall be at a rate determined by
the director to reimburse the Disability Fund for the sum of
estimated administrative costs due to those sections and unemployment
compensation disability benefits estimated to be paid to all
employers and self-employed individuals covered by those sections.
The rate shall be determined by dividing the sum of the benefits
expected to be paid in the following calendar year and the
administrative costs expected to be incurred under Section 708 or
708.5 during that calendar year by earnings estimated to be reported
under those sections for that same calendar year. The resulting rate
shall be rounded to the next higher one-hundredth percentage point.
This rate may also be reduced or increased by a factor estimated to
maintain as nearly as practicable a cumulative zero balance in funds
contributed pursuant to Section 708 or 708.5.
   For calendar year 1997, and each calendar year thereafter, the
rate established each November 30 shall be determined by multiplying
the current year's rate by the ratio of 1.10 times the current year
disbursements divided by contributions for the same period, under
Sections 708 and 708.5. If in any calendar year the cumulative
balance of contributions minus disbursements equals or exceeds 20
percent of annual disbursements, the contribution rate for the
succeeding year shall be adjusted to a level necessary to maintain
revenues at no more than 20 percent over annual disbursements. If
legislation is enacted necessitating adjustments in the benefit
levels for employers and self-employed individuals covered under
Section 708 or 708.5, the rate may be adjusted by a factor estimated
to provide that funds contributed pursuant to Section 708 or 708.5
cover disbursements pursuant to these sections.
   For the purpose of this subdivision, disbursements are defined as
the sum of unemployment compensation disability benefits paid to
employers and self-employed individuals covered under Section 708 or
708.5, plus administrative costs related to those sections. Estimates
made pursuant to this subdivision shall be available for public
inspection.
   (b) The director's action in determining a rate under this section
shall not constitute an authorized regulation.



985.  Section 984 shall not apply to that part of the remuneration
which, after remuneration with respect to employment equal to four
times the maximum weekly benefit for each calendar year specified in
Section 2655 multiplied by 13 and divided by 55 percent has been paid
to an individual by an employer, is paid to the individual by the
employer.



986.  (a) Notwithstanding any provision of law in this state to the
contrary, each employer shall:
   (1) Except as provided in subdivision (a)(2) of this section,
withhold in trust the amount of his workers' contributions from their
wages at the time the wages are paid, shall show the deduction on
his payroll records, and shall furnish each worker with a statement
in writing showing the amount which has been deducted, in such form
and at such times as may be prescribed.
   (2) Hold in trust the amount of his workers' contributions, at the
time their wages are paid, where he undertakes or agrees to pay
without deduction from the wages of his workers the amount of worker
contributions required of his workers under this division.
   (b) Each employer shall transmit all such contributions withheld
or held in trust to the department for the Disability Fund, in
addition to his own contributions for the Unemployment Fund, pursuant
to authorized regulations.



987.  Each employer shall be liable for any and all contributions
required to be made by his workers on account of wages which he has
paid to them regardless of whether or not he has deducted the
contributions from the workers' wages at the time they were paid, but
no employer shall be liable for worker contributions required on
behalf of himself or of any of his employees with respect to wages
paid while there is in effect at the time the wages were paid a rule
or regulation or interpretation of the director or of the department
that such wages were not subject to such contributions.



987.7.  (a) If the worker contributions required in any one month to
be made because of the receipt of cash tips and cash gratuities
exceed the wages of the worker under the control of the employer, the
worker may furnish the employer, on or before the 10th day of the
following month, or, if the amounts are estimated, on or before the
last day of the month following the calendar quarter, an amount equal
to the excess.
   (b) If the worker contributions required by Section 984 with
respect to cash tips and cash gratuities exceed the amount of worker
contributions that can be collected by the employer from the wages of
the worker, the excess shall be paid by the worker, except as
provided by Section 1088.6. The worker shall pay the excess to the
department within 30 days from his or her receipt of the written
statement furnished by his or her employer pursuant to Section
1088.6. If the worker fails to pay the excess within the time
required by this subdivision, the director may make an assessment for
the excess and shall give the worker a written notice of the
assessment. Article 8 (commencing with Section 1126) with respect to
the assessment of contributions and Chapter 7 (commencing with
Section 1701) with respect to the collection of contributions shall
apply to the recovery of amounts under this subdivision.
   (c) The director may offset amounts assessed pursuant to
subdivision (b) against any refund payable to the worker under
Section 1176.5 or against any amount of disability benefits to which
he or she may become entitled under Part 2 (commencing with Section
2601) within any of the following periods:
   (1) The current disability benefit period.
   (2) One year from the beginning date of any disability benefit
period that begins during the three-year period next succeeding the
service of notice of the assessment.



988.  In case of the insolvency or bankruptcy of an employer,
contributions by workers, payable as provided in this article, shall
not be considered any part of the employer's assets and shall be paid
to the director prior to the payment of any other claim against the
employer.



989.  The annual tax rate or contribution rate which under this
division is determined to apply to any particular employee or any
particular employer, or group of employees or group of employers,
shall be made public and available for public inspection but in no
case shall the amount of tax paid by any employee or employer, or
group of employees or group of employers, be disclosed to the public.



990.  In the payment of any contributions, a fractional part of a
cent shall be disregarded unless it amounts to one-half cent ($0.005)
or more, in which case it shall be increased to one cent ($0.01).



991.  (a) Any contributions paid to the Unemployment Fund or
Disability Fund either with respect to wages on which contributions
previously have been paid in error and without negligence on the part
of the employing unit to another state having an unemployment
compensation law, or with respect to wages on which contributions
computed under the Federal Unemployment Tax Act previously have been
paid in error and without negligence on the part of the employing
unit to an agency of the federal government, shall be deemed for the
purposes of this division to have been paid to the department at the
time of the erroneous payment to the other state or to the federal
agency, if payment is made to the department by the employing unit
within 30 days after the employing unit is given notice pursuant to
Section 1206 by the director of the determination that payment shall
be made to the department. The 30-day period for payment may be
extended by the director for good cause for a period not to exceed an
additional 90 days.
   (b) Any contributions paid to the Unemployment Fund or Disability
Fund with respect to wages on which contributions computed under this
division previously have been paid in error and without negligence
on the part of the employing unit to an admitted disability insurer,
to trustees administering a voluntary plan for the employing unit, to
a self-insured plan of the employing unit, to another agency of this
state, or to an agency of the federal government shall be deemed,
solely to the extent of the amount of contributions previously paid
in error and without negligence, for the purposes of this division to
have been paid to the department at the time of the erroneous
payment to the admitted disability insurer, to trustees administering
a voluntary plan for the employing unit, to a self-insured plan of
the employing unit, to another agency of this state, or to the
federal agency, if payment is made to the department by the employing
unit within 30 days after the employing unit is given notice
pursuant to Section 1206 by the director of the determination that
payment shall be made to the department. The 30-day period for
payment may be extended by the director for good cause for a period
not to exceed an additional 90 days. As used in this subdivision
"paid" includes credits made to a self-insured plan of the employing
unit. With respect to payments by an employing unit to an admitted
disability insurer, to trustees administering a voluntary plan for
the employing unit, or to a self-insured plan of the employing unit,
this subdivision shall apply only if one or more of the following
conditions are met:
   (1) At the time of payment the employing unit has or prior to the
time of payment had an approved voluntary plan with the recipient of
the payment.
   (2) Prior to the time of payment the employing unit had applied to
the department for a voluntary plan which was subsequently approved
by the department.
   (3) At the time of payment the employing unit is a subsidiary or
affiliate of an employing unit having an approved voluntary plan.
   (4) At the time of payment the employing unit believed that a
voluntary plan had been acquired pursuant to Section 3254.5.
   (c) If payment is not made within the 30-day period or within the
period for which an extension is granted, this section shall not
apply and Article 7 (commencing with Section 1110), Article 8
(commencing with Section 1126), and Chapter 7 (commencing with
Section 1701), with respect to the payment of reported contributions,
and the assessment and collection of contributions shall apply.
   (d) If the director finds that the collection of any contributions
will be jeopardized by delay this section shall not apply and the
director may make a jeopardy assessment and collect the contributions
pursuant to Article 8 (commencing with Section 1126), and Chapter 7
(commencing with Section 1701).



992.  During such time as the Federal Unemployment Tax Act is
amended so that employers are allowed, against the tax imposed by
Section 3301 of that act, credits amounting to 100 percent of such
tax on account of contributions paid under this division, then the
additional amount of contributions provided for by Section 993 shall
be required to be paid into the Unemployment Fund.



993.  Every employer who is subject to the tax provided for by
Section 3301 of the Federal Unemployment Tax Act, shall, subject to
Section 992, pay into the Unemployment Fund in addition to the
amounts required by other provisions of this division an amount equal
to five-tenths of 1 percent, or such other percentage as applies for
a calendar year pursuant to Section 6157 of the Internal Revenue
Code of 1954, of all wages paid by him or her in employment and
included in the measure of the contributions allowed as the credit
against the tax imposed by Section 3301 of the Federal Unemployment
Tax Act.


994.  Sections 992 and 993 shall not become operative unless the
Secretary of Labor certifies that they are in conformity with the
provisions of Title III of the Social Security Act and Sections 3302,
3303, and 3304 of the Federal Unemployment Tax Act.




995.  The department shall submit to the Legislature in May and
October of each year a report on the status of the Unemployment Fund
and the Unemployment Compensation Disability Fund. Each report shall
include both actual and forecasted information on the fund balances,
receipts, disbursements, claim data, tax rates, and employment
levels.

back to top

1025.  The director shall keep separate records of the amounts paid
into the fund by each employer in his or her own behalf, or
chargeable to him or her as benefits; but nothing in this division
shall be construed to grant any employer or his or her employees
prior claims or rights to the amount contributed by him or her to the
fund, either on his or her own account or on behalf of his or her
employees. The amount of employer contributions, advances, or
reimbursements under Article 5 (commencing with Section 801) of
Chapter 3 of this part or Section 821, and all other amounts payable
to the fund, shall be pooled and available to pay unemployment
compensation benefits to any employee entitled thereto, regardless of
the source of contributions or any other amounts.



1026.  (a) The director shall maintain a separate reserve account
for each employer, and shall credit each reserve account with all the
contributions paid on his or her behalf.
   (b) Unemployment compensation benefits paid to an unemployed
individual during any benefit year shall be charged against the
reserve account of his or her employer during his or her base period.
If the individual performed services in employment for more than one
employer during his or her base period, unemployment compensation
benefits paid to him or her shall be charged against the respective
reserve accounts of the employers in the proportion that the total
wages paid to the individual in employment for each employer bears to
the total wages paid to the individual in employment for all
employers during the base period.
   (c) The director shall credit the interest earned by the
Unemployment Fund to each positive reserve employer account in
proportion to the amount the account bears to the total of all
positive reserve accounts.
   (d) Except as provided by Sections 803 and 821, in proportion to
the amount each employer's taxable wages bears to the total of all
employers' taxable wages, the director shall credit to each employer
reserve account all of the following:
   (1) Benefit overpayments collected in the four quarters prior to
the computation date.
   (2) Positive balances in reserve accounts canceled pursuant to
Section 1029.
   (3) Other nontax income.
   (e) Except as provided by Sections 803 and 821, in the same
proportion as provided in subdivision (d), the director shall charge
to each employer reserve account all of the following:
   (1) The increase in the total of all negative reserve account
balances as computed by subtracting the total of all negative reserve
account balances on July 31 of each year prior to the cancellations
required by Section 1027.5 from the total of all negative reserve
account balances on the prior July 31 after the cancellations
required by Section 1027.5, except as provided by Section 1144.
   (2) Benefit overpayments established in the four quarters prior to
the computation date.
   (3) Benefits not charged to employer reserve accounts pursuant to
Section 1032, 1032.5, 1034, 1035, 1036, 1335, 1338, or 1380.
   (4) Other items of expense and benefit charges not included in
active employer reserve accounts.



1026.1.  Notwithstanding any other provision of this code, an
employer's reserve account shall not be relieved of charges relating
to a benefit overpayment if the department determines that the
payment was made because the employer, or an agent of the employer,
was at fault for failing to respond timely or adequately to requests
of the department for information relating to the individual claim
for unemployment compensation benefits. The department shall make
this determination when the employer or agent fails to respond timely
or adequately in two instances relating to the individual claim for
unemployment compensation benefits. This section shall apply to
benefit overpayments established on or after October 22, 2013.




1027.1.  On the computation date in 1966, the portion of each
negative reserve balance which has not previously been charged to the
balancing account shall be transferred to that account and the
employer's reserve account thereupon canceled. The computation on
such date for calendar year 1967 shall be based upon the status of
the employer's account prior to such transfer and cancellation
subject to the requirements of Section 982. The computation for each
calendar year beginning with calendar year 1968 shall be in
accordance with the requirements of Section 982 and an employer whose
reserve account has been canceled under this section shall be
considered as first becoming a subject employer on July 1, 1966.



1027.5.  On the computation date each year, the amount each employer'
s net balance of reserve is more negative than 21 percent of the
employer's average base payroll shall be canceled from his or her
reserve balance.
   The amendment made to this section by Chapter 1296 of the Statutes
of 1984 shall be deemed to have become operative on June 30, 1984,
and the amendment shall be given retroactive effect to that date.




1027.6.  On the computation date of June 30, 1983, the amount each
employer's net balance of reserve was more negative than 12 percent
of the employer's average base payroll shall be canceled from his or
her reserve balance.


1028.  The charge of unemployment compensation benefits to an
employer's account required by Section 1026 shall be made in such
manner as to include as of each computation date all unemployment
compensation benefit payments made on or before the computation date.
In computing the charge to employers' accounts, a fractional part of
a dollar shall be disregarded unless it amounts to one-half dollar
($0.50) or more, in which case it shall be increased to one dollar
($1).


1029.  (a) Whenever an employer ceases to pay wages in employment,
the reserve account of the employer, unless it has been transferred
under Article 5 (commencing with Section 1051), shall be canceled on
the records of the department after a period of three consecutive
years has elapsed following the latest calendar quarter in which the
employer paid wages in employment.
   (b) Whenever a period of three consecutive years has elapsed,
commencing with the effective date of an election by any entity to
finance benefits pursuant to Section 803, any portion of the reserve
account of the entity that has not been subject to use pursuant to
Section 712 or 713, unless that portion has been reacquired by the
entity by termination of the election under Section 803 prior to the
expiration of the three-year period, shall be canceled on the records
of the department. Section 982 shall apply to that entity.
   (c) Upon the termination of an election by a school employer to
finance benefits pursuant to Article 6 (commencing with Section 821)
of Chapter 3, any favorable balance in the account of the school
employer under the election shall be canceled on the records of the
department.


1030.  (a) An employer that is entitled under Section 1327 to
receive notice of the filing of a new or additional claim may, within
10 days after mailing of the notice, submit to the department any
facts within its possession disclosing whether the claimant left the
employer's employ voluntarily and without good cause or left under
one of the following circumstances:
   (1) The claimant was discharged from the employment for misconduct
connected with his or her work.
   (2) The claimant's discharge or quitting from his or her most
recent employer was the result of an irresistible compulsion to use
or consume intoxicants including alcoholic beverages.
   (3) The claimant was a student employed on a temporary basis and
whose employment began within, and ended with his or her leaving to
return to school at the close of, his or her vacation period.
   (4) The claimant left the employer's employ to accompany his or
her spouse or domestic partner to a place or to join him or her at a
place from which it is impractical to commute to the employment, and
to which a transfer of the claimant by the employer is not available.
   (5) The claimant left the employer's employ to protect his or her
family or himself or herself from domestic violence abuse.
   (6) The claimant left the employer's employ to take a
substantially better job.
   The period during which the employer may submit these facts may be
extended by the director for good cause.
   (b) A base period employer that is not entitled under Section 1327
to receive notice of the filing of a new or additional claim and is
entitled under Section 1329 to receive notice of computation may,
within 15 days after mailing of the notice of computation, submit to
the department any facts within its possession disclosing whether the
claimant left the employer's employ voluntarily and without good
cause or left under one of the following circumstances:
   (1) The claimant was discharged from the employment for misconduct
connected with his or her work.
   (2) The claimant was a student employed on a temporary basis and
whose employment began within, and ended with his or her leaving to
return to school at the close of, his or her vacation period.
   (3) The claimant left the employer's employ to accompany his or
her spouse or domestic partner to a place or join him or her at a
place from which it is impractical to commute to the employment, and
to which a transfer of the claimant by the employer is not available.
   (4) The claimant left the employer's employ to protect his or her
family or himself or herself from domestic violence abuse.
   (5) The claimant left the employer's employ to take a
substantially better job.
   The period during which the employer may submit these facts may be
extended by the director for good cause.
   (c) The department shall consider these facts together with any
information in its possession. If the employer is entitled to a
ruling under subdivision (b) or to a determination under Section
1328, the department shall promptly notify the employer of its ruling
as to the cause of the termination of the claimant's employment. The
employer may appeal from a ruling or reconsidered ruling to an
administrative law judge within 20 days after mailing or personal
service of notice of the ruling or reconsidered ruling. The 20-day
period may be extended for good cause, which includes, but is not
limited to, mistake, inadvertence, surprise, or excusable neglect.
The director is an interested party to an appeal. The department may
for good cause reconsider a ruling or reconsidered ruling within
either five days after the date an appeal to an administrative law
judge is filed or, if an appeal is not filed, within 20 days after
mailing or personal service of notice of the ruling or reconsidered
ruling. However, a ruling or reconsidered ruling that relates to a
determination that is reconsidered pursuant to subdivision (a) of
Section 1332 may also be reconsidered by the department within the
time provided for reconsideration of that determination.
   (d) For purposes of this section only, if the claimant voluntarily
leaves the employer's employ without notification to the employer of
the reasons for the leaving, and if the employer submits all of the
facts within its possession concerning the leaving within the
applicable time period referred to in this section, the leaving is
presumed to be without good cause.
   (e) An individual whose employment is terminated under the
compulsory retirement provisions of a collective bargaining agreement
to which the employer is a party shall not be deemed to have
voluntarily left his or her employment without good cause.
   (f) For purposes of this section "spouse" includes a person to
whom marriage is imminent, and "domestic partner" includes a person
to whom a domestic partnership, as described in Section 297 of the
Family Code, is imminent.



1030.1.  (a) If the employment of an individual is terminated due to
his absence from work for a period in excess of 24 hours because of
his incarceration and he is convicted of the offense for which he was
incarcerated or of any lesser included offense, he shall be deemed
to have left his work voluntarily without good cause for the purposes
of Sections 1030, 3701, and 4701. A plea or verdict of guilty
irrespective of whether an order granting probation or other order is
made suspending the imposition of the sentence or whether sentence
is imposed but execution thereof is suspended, or a conviction
following a plea of nolo contendere, is deemed to be a conviction
within the meaning of this section.
   (b) Notwithstanding any other provision of this division, any
ruling made prior to a conviction or other final disposition of the
criminal complaint or accusation by the court as to whether an
individual who is terminated due to his absence from work because of
incarceration voluntarily leaves without good cause may, if no appeal
has been taken from the ruling, for good cause be reconsidered by
the department during the benefit year or extended duration period or
extended benefit period to which the ruling relates. Notice of any
reconsidered ruling shall be given to the employer which received
notice under Section 1030 or 3701 or 4701, and the employer may
appeal therefrom in the manner prescribed in Section 1328 or 3655 or
4655.



1031.  No ruling made under Section 1030 may constitute a basis for
the disqualification of any claimant but a determination by the
department made under the provisions of Section 1328 may constitute a
ruling under Section 1030.


1032.  If it is ruled under Section 1030 or 1328 that the claimant
left the employer's employ voluntarily and without good cause, or
left under one of the following circumstances, benefits paid to the
claimant subsequent to the termination of employment that are based
upon wages earned from the employer prior to the date of the
termination of employment shall not be charged to the account of the
employer, except as provided by Section 1026 or if the department
determines pursuant to Section 1026.1 that the employer's reserve
account should not be credited, unless the employer failed to furnish
the information specified in Section 1030 within the time limit
prescribed in that section or unless that ruling is reversed by a
reconsidered ruling:
   (a) The claimant was discharged by reason of misconduct connected
with his or her work.
   (b) The claimant was a student employed on a temporary basis and
whose employment began within, and ended with his or her leaving to
return to school at the close of, his or her vacation period.
   (c) The claimant left the employer's employ to accompany his or
her spouse or domestic partner to a place or to join him or her at a
place from which it is impractical to commute to the employment, and
to which a transfer of the claimant by the employer is not available.
   (d) The claimant left the employer's employ to protect his or her
family or himself or herself from domestic violence abuse.
   (e) The claimant left the employer's employ to take a
substantially better job.
   (f) The claimant's discharge or quitting from his or her most
recent employer was the result of an irresistible compulsion to use
or consume intoxicants including alcoholic beverages.
   (g) For purposes of this section "spouse" includes a person to
whom marriage is imminent, and "domestic partner" includes a person
to whom a domestic partnership, as described in Section 297 of the
Family Code, is imminent.



1032.5.  (a) Any base period employer may, within 15 days after
mailing of a notice of computation under subdivision (a) of Section
1329, submit to the department facts within its possession disclosing
that the individual claiming benefits is rendering services for that
employer in less than full-time work, and that the individual has
continuously, commencing in or prior to the beginning of the base
period, rendered services for that employer in such less than
full-time work.
   (b) The department shall consider facts submitted under
subdivision (a) of this section together with any information in its
possession and promptly notify the employer of its ruling. If the
department finds that an individual is, under Section 1252,
unemployed in any week on the basis of his or her having less than
full-time work, and that the employer submitting facts under this
section is a base period employer for whom the individual has
continuously, commencing in or prior to the beginning of the base
period, rendered services in such less than full-time work, that
employer's account shall not be charged, except as provided by
Section 1026 or if the department determines pursuant to Section
1026.1 that the employer's reserve account should not be credited,
for benefits paid the individual in any week in which such wages are
payable by that employer to the individual. The employer may appeal
from a ruling or reconsidered ruling to an administrative law judge
within 20 days after mailing or personal service of notice of the
ruling or reconsidered ruling. The 20-day period may be extended for
good cause, which shall include, but not be limited to, mistake,
inadvertence, surprise, or excusable neglect. The director shall be
an interested party to any appeal. The department may for good cause
reconsider any ruling or reconsidered ruling within either five days
after an appeal to an administrative law judge is filed or, if no
appeal is filed, within 20 days after mailing or personal service of
the notice of the ruling or reconsidered ruling.



1033.  The director shall not less frequently than once each year
furnish each employer with an itemized statement of the charges to
the reserve account, and a statement of the reserve account showing
the credits and charges, the net balance of the reserve account and
the contribution rate for the applicable rating period.




1034.  (a) The employer, within 60 days after the date of mailing of
any statement of charges or credits and charges to the reserve
account, or within an additional period not exceeding 60 days which
may for good cause be granted by the director, may file with the
director a written protest on any item shown thereon. The protest
shall set forth the specific grounds on which it is made. No protest
may be made on the ground that a claimant was ineligible for a
benefit payment where the employer was notified as required by this
division and any authorized regulation of the filing of a claim for
the benefits or of a determination of the claimant's eligibility
therefor and the employer failed to file a timely appeal on the
benefit claim, or a final decision of an administrative law judge or
of the appeals board affirmed the payment of the benefits. Except as
to corrections made by the director as provided in Section 1036, the
contribution rate and other items shown on any such statement of
charges or statement of account shall be final unless a protest is
filed within the time prescribed in this section.
   (b) The employer, within 30 days after the last working day of
March, may file a protest on the grounds that the director did not
allow voluntary unemployment insurance contributions to the reserve
account in accordance with Section 976.5.




1035.  The director shall give notice pursuant to Section 1206 to
the employer of his or her action on a protest filed under Section
1034.


1036.  (a) The director shall give notice, pursuant to Section 1206,
to the employer of the correction of any error which the director
finds in any statement of account or statement of charges. Except in
the case where fraud, intent to evade, misrepresentation, or willful
nondisclosure is found, the notice of correction shall be issued
prior to the expiration of the rating period to which a statement
relates.
   (b) Any additional amount of contributions resulting from an
increased contribution rate caused by the correction of any error
that the director finds in any statement of reserve account or
statement of charges shall be assessed within 180 days from the
postmarked date of the notice of correction. These assessments shall
be issued in accordance with Article 8 (commencing with Section
1126). However, these assessments shall become final on the last day
of the calendar month following the calendar quarter in which the
assessment is issued.
   (c) Any overpaid amount of contributions resulting from a reduced
rate caused by the correction of an error that the director finds on
any statement of reserve account or statement of charges shall be
refunded within 180 days of the postmarked date of the notice of
correction. These refunds shall be issued in accordance with Article
9 (commencing with Section 1176).



1037.  If a protest involving the contribution rate is pending when
any contribution to which such rate relates is due, the employer
shall pay the contribution at the rate shown in the statement
furnished by the director. Such a protest, however, shall constitute
a claim for refund under Article 9 of this chapter, and if a final
determination on the protest reduces the contribution rate the amount
of overpayment shall be promptly credited or refunded as provided in
that article.

back to top

1051.  Whenever any employing unit acquires the organization, trade,
or business, or substantially all of the assets thereof, or a
distinct and severable portion of such organization, trade, or
business, of any employer, excepting any assets retained by the
employer incident to the liquidation of his obligations (whether or
not the acquiring employing unit was an "employing unit" within the
meaning of Section 135 prior to such acquisition), and continues such
organization, trade, or business, or such distinct and severable
portion thereof without substantial reduction of personnel resulting
from such acquisition, an application may be made within 90 days of
such acquisition for transfer of reserve account. The application
shall contain the name and address of the predecessor, the date of
acquisition, the name of the successor, the number of employees prior
to and subsequent to the date of acquisition, and, in case of
severable portions, such pay roll data as may be required by the
department to determine the proper amount to be transferred.




1051.5.  To the extent permitted by federal law, Sections 1051,
1052, and 1053 are applicable to acquisitions by a nonprofit
organization which has elected reimbursement financing pursuant to
Section 801 and the director shall transfer the reserve account of
the predecessor employer to the successor nonprofit organization.
Notwithstanding Section 1029, the reserve account shall not be
canceled and the cost of benefits otherwise chargeable to the
organization shall be charged to the reserve account until it is
exhausted.


1052.  Upon receipt of the application the separate account, actual
contribution and benefit experience and payrolls of the predecessor
or that part thereof, as determined by authorized regulations, which
pertains to the organization, trade, or business, or portion thereof
acquired, shall be transferred to the successor employer for the
purpose of determining its rate of contribution after the acquisition
with the same effect for that purpose as if the operations of the
predecessor had at all times been carried on by the successor. The
separate account shall be transferred by the director to the
successor employer and, as of the date of the acquisition, shall
become the separate account or part of the separate account, as the
case may be, of the successor employer, and the benefits thereafter
chargeable to the predecessor employer on account of employment
relating to the transferred organization, trade, or business or
transferred portion thereof prior to the date of the acquisition
shall be charged to the separate account. This section shall not
apply to any acquisition which is determined by the director to have
been made for the purpose of obtaining a more favorable rate of
contributions under Section 977.



1053.  Sections 1051 and 1052 are applicable to applications for
transfer of reserve accounts made after the 90-day period beginning
with the date of acquisition but prior to the cancellation of the
reserve account pursuant to Section 1029 if the reserve account has
not been reacquired by the predecessor on re-entering business or, in
the case of distinct and severable portions, if the predecessor did
not continue in business, but any amendment of the contribution rate
shall be made as of the first day of the calendar quarter next
succeeding the date of the application.



1054.  The provisions of this article requiring a specific
application for transfer of reserve account shall not apply to any
successor who through error or inadvertence continued to file
contribution reports and pay contributions for the account and at the
rate determined by the department to apply to the predecessor
employer, but such reporting and payment shall be deemed to be in
lieu of the application and shall be given the same effect as though
a specific application had been filed during the 90-day period
beginning with the date of acquisition.


1055.  In the event of a denial or granting of an application for
transfer of reserve account, the director shall give notice pursuant
to Section 1206 to the employing unit making such application, and to
the predecessor employing unit to whose reserve account the
application relates, if such predecessor employing unit has continued
in business as an employer.



1056.  The director may prescribe regulations for the establishment,
maintenance, and dissolution of joint accounts by two or more
employers and shall, in accordance with such regulations, upon
application by two or more employers to establish such account or to
merge their several individual accounts in a joint account, maintain
such joint account, as if it constituted a single employer's account.




1057.  Upon dissolution of a joint venture each participating
employer may within 90 days apply for the transfer of his
proportionate share of the reserve account. Upon receipt of the
application the separate account, actual contribution and benefit
experience and pay rolls of such joint venture shall be apportioned
among the employers making such application in the same proportion
that assets are distributed among the participating employers, and
the portion thereof of each shall be transferred to each such
employer for the purpose of determining its rate of contribution
after the dissolution with the same effect for such purpose as if the
applicable portion of the operations of such joint venture had at
all times been carried on by such employer. Such portion of such
separate account shall be transferred by the director to each such
employer and as of the date of such dissolution shall become the
separate account or part of the separate account, as the case may be,
of such employer. The benefits thereafter chargeable to such joint
venture on account of employment relating to such joint venture prior
to the date of such dissolution shall be charged to the separate
accounts of such employers in proportion to their participation in
the joint venture. Any such joint venture shall promptly notify the
director of its dissolution.
   As used in this section only, "employer" includes the successor of
an employer and any subsequent successor employer or employers.



1058.  As used in this article the term "joint venture" means a
separate employing unit which has been organized by two or more
employers to accomplish a contract or project or series of contracts
or projects and which is wholly owned by such employers. As used in
this section only, "employer" means any individual or type of
organization, including any partnership, joint venture, association,
trust, estate, joint stock company, insurance company, corporation
whether domestic or foreign, and the receiver, trustee in bankruptcy,
trustee or successor thereof, and the legal representative of a
deceased person.


1060.  A change in contribution rate caused by a transfer under this
article of all or a portion of the separate account, actual
contribution and benefit experience and pay rolls shall not become
effective earlier than the beginning of the calendar quarter next
succeeding the effective date of the transfer.



1061.  (a) For purposes of this article, the reserve account
attributable to a transferred business shall also be transferred to,
and combined with, the reserve account attributable to the employer
to whom that business is transferred, if both of the following are
satisfied:
   (1) An employer transfers all or part of its business or payroll
to another employer.
   (2) At the time of transfer, both employers are under common
ownership, management, or control.
   (b) This section shall be applied to meet the minimum requirements
contained in any guidance or regulations issued by the United States
Department of Labor.

back to top

1085.  Every employing unit shall keep a true and accurate work
record of:
   (a) All his workers and their status, i.e., employed, on layoff or
leave of absence.
   (b) The wages paid by him to each worker.
   (c) Such other information as the director deems necessary to
proper administration of this division.


1086.  (a) Each employing unit within 15 days after becoming an
employer as defined in this part shall register with the department
on a form prescribed by the department.
   (b) (1) Notwithstanding subdivision (a), any Indian tribe (as
described by subsection (u) of Section 3306 of Title 26 of the United
States Code) that employed one or more workers on or after December
21, 2000, and prior to the operative date of the statute adding this
subdivision at the 2001 portion of the 2001-02 Regular Session of the
Legislature that has not registered with the department by the
operative date of the statute, shall register with the department
within 15 days of that operative date.
   (2) The subject date for employers who register with the
department under the provisions of paragraph (1) shall be December
21, 2000, or the date that employer first hired an employee,
whichever is later.



1087.  Any officer or employee of the Sales and Use Tax Division of
the Board of Equalization who is authorized to accept an application
for a seller's permit under Section 6066 of the Revenue and Taxation
Code or authorized to register a retailer under Section 6226 of the
Revenue and Taxation Code is a duly authorized agent of the
Employment Development Department for purposes of accepting
registration of employers as required in this part.
   The department shall reimburse the Board of Equalization for any
additional costs incurred by reason of services by any of its
officers or employees to the department pursuant to this section.




1088.  (a) (1) Each employer shall file with the director within the
time required by subdivision (a) or (d) of Section 1110 for payment
of employer contributions, a report of contributions, a quarterly
return, and a report of wages paid to his or her workers in the form
and containing any information as the director prescribes. An
electronic funds transfer of contributions pursuant to subdivision
(f) of Section 1110 shall satisfy the requirement for a report of
contributions. The quarterly return shall include the total amount of
wages, employer contributions required under Sections 976 and 976.6,
worker contributions required under Section 984, the amounts
required to be withheld under Section 13020, or withheld under
Section 13028, and any other information as the director shall
prescribe. The report of wages shall include individual amounts
required to be withheld under Section 13020 or withheld under Section
13028.
   (2) (A) In order to enhance efforts to reduce tax fraud and to
reduce the personal income tax reporting burden, effective January 1,
1997, the report of wages shall also include the full first name of
the employee and total wages, as defined in Section 13009, paid to
each employee. This paragraph shall apply to reports of wages for all
periods ending on or before December 31, 1999.
   (B) For all periods beginning on or after January 1, 2000, the
report of wages shall also include total wages subject to personal
income tax, as defined in Section 13009.5, paid to each employee.
   (b) Each employer shall file with the director within the time
required by subdivision (b) or (d) of Section 1110 for payment of
worker contributions, a report of contributions containing the
employer's business name, address, and account number, the total
amount of worker contributions due, and any other information as the
director shall prescribe. The director shall prescribe the form for
the report of contributions. An electronic funds transfer of
contributions pursuant to subdivision (f) of Section 1110 shall
satisfy the requirement for a report of contributions.
   (c) In addition to the report of contributions, quarterly return,
and report of wages required by employers under subdivision (a), an
individual who has elected coverage under subdivision (a) of Section
708 is also required to file a separate report of contributions, and
quarterly return, subject to Part 2 (commencing with Section 2601).
   (d) Any employer making an election under subdivision (d) of
Section 1110 shall submit the report of wages described in
subdivision (a), within the time required for submitting employer
contributions under subdivision (a) of Section 1110.
   (e) (1) In addition to the report of contributions, quarterly
return, and report of wages described in subdivision (a), each
employer shall file with the director an annual reconciliation return
showing the total amount of wages, employer contributions required
under Sections 976 and 976.6, worker contributions required under
Section 984, the amounts required to be withheld under Section 13020
or withheld under Section 13028, and any other information as the
director shall prescribe. This annual reconciliation return shall be
due on the first day of January following the close of the prior
calendar year and shall become delinquent if not filed on or before
the last day of that month.
   (2) This subdivision shall not apply to individuals electing
coverage under Section 708 or 708.5 or employers electing financing
under Section 821.
   (3) The requirement to file the annual reconciliation return for
the prior calendar year under this subdivision shall not apply to the
2012 calendar year and thereafter.
   (f) For purposes of making a report of wages under subdivision
(a), employers who are required under Section 6011 of the Internal
Revenue Code and authorized regulations thereunder to file magnetic
media returns, shall, within 90 days of becoming subject to this
requirement, do one of the following:
   (1) Submit a magnetic media format to the department for approval,
and upon receiving approval from the department, submit any
subsequent reports of wages on magnetic media.
   (2) Establish to the satisfaction of the director that there is a
lack of automation, a severe economic hardship, a current exemption
from submitting magnetic media information returns for federal
purposes, or other good cause for not complying with the provisions
of this subdivision. Approved waivers shall be valid for six months
or longer, at the discretion of the director.
   (g) The Franchise Tax Board shall be allowed access to the
information filed with the department pursuant to this section.
   (h) The requirement in subdivision (a) to file a quarterly return
shall begin with the first calendar quarter of the 2011 calendar
year.



1088.5.  (a) In addition to information reported in accordance with
Section 1088, effective July 1, 1998, each employer shall file, with
the department, the information provided for in subdivision (b) on
new employees.
   (b) Each employer shall report the hiring of any employee who
works in this state and to whom the employer anticipates paying
wages, and also shall report the hiring of any employee who
previously worked for the employer but had been separated from that
prior employment for at least 60 consecutive days.
   (c) (1) This section shall not apply to any department, agency, or
instrumentality of the United States.
   (2) State agency employers shall not be required to report
employees performing intelligence or counterintelligence functions,
if the head of the agency has determined that reporting pursuant to
this section would endanger the safety of the employee or compromise
an ongoing investigation or intelligence mission.
   (d) (1) Employers shall submit a report as described in paragraph
(4) within 20 days of hiring any employee whom the employer is
required to report pursuant to this section.
   (2) Notwithstanding subdivision (a), employers transmitting
reports magnetically or electronically shall submit the report by two
monthly transmissions not less than 12 days and not more than 16
days apart.
   (3) For purposes of this section, an employer that has employees
in two or more states and that transmits reports magnetically or
electronically may designate one state in which the employer has
employees to which the employer will transmit the report described in
paragraph (4). Any employer that transmits reports pursuant to this
paragraph shall notify the Secretary of Health and Human Services in
writing as to which state the employer designates for the purpose of
sending reports.
   (4) The report shall contain the following:
   (A) The name, address, and social security number of the
employees.
   (B) The employer's name, address, state employer identification
number (if one has been issued), and identifying number assigned to
the employer under Section 6109 of the Internal Revenue Code of 1986.
   (C) The first date the employee worked.
   (5) Employers may report pursuant to this section by submitting a
copy of the employee's W-4 form, a form provided by the department,
or any other hiring document transmitted by first-class mail,
magnetically, or electronically.
   (e) For each failure to report the hiring of an employee, as
required and within the time required by this section, unless the
failure is due to good cause, the department may assess a penalty of
twenty-four dollars ($24), or four hundred ninety dollars ($490) if
the failure is the result of conspiracy between the employer and
employee not to supply the required report or to supply a false or
incomplete report.
   (f) (1) On and after January 1, 2013, and before January 1, 2019,
information collected pursuant to this section may be used for the
following purposes:
   (A) Administration of this code, including, but not limited to,
providing employer or employee information to participating members
of the Joint Enforcement Strike Force on the Underground Economy
pursuant to Section 329 for the purposes of auditing, investigating,
and prosecuting violations of tax and cash-pay reporting laws.
   (B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support obligations.
   (C) Administration of employment security and workers'
compensation programs.
   (D) Providing employer or employee information to the Franchise
Tax Board and the State Board of Equalization for the purpose of tax
or fee enforcement.
   (E) Verification of eligibility of applicants for, or recipients
of, the public assistance programs listed in Section 1320b-7(b) of
Title 42 of the United States Code.
   (F) Providing employer or employee information to the Contractors'
State License Board and the State Compensation Insurance Fund for
the purpose of workers' compensation payroll reporting.
   (G) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:
   (i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant to
Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.
   (ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22 (commencing
with Section 100500) of the Government Code, including federal tax
credits and cost-sharing assistance pursuant to the federal Patient
Protection and Affordable Care Act, (Public Law 111-148), as amended
by the federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), where the verification or determination is
directly connected with, and limited to, the administration of the
California Health Benefit Exchange.
   (iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is directly
connected with, and limited to, the administration of the Small
Business Health Options Program.
   (2) On and after January 1, 2019, information collected pursuant
to this section may be used for the following purposes:
   (A) Administration of this code.
   (B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support obligations.
   (C) Administration of employment security and workers'
compensation programs.
   (D) Providing employer or employee information to the Franchise
Tax Board and to the State Board of Equalization for the purposes of
tax or fee enforcement.
   (E) Verification of eligibility of applicants for, or recipients
of, the public assistance programs listed in Section 1320b-7(b) of
Title 42 of the United States Code.
   (F) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:
   (i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant to
Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.
   (ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22 (commencing
with Section 100500) of the Government Code, including federal tax
credits and cost-sharing assistance pursuant to the federal Patient
Protection and Affordable Care Act, (Public Law 111-148), as amended
by the federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), where the verification or determination is
directly connected with, and limited to, the administration of the
California Health Benefit Exchange.
   (iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is directly
connected with, and limited to, the administration of the Small
Business Health Options Program.
   (g) For purposes of this section, "employer" includes a labor
union hiring hall.
   (h) This section shall become operative on July 1, 1998.



1088.6.  Each employer, pursuant to authorized regulations, shall
furnish a written statement to the worker showing the excess of the
worker contributions required with respect to wages included in
Section 927 and subdivision (n) of Section 13009 over the worker
contributions withheld pursuant to Sections 984 and 13020, and shall
file a copy of this statement with the director. If the employer
fails to furnish the statement, as required by this section and
authorized regulations, he or she shall be liable for the excess of
the worker contributions.


1088.8.  (a) Effective January 1, 2001, any service-recipient, as
defined in subdivision (b), who makes or is required to make a return
to the Internal Revenue Service, in accordance with subdivision (a)
of Section 6041A of the Internal Revenue Code (relating to payments
made to a service-provider as compensation for services) shall file
with the department information as required under subdivision (c).
   (b) For purposes of this section:
   (1) "Service-recipient" means any individual, person, corporation,
association, or partnership, or agent thereof, doing business in
this state, deriving trade or business income from sources within
this state, or in any manner in the course of a trade or business
subject to the laws of this state. "Service-recipient" also includes
the State of California or any political subdivision thereof,
including the Regents of the University of California, any charter
city, or any political body not a subdivision or agency of the state,
and any person, employee, department, or agent thereof.
   (2) "Service-provider" means an individual who is not an employee
of the service-recipient for California purposes and who received
compensation or executes a contract for services performed for that
service-recipient within or without the state.
   (c) Each service-recipient shall report all of the following
information to the department, within 20 days of the earlier of first
making payments that in the aggregate equal or exceed six hundred
dollars ($600) in any year to a service-provider, or entering into a
contract or contracts with a service-provider providing for payments
that in the aggregate equal or exceed six hundred dollars ($600) in
any year:
   (1) The full name, address, and social security number of the
service-provider.
   (2) The service-recipient's name, business name, address, and
telephone number.
   (3) The service-recipient's federal employer identification
number, California state employer account number, social security
number, or other identifying number as required by the Employment
Development Department in consultation with the Franchise Tax Board.
   (4) The date the contract is executed, or if no contract, the date
payments in the aggregate first equal or exceed six hundred dollars
($600).
   (5) The total dollar amount of the contract, if any, and the
contract expiration date.
   (d) The department shall retain information collected pursuant to
this section until November 1 following the tax year in which the
contract is executed, or if no contract, the tax year in which the
aggregate payments first equal or exceed six hundred dollars ($600).
   (e) For each failure to fully comply with subdivision (c), unless
the failure is due to good cause, the department may assess a penalty
of twenty-four dollars ($24), or four hundred ninety dollars ($490)
if the failure is the result of conspiracy between the service
recipient and service provider not to supply the required report or
to supply a false or incomplete report.
   (f) Information obtained by the department pursuant to this
section may be released only for purposes of establishing, modifying,
or enforcing child support obligations under Section 17400 of the
Family Code and for child support collection purposes authorized
under Article 5 (commencing with Section 19271) of Chapter 5 of Part
10.2 of the Revenue and Taxation Code, or to the Franchise Tax Board
for tax enforcement purposes or for the administration of this code.
   (g) This section shall become operative on January 1, 2001.



1088.9.  (a) The department shall have the power and duties
necessary to administer the enforcement of employer compliance with
Title 21 (commencing with Section 100000) of the Government Code.
   (b) An eligible employer shall use the opt-out form in the
employee information packet disseminated by the department to create
an option for an eligible employee to note his or her decision to opt
out of utilizing the California Secure Choice Retirement Savings
Program.
   (c) Each eligible employer that, without good cause, fails to
allow its eligible employees to participate in the California Secure
Choice Retirement Savings Program pursuant to Sections 100014 and
100032 of the Government Code, on or before 90 days after service of
notice by the director pursuant to Section 1206 of its failure to
comply, shall pay a penalty of two hundred fifty dollars ($250) per
eligible employee if noncompliance extends 90 days or more after the
notice, and if found to be in noncompliance 180 days or more after
the notice, an additional penalty of five hundred dollars ($500) per
eligible employee.
   (d) The department shall enforce this penalty as part of its
existing investigation and audit function.
   (e) The provisions of this article, the provisions of Article 9
(commencing with Section 1176), with respect to refunds and
overpayments, and the provisions of Article 11 (commencing with
Section 1221), with respect to administrative appellate review shall
apply to the penalty imposed by this section. Penalties collected
pursuant to this section shall be deposited in the contingent fund.
   (f) This section shall become operative six months after the board
notifies the Director of Employment Development that the full
implementation of Title 21 (commencing with Section 100000) of the
Government Code will proceed. Upon receipt of the notification from
the board, the department shall immediately post on its Internet Web
site a notice stating that this section is operative, and the date
that it is first operative.
   (g) If the department participates in the implementation and
administration of the program, it may charge the board a reasonable
fee for costs it incurs for implementing and administering the
program.


1089.  Each employer shall post and maintain in places readily
accessible to individuals in his service such printed statements
concerning benefit rights and other matters as may be prescribed by
authorized regulations. Each employer shall, pursuant to authorized
regulations, supply each individual at the time he becomes unemployed
with copies of printed statements or materials relating to claims
for benefits. Each employer shall immediately notify each employee of
any change in his relationship with said employer. Failure to comply
with this section by an employer shall constitute a misdemeanor.
Such printed statements shall be supplied by the director to each
employer without cost to him.



1090.  (a) Every assignee, receiver, trustee in bankruptcy, or other
representative of an insolvent employing unit, and every
administrator or executor of the estate of a deceased employing unit,
shall within 30 days after assuming office send notice in writing of
the name and address of the employing unit, his own name and
address, and such other information as may be required by the
director.
   (b) Within four months after the mailing of the notice required of
every administrator or executor of the estate of a deceased
employing unit under subdivision (a), the director shall file or
present his claim for contributions, penalty, and interest based upon
wages paid by the employing unit during his lifetime. The
administrator or executor of the estate of a deceased employing unit
shall succeed to all the rights and obligations of the deceased
employing unit under this division.



1092.  Every employing unit shall furnish to the director,
administrative law judge, or deputy, upon demand, a sworn statement
of the matters contained in the records required by Section 1085. If
such records are kept pursuant to contract with a financial
institution as defined in Section 7465 of the Government Code, the
employing unit shall also furnish to the director or the director's
authorized representative an authorization for disclosure of such
account or accounts. The authorization for disclosure shall be that
provided for in Section 7473 of the Government Code. Such records
shall be open to inspection and shall be subject to being copied by
the director or his authorized representative at any time during the
business hours of the employing unit. Any claimant or his authorized
representative at a hearing before a deputy or administrative law
judge or the appeals board shall be supplied with information from
such records to the extent necessary for the proper presentation of
his claim.


1093.  In the event any employer shall fail to keep and furnish to
the director, upon notice, any required records or reports necessary
for a full determination, decision on appeal, or other proper
disposition of any claim for benefits in any proceeding under this
division, within such reasonable time as the director may by rule,
regulation, or procedure prescribe, it shall be conclusively presumed
that the claimant is entitled to the maximum total amount of
benefits payable under this division unless it is established by
other evidence which the director deems sufficient that a lesser
total amount of benefits is properly due and owing to the claimant.
If so established by other evidence upon default of the employer,
after notice, such lesser total amount of benefits thus determined
shall be conclusive. In all cases in which such presumptions shall
apply, if the claimant has earned wages in employment for more than
one employer during his base period, the accounts of the employer or
employers who have properly kept and furnished the required records
or reports shall not be charged with benefits in an amount exceeding
that which such accounts would have been charged had the claimant
been entitled only to benefits determined by the total of the wages
earned and the number of calendar quarters worked for them and all
benefits paid in excess thereof shall be charged solely against the
accounts of the employer or employers who have failed to keep or
furnish the required records or reports.



1094.  (a) Except as otherwise specifically provided in this code,
the information obtained in the administration of this code is
confidential, not open to the public, and shall be for the exclusive
use and information of the director in discharge of his or her
duties.
   (b) The information released to authorized entities pursuant to
other provisions of the code shall not be admissible in evidence in
any action or special proceeding, other than one arising out of the
provisions of this code or one described in Section 1095.
   (c) The information may be tabulated and published in statistical
form for use by federal, state, and local governmental departments
and agencies, and the public, except that the name of the employing
unit or of any worker shall never be divulged in the course of the
tabulation or publication.
   (d) Wages as defined by Section 13009 and amounts required to be
deducted and withheld under Section 13020 shall not be disclosed
except as provided in Article 2 (commencing with Section 19542) of
Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation
Code.
   (e) Any employee or his or her representative may receive his or
her wage information upon written request by the employee. The
information shall be provided without charge.
   (f) Any person who knowingly accesses, uses, or discloses any
confidential information without authorization is in violation of
this section and is guilty of a misdemeanor.



1095.  The director shall permit the use of any information in his
or her possession to the extent necessary for any of the following
purposes and may require reimbursement for all direct costs incurred
in providing any and all information specified in this section,
except information specified in subdivisions (a) to (e), inclusive:
   (a) To enable the director or his or her representative to carry
out his or her responsibilities under this code.
   (b) To properly present a claim for benefits.
   (c) To acquaint a worker or his or her authorized agent with his
or her existing or prospective right to benefits.
   (d) To furnish an employer or his or her authorized agent with
information to enable him or her to fully discharge his or her
obligations or safeguard his or her rights under this division or
Division 3 (commencing with Section 9000).
   (e) To enable an employer to receive a reduction in contribution
rate.
   (f) To enable federal, state, or local government departments or
agencies, subject to federal law, to verify or determine the
eligibility or entitlement of an applicant for, or a recipient of,
public social services provided pursuant to Division 9 (commencing
with Section 10000) of the Welfare and Institutions Code, or Part A
of Title IV of the Social Security Act, where the verification or
determination is directly connected with, and limited to, the
administration of public social services.
   (g) To enable county administrators of general relief or
assistance, or their representatives, to determine entitlement to
locally provided general relief or assistance, where the
determination is directly connected with, and limited to, the
administration of general relief or assistance.
   (h) To enable state or local governmental departments or agencies
to seek criminal, civil, or administrative remedies in connection
with the unlawful application for, or receipt of, relief provided
under Division 9 (commencing with Section 10000) of the Welfare and
Institutions Code or to enable the collection of expenditures for
medical assistance services pursuant to Part 5 (commencing with
Section 17000) of Division 9 of the Welfare and Institutions Code.
   (i) To provide any law enforcement agency with the name, address,
telephone number, birth date, social security number, physical
description, and names and addresses of present and past employers,
of any victim, suspect, missing person, potential witness, or person
for whom a felony arrest warrant has been issued, when a request for
this information is made by any investigator or peace officer as
defined by Sections 830.1 and 830.2 of the Penal Code, or by any
federal law enforcement officer to whom the Attorney General has
delegated authority to enforce federal search warrants, as defined
under Sections 60.2 and 60.3 of Title 28 of the Code of Federal
Regulations, as amended, and when the requesting officer has been
designated by the head of the law enforcement agency and requests
this information in the course of and as a part of an investigation
into the commission of a crime when there is a reasonable suspicion
that the crime is a felony and that the information would lead to
relevant evidence. The information provided pursuant to this
subdivision shall be provided to the extent permitted by federal law
and regulations, and to the extent the information is available and
accessible within the constraints and configurations of existing
department records. Any person who receives any information under
this subdivision shall make a written report of the information to
the law enforcement agency that employs him or her, for filing under
the normal procedures of that agency.
   (1) This subdivision shall not be construed to authorize the
release to any law enforcement agency of a general list identifying
individuals applying for or receiving benefits.
   (2) The department shall maintain records pursuant to this
subdivision only for periods required under regulations or statutes
enacted for the administration of its programs.
   (3) This subdivision shall not be construed as limiting the
information provided to law enforcement agencies to that pertaining
only to applicants for, or recipients of, benefits.
   (4) The department shall notify all applicants for benefits that
release of confidential information from their records will not be
protected should there be a felony arrest warrant issued against the
applicant or in the event of an investigation by a law enforcement
agency into the commission of a felony.
   (j) To provide public employee retirement systems in California
with information relating to the earnings of any person who has
applied for or is receiving a disability income, disability
allowance, or disability retirement allowance, from a public employee
retirement system. The earnings information shall be released only
upon written request from the governing board specifying that the
person has applied for or is receiving a disability allowance or
disability retirement allowance from its retirement system. The
request may be made by the chief executive officer of the system or
by an employee of the system so authorized and identified by name and
title by the chief executive officer in writing.
   (k) To enable the Division of Labor Standards Enforcement in the
Department of Industrial Relations to seek criminal, civil, or
administrative remedies in connection with the failure to pay, or the
unlawful payment of, wages pursuant to Chapter 1 (commencing with
Section 200) of Part 1 of Division 2 of, and Chapter 1 (commencing
with Section 1720) of Part 7 of Division 2 of, the Labor Code.
   (l) To enable federal, state, or local governmental departments or
agencies to administer child support enforcement programs under
Title IV of the federal Social Security Act (42 U.S.C. Sec. 651 et
seq.).
   (m) To provide federal, state, or local governmental departments
or agencies with wage and claim information in its possession that
will assist those departments and agencies in the administration of
the Victims of Crime Program or in the location of victims of crime
who, by state mandate or court order, are entitled to restitution
that has been or can be recovered.
   (n) To provide federal, state, or local governmental departments
or agencies with information concerning any individuals who are or
have been:
   (1) Directed by state mandate or court order to pay restitution,
fines, penalties, assessments, or fees as a result of a violation of
law.
   (2) Delinquent or in default on guaranteed student loans or who
owe repayment of funds received through other financial assistance
programs administered by those agencies. The information released by
the director for the purposes of this paragraph shall not include
unemployment insurance benefit information.
   (o) To provide an authorized governmental agency with any or all
relevant information that relates to any specific workers'
compensation insurance fraud investigation. The information shall be
provided to the extent permitted by federal law and regulations. For
the purposes of this subdivision, "authorized governmental agency"
means the district attorney of any county, the office of the Attorney
General, the Contractors' State License Board, the Department of
Industrial Relations, and the Department of Insurance. An authorized
governmental agency may disclose this information to the State Bar,
the Medical Board of California, or any other licensing board or
department whose licensee is the subject of a workers' compensation
insurance fraud investigation. This subdivision shall not prevent any
authorized governmental agency from reporting to any board or
department the suspected misconduct of any licensee of that body.
   (p) To enable the Director of the Bureau for Private Postsecondary
Education, or his or her representatives, to access unemployment
insurance quarterly wage data on a case-by-case basis to verify
information on school administrators, school staff, and students
provided by those schools who are being investigated for possible
violations of Chapter 8 (commencing with Section 94800) of Part 59 of
Division 10 of Title 3 of the Education Code.
   (q) To provide employment tax information to the tax officials of
Mexico, if a reciprocal agreement exists. For purposes of this
subdivision, "reciprocal agreement" means a formal agreement to
exchange information between national taxing officials of Mexico and
taxing authorities of the State Board of Equalization, the Franchise
Tax Board, and the Employment Development Department. Furthermore,
the reciprocal agreement shall be limited to the exchange of
information that is essential for tax administration purposes only.
Taxing authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
   (r) To enable city and county planning agencies to develop
economic forecasts for planning purposes. The information shall be
limited to businesses within the jurisdiction of the city or county
whose planning agency is requesting the information, and shall not
include information regarding individual employees.
   (s) To provide the State Department of Developmental Services with
wage and employer information that will assist in the collection of
moneys owed by the recipient, parent, or any other legally liable
individual for services and supports provided pursuant to Chapter 9
(commencing with Section 4775) of Division 4.5 of, and Chapter 2
(commencing with Section 7200) and Chapter 3 (commencing with Section
7500) of Division 7 of, the Welfare and Institutions Code.
   (t) To provide the State Board of Equalization with employment tax
information that will assist in the administration of tax programs.
The information shall be limited to the exchange of employment tax
information essential for tax administration purposes to the extent
permitted by federal law and regulations.
   (u) Nothing in this section shall be construed to authorize or
permit the use of information obtained in the administration of this
code by any private collection agency.
   (v) The disclosure of the name and address of an individual or
business entity that was issued an assessment that included penalties
under Section 1128 or 1128.1 shall not be in violation of Section
1094 if the assessment is final. The disclosure may also include any
of the following:
   (1) The total amount of the assessment.
   (2) The amount of the penalty imposed under Section 1128 or 1128.1
that is included in the assessment.
   (3) The facts that resulted in the charging of the penalty under
Section 1128 or 1128.1.
   (w) To enable the Contractors' State License Board to verify the
employment history of an individual applying for licensure pursuant
to Section 7068 of the Business and Professions Code.
   (x) To provide any peace officer with the Division of
Investigation in the Department of Consumer Affairs information
pursuant to subdivision (i) when the requesting peace officer has
been designated by the Chief of the Division of Investigation and
requests this information in the course of and as part of an
investigation into the commission of a crime or other unlawful act
when there is reasonable suspicion to believe that the crime or act
may be connected to the information requested and would lead to
relevant information regarding the crime or unlawful act.
   (y) To enable the Labor Commissioner of the Division of Labor
Standards Enforcement in the Department of Industrial Relations to
identify, pursuant to Section 90.3 of the Labor Code, unlawfully
uninsured employers. The information shall be provided to the extent
permitted by federal law and regulations.
   (z) To enable the Chancellor of the California Community Colleges,
in accordance with the requirements of Section 84754.5 of the
Education Code, to obtain quarterly wage data, commencing January 1,
1993, on students who have attended one or more community colleges,
to assess the impact of education on the employment and earnings of
students, to conduct the annual evaluation of district-level and
individual college performance in achieving priority educational
outcomes, and to submit the required reports to the Legislature and
the Governor. The information shall be provided to the extent
permitted by federal statutes and regulations.
   (aa) To enable the Public Employees' Retirement System to seek
criminal, civil, or administrative remedies in connection with the
unlawful application for, or receipt of, benefits provided under Part
3 (commencing with Section 20000) of Division 5 of Title 2 of the
Government Code.
   (ab) To enable the State Department of Education, the University
of California, the California State University, and the Chancellor of
the California Community Colleges, pursuant to the requirements
prescribed by the federal American Recovery and Reinvestment Act of
2009 (Public Law 111-5), to obtain quarterly wage data, commencing
July 1, 2010, on students who have attended their respective systems
to assess the impact of education on the employment and earnings of
those students, to conduct the annual analysis of district-level and
individual district or postsecondary education system performance in
achieving priority educational outcomes, and to submit the required
reports to the Legislature and the Governor. The information shall be
provided to the extent permitted by federal statutes and
regulations.
   (ac) To provide the Agricultural Labor Relations Board with
employee, wage, and employer information, for use in the
investigation or enforcement of the Alatorre-Zenovich-Dunlap-Berman
Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with
Section 1140) of Division 2 of the Labor Code). The information shall
be provided to the extent permitted by federal statutes and
regulations.
   (ad) (1) To enable the State Department of Health Care Services,
the California Health Benefit Exchange, the Managed Risk Medical
Insurance Board, and county departments and agencies to obtain
information regarding employee wages, California employer names and
account numbers, employer reports of wages and number of employees,
and disability insurance and unemployment insurance claim
information, for the purpose of:
   (A) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal Program, provided pursuant to Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant to
Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this subparagraph.
   (B) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22 (commencing
with Section 100500) of the Government Code, including federal tax
credits and cost-sharing assistance pursuant to the federal Patient
Protection and Affordable Care Act (Public Law 111-148), as amended
by the federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), where the verification or determination is
directly connected with, and limited to, the administration of the
California Health Benefit Exchange.
   (C) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is directly
connected with, and limited to, the administration of the Small
Business Health Options Program.
   (2) The information provided under this subdivision shall be
subject to the requirements of, and provided to the extent permitted
by, federal law and regulations, including Part 603 of Title 20 of
the Code of Federal Regulations.



1096.  Where a number of workers are normally employed in employment
in the course of a year by several employers, such employers, with
the approval of the director, may appoint an agent. The agent may
maintain records and prepare and file returns and reports required
under this division with respect to such workers, including returns
and reports of wages paid to the workers, and may pay the employers'
and workers' contributions levied under this division with respect to
wages paid to such workers and perform such other acts on behalf of
such employers as the director may authorize all in the same manner
as though the agent were the employer of the workers.



1097.  The manner of crediting to each employer the employment
experience of the group of employers who have appointed an agent
pursuant to Section 1096, for the purpose of any classification of
employers made pursuant to this division for the determinations of
future rates of employers' contributions, may be prescribed by
authorized regulations. Employers who operate or do business in more
than one place may, with the approval of the director, appoint a
separate agent in each such place.



1098.  Nothing contained in Sections 1096 or 1097 shall be construed
to make the agent the employer of the workers, or relieve any
employer of his obligations to comply with this division, except to
the extent that his obligations are discharged by the agent.

back to top

1110.  (a) Employer contributions required under Sections 976 and
976.6, the amount of benefits received by any individual pursuant to
this part that is deducted from an award or settlement made by the
employer under the provisions of Section 1382, and, except as
provided by subdivision (b) of this section, worker contributions
required under Section 984 are due and payable on the first day of
the calendar month following the close of each calendar quarter and
shall become delinquent if not paid on or before the last day of that
month.
   (b) Worker contributions required under Section 984 are due and
payable at the same time and by the same method as amounts required
to be withheld under Section 13020 are paid to the department
pursuant to Section 13021, regardless of the amount of accumulated
unpaid liability for worker contributions.
   (c) Employer contributions submitted pursuant to Section 976.5
shall be paid on or before the last working day of March of the
calendar year to which the reduced contribution rate would be
applicable. Any employer whose eligibility for an unemployment
insurance contribution rate determination is redetermined to make
that employer eligible to submit voluntary unemployment insurance
contributions in accordance with Section 976.5, may submit a
voluntary unemployment insurance contribution within 30 days of the
date of notification of the redetermination.
   (d) Except as provided in subdivision (e), any employer described
in Sections 682 and 684 may elect to report and pay employer
contributions required under Sections 976 and 976.6, and worker
contributions required under Section 984, annually. All contributions
are due and payable on the first day of January following the close
of the prior calendar year and shall become delinquent if not paid on
or before the last day of that month. An election under this
subdivision shall be effective the first day of the calendar year in
which it is approved by the department. An election under this
subdivision may not be approved if the employer has an outstanding
return or report delinquency on the records of the department, or an
unpaid amount owed to the department, that is not the subject of a
timely petition for reassessment pending before the appeals board at
the time the election is filed.
   (e) Any employer described in Sections 682 and 684 who pays more
than twenty thousand dollars ($20,000) in wages annually, shall not
be entitled to the election allowed in subdivision (d). If at any
time during the year the total wages paid by an employer electing to
file under subdivision (d) exceeds twenty thousand dollars ($20,000),
the election shall be terminated at the close of that calendar
quarter. In addition to the report of wages due for that quarter, the
employer shall file a return and pay any contributions due for that
portion of the year during which the election was in effect, and
shall pay contributions in accordance with subdivisions (a), (b), and
(c) for the remainder of that year.
   (f) Contributions due pursuant to this section may be submitted by
electronic funds transfer, as defined in Section 13021.5.
Contributions submitted by electronic funds transfer shall be deemed
complete in accordance with paragraph (4) of subdivision (e) of
Section 13021.



1110.1.  (a) Notwithstanding any other provision of law, the
director shall allocate any payment to the department relating to
liability for contributions, withheld personal income tax, penalty
and interest, in accordance with any designation made by the payer at
or before the time the payment is made to the department.
   (b) Notwithstanding any other provision of law, if a payer, at or
before the time a payment is made to the department, does not
designate an obligation to which the payment is to be applied, the
director shall allocate the payment in the following order of
priority:
   (1) Employer contributions required under Sections 976 and 976.6,
worker contributions, and withheld personal income tax, in proportion
to the aggregate amount of such employer contributions, worker
contributions, and withheld personal income tax due.
   (2) Penalties and interest due under this division, and penalties
and interest due based upon withheld personal income tax.
   (c) The director may apply the following standards in making any
allocation under this section:
   (1) First priority may be given to the extinction of obligations
due at the time of payment with respect to which a lien has not been
recorded, in the order inverse to that in which the obligation became
due.
   (2) Second priority may be given to the extinction of obligations
due at the time of payment with respect to which a lien has been
recorded. If more than one lien has been recorded, the obligations
covered by the most recent lien recorded may be extinguished in full
before any payment is allocated to obligations covered by the next
prior lien recorded.



1110.6.  Notwithstanding the provisions of Section 1110, whenever
the liability of an employer for contributions under this division
arises under the terms of a written contract in which such employer
has agreed, for the benefit of another party to such contract, to
assume ultimate liability for contributions under this division in
the event of the default in payment thereof by any other employer
affected by such contract, such contributions shall not become
delinquent and no penalties or interest prescribed by this chapter
shall commence to accrue with respect to such contracting employer,
until after the 30th day following the date of mailing or service of
notice upon him, by the director, of the default of any such other
employer.



1111.  The director for good cause may extend for not to exceed 60
days the time for making a return or report or paying without penalty
any amount required to be paid under this division. Any employer to
whom an extension is granted and who pays the amount required within
the period for which the extension is granted shall pay, in addition
to the contributions, interest at the adjusted annual rate and by the
method established pursuant to Section 19521 of the Revenue and
Taxation Code from the date on which the payment would have been
delinquent without the extension until the date of payment.



1111.5.  If the Governor declares a state of emergency, the director
may extend the time requirements for filing returns or reports
pursuant to Section 1088 and the time requirement for payment of
employer and worker contributions pursuant to Section 1110. The
extension granted by the director pursuant to this section shall
apply only to employers prevented by the conditions giving rise to
the state of emergency from timely filing their returns or reports,
or from timely payment of the taxes due.



1112.  (a) Any employer who without good cause fails to pay any
contributions required of him or her or of his or her workers, except
amounts assessed under Article 8 of this chapter, within the time
required shall pay a penalty of 10 percent of the amount of those
contributions.
   (b) Any employer required to remit payments by electronic funds
transfer pursuant to Section 13021, who without good cause remits
those amounts by means other than electronic funds transfer shall pay
a penalty of 10 percent of the amount of those contributions.



1112.5.  (a) Any employer who without good cause fails to file the
return and reports required by subdivision (a) of Section 1088 and
subdivision (a) of Section 13021 within 60 days of the time required
under subdivision (a) of Section 1110 shall pay a penalty of 10
percent of the amount of contributions and personal income tax
withholding required by this report. This penalty shall be in
addition to the penalties required by Sections 1112 and 1126.
   (b) For purposes of subdivision (a), the amount of contributions
and personal income tax required by the report of contributions shall
be reduced by the amount of any contributions and personal income
tax paid on or before the prescribed payment dates.



1113.  Any employer who fails to pay any contributions required of
him or of his workers, except amounts assessed under Article 8
(commencing with Section 1126), within the time required shall become
liable for interest on such contributions at the adjusted annual
rate and by the method established pursuant to Section 19521 of the
Revenue and Taxation Code from and after the date of delinquency
until paid.



1113.1.  An employer who, through an error caused by excusable
neglect, makes an underpayment of the amount due on a report of
contributions pursuant to subdivision (b) of Section 1088 shall not
be liable for penalty or interest under Sections 1112, 1113, 1127 or
1129 if proper adjustment is made at the time of the filing of the
quarterly report of contributions and quarterly return, for the same
calendar quarter under subdivision (a) of Section 1088 and an
explanation of the error is attached to the report or return.



1114.  (a) Any employer who, without good cause, fails to file
within 15 days after service by the director of notice pursuant to
Section 1206 of a specific written demand therefor, a report of wages
of each of his or her workers required by this division, shall pay
in addition to other amounts required, for each unreported wage item
a penalty of ten dollars ($10).
   (b) Any employer required by this division to file a report of
wages of each of his or her workers on magnetic media as prescribed
by subdivision (f) of Section 1088, who, without good cause, instead
files a report of wages on paper or in another form, shall pay in
addition to other amounts required, for each wage item a penalty of
ten dollars ($10).



1115.  (a) If the director finds that the collection of any
contributions will be jeopardized in any case where an employing unit
is insolvent, or is delinquent in a substantial amount of
contributions due under this division, or is about to discontinue
business at any of its known places of business, or the business is
of a temporary or seasonal nature, the director may, upon giving the
employing unit 10 days' notice pursuant to Section 1206:
   (1) Require payment of contributions with respect to wages paid
from the beginning date of the calendar quarter in which notice is
given to the date designated in the notice.
   (2) Require payment of contributions for reporting periods less
than calendar quarters.
   (b) As used in this section "reporting period" means that period
less than a calendar quarter which is established by the director.
   (c) Contributions required under subdivision (a)(1) of this
section are due and payable on the date designated in the notice and
shall become delinquent if not paid within 10 days of the due date.
   (d) Contributions required under subdivision (a)(2) of this
section are due and payable on the first day of the reporting period
following the close of each reporting period and shall become
delinquent if not paid within 10 days of the due date.
   (e) The employing unit shall file within the time required for
payment of contributions under this section a report or return as
required by Section 1088, in the form and containing the information
that the director prescribes.



1116.  (a) (1) Every employing unit except a domestic or foreign
corporation or a domestic or foreign limited liability company shall,
within 10 days of quitting business, file with the director a final
return and report of wages of its workers, in such form and
containing such information as the director prescribes.
   (2) Every domestic corporation and domestic limited liability
company shall, within 10 days of quitting business or within 10 days
of the commencement of proceedings to windup its affairs and
voluntarily dissolve, whichever expires the earlier, file with the
director a return and a report of wages of its workers, in such form
and containing such information as the director prescribes.
   (3) Every foreign corporation and foreign limited liability
company shall, within 10 days of quitting business or within 10 days
of the surrender of its right to engage in business of this state in
accordance with Section 2112 and subdivision (d) of Section 2114 of
the Corporations Code for foreign corporations or Section 17455 of
the Corporations Code for foreign limited liability companies,
whichever expires the earlier, file with the director a final return
and report of wages of its workers, in such form and containing such
information as the director prescribes.
   (4) As used in this section, "quitting business" does not include
any change in the form or membership of an employing unit if before
and after such change 50 percent or more of the control of management
is held by the same individual, or is held by an individual before
death and after the individual's death by the individual's estate or
heirs.
   (b) Contributions with respect to a return required under
subdivision (a) are due and payable on the first day of the
applicable 10-day period established pursuant to subdivision (a) and
shall become delinquent if not paid within 10 days of the due date.
   (c) The director for good cause may extend for not to exceed 30
days the time for making a return or paying without penalty or
interest any amount required to be paid under this section.




1116.  (a) (1) Every employing unit except a domestic or foreign
corporation or a domestic or foreign limited liability company shall,
within 10 days of quitting business, file with the director a final
return and report of wages of its workers, in such form and
containing such information as the director prescribes.
   (2) Every domestic corporation and domestic limited liability
company shall, within 10 days of quitting business or within 10 days
of the commencement of proceedings to wind up its affairs and
voluntarily dissolve, whichever expires the earlier, file with the
director a return and a report of wages of its workers, in such form
and containing such information as the director prescribes.
   (3) Every foreign corporation and foreign limited liability
company shall, within 10 days of quitting business or within 10 days
of the surrender of its right to engage in business of this state in
accordance with Section 2112 and subdivision (d) of Section 2114 of
the Corporations Code for foreign corporations or Section 17708.08 of
the Corporations Code for foreign limited liability companies,
whichever expires the earlier, file with the director a final return
and report of wages of its workers, in such form and containing such
information as the director prescribes.
   (4) As used in this section, "quitting business" does not include
any change in the form or membership of an employing unit if before
and after such change 50 percent or more of the control of management
is held by the same individual, or is held by an individual before
death and after the individual's death by the individual's estate or
heirs.
   (b) Contributions with respect to a return required under
subdivision (a) are due and payable on the first day of the
applicable 10-day period established pursuant to subdivision (a) and
shall become delinquent if not paid within 10 days of the due date.
   (c) The director for good cause may extend for not to exceed 30
days the time for making a return or paying without penalty or
interest any amount required to be paid under this section.




1117.  If any employer fails to file the annual reconciliation
return described in subdivision (e) of Section 1088 or subdivision
(j) of Section 13021 on or before 30 days after notice has been given
to the employer of his or her failure to file, unless the failure is
due to good cause, the employer, in addition to any other penalties
imposed by this code, shall pay a penalty of one thousand dollars
($1,000), or 5 percent of the employer and worker contributions
required to be reconciled by subdivision (e) of Section 1088,
whichever is less.


1118.  (a) This section applies only to employers who employ
individuals to perform domestic service, as described in Sections 682
and 684.
   (b) Effective July 1, 1997, notwithstanding Section 1088, a
domestic service employer shall be authorized to file the report of
wages required by Section 1088 by telephone. This does not apply to
the filing of Internal Revenue Service Form W-2.
   (c) The department shall notify all domestic service employers of
the availability of the telephone reporting system. A domestic
service employer shall be required to make an election to report by
telephone or by mail. After a domestic service employer elects to
report by telephone, the employer is required to report in that mode
for the remainder of the calendar year. If a domestic service
employer makes this election in the second or subsequent quarter of a
calendar year, the employer shall be required to report by telephone
for the remainder of the calendar year and for all four quarters of
the subsequent calendar year. A domestic service employer who has
elected to report by telephone and who is eligible under this
subdivision to change the reporting mode shall provide 30 days'
notice to the department in order to begin reporting by mail.
   (d) A domestic service employer reporting by telephone shall be
required to provide the department with the employer's account
number, the social security numbers of all employees, and the wages
paid to each employee for the reporting period. The department may
request additional information in order to determine the amount of
wages that are taxable.
   (e) The department shall compute the contributions owed based upon
the wage information reported by the domestic service employer.
   (f) A domestic service employer reporting by telephone shall be
permitted to pay the contributions owed by credit card or charge
card. The payment shall be subject to the State Payment Card Act (Ch.
2.6 (commencing with Section 6160) of Div. 7, Title 1, Gov. C.).
   (g) If a domestic service employer reporting by telephone does not
pay by credit card or charge card, the department shall advise the
employer of the due date for the payment and of any penalties and
interest that will be charged if a payment is late.



1119.  The director shall notify the United States Internal Revenue
Service and the United States Department of Labor of the failure of
any Indian tribe (as described by subsection (u) of Section 3306 of
Title 26 of the United States Code) to make a payment of any amount
required to be paid under this article within 90 days of the date of
a notice specifying the amount due. If the amount due is subsequently
paid by the Indian tribe, the director shall notify the United
States Internal Revenue Service and the United States Department of
Labor of the satisfaction of the liability.

back to top

1126.  If any employing unit fails to make a return or report as
required under this division, the director shall make an estimate
based upon any information in his or her possession or that may come
into his or her possession of the amount of wages paid for employment
in the period or periods for which no return or report was filed and
upon the basis of the estimate shall compute and assess the amounts
of employer and worker contributions payable by the employing unit,
adding thereto a penalty of 10 percent of the amount of
contributions.


1126.1.  (a) If any employing unit fails to register with the
department as required under Section 1086, and the failure is due to
intentional disregard or intent to evade this division or authorized
regulations, a penalty of one hundred dollars ($100) per nonreported
employee shall be added to an assessment issued in accordance with
Section 1126.
   (b) For purposes of this section, the number of nonreported
employees shall be defined as the highest number of employees
determined by the department to have been engaged by the employer
during any single calendar quarter included in the assessment under
Section 1126.


1127.  If the director is not satisfied with any return or report
made by any employing unit of the amount of employer or worker
contributions, he or she may compute the amount required to be paid
upon the basis of facts contained in the return or reports or may
make an estimate upon the basis of any information in his or her
possession or that may come into his or her possession and make an
assessment of the amount of the deficiency. If any part of the
deficiency is due to negligence or intentional disregard of this
division or authorized regulations, a penalty of 10 percent of the
amount of the deficiency shall be added to the assessment.




1127.5.  (a) If the director determines that an individual or entity
that is reporting employee wages pursuant to Section 1088 or other
applicable sections is not the correct employer of the employees
whose wages are reported, the director shall determine the correct
employer and, subject to this section, shall apply the provisions of
this code to the correct employer.
   (b) Upon a determination made under subdivision (a), the director
shall give notice of the determination pursuant to Section 1206 to
both of the following:
   (1) To the individual or entity reporting employee wages of the
determination that the individual or entity is not the correct
employer of the reported employees.
   (2) To the individual or entity determined to be the correct
employer of those reported employees.
   The notice shall contain a statement of the facts and
circumstances upon which the determination was based. An individual
or entity so noticed shall have the right to petition for review of
the determination within 30 days of the notice, as provided in
Section 1222.
   (c) During the pendency of a petition for review pursuant to
subdivision (b), the individual or entity responsible for reporting
employee wages pursuant to Section 1088 or other applicable sections
shall be determined as follows:
   (1) When an individual or entity that has reported employee wages
appeals a director's determination that it is not the correct
employer of the employees whose wages were reported, that individual
or entity shall continue to so report employee wages, provided the
employees in question are still on its payroll, until a decision on
its appeal is final, whether or not the individual or entity
determined to be the correct employer by the director appeals that
determination.
   (2) When the individual or entity determined by the director to be
the correct employer appeals that determination, but the individual
or entity determined not to be the correct employer does not appeal
the director's determination, then the individual or entity
determined to be the correct employer by the director shall report
employee wages from the date it received notification pursuant to
subdivision (b), and, provided the employees in question are still on
its payroll, shall continue to do so at least until a decision on
its appeal is final.
   (d) When a director's determination that an individual or entity
is the correct employer of employees whose wages have been reported
by another individual becomes final:
   (1) The individual or entity so determined to be the correct
employer may be assessed for any underpayment of employer
contributions pursuant to Article 8 (commencing with Section 1126) of
Chapter 4 of Part 1 of Division 1. No assessment shall be issued for
any period prior to the effective date of this section based on
which individual or entity is the correct employer, unless the
correct employer committed fraud in violation of this part.
   (2) The individual or entity which had reported employee wages
prior to the finality of the director's determination of the correct
employer of the employees whose wages were so reported may file a
claim for refund for any overpayment of employer contributions
pursuant to Section 1178. No claim for refund may be filed for any
period prior to the effective date of this section based on which
individual or entity is the correct employer unless the department
has issued an assessment based on fraud pursuant to paragraph (1).



1128.  (a) If the failure of the employing unit to file a return or
report within the time required by this division and authorized
regulations or if any part of the deficiency for which an assessment
is made is due to fraud or an intent to evade this division or
authorized regulations, a penalty of 50 percent of the amount of
contributions assessed shall be added to the assessment. This penalty
is in addition to the penalties provided pursuant to Sections 1126
and 1127.
   (b) An additional penalty of 50 percent of the amount of
contributions assessed shall be added to any assessment that includes
a penalty under subdivision (a), if the employer paid wages and
failed to provide information returns as required under Section 13050
of this code or Section 6041A of the Internal Revenue Code. This
penalty shall be in addition to any penalties under Section 1126 or
1127.


1128.1.  (a) If the director finds that an individual or business
entity has exchanged money on behalf of an employer and the employer
used the cash proceeds from the exchange to conceal the payment of
wages with an intent to evade any provision of this code, the
director shall assess a penalty against the individual or business
entity in an amount equal to 100 percent of any assessed
contributions that were based on the concealed wages. An employing
unit subject to a penalty under Section 1128 shall not be assessed a
penalty under this section for the same violation.
   (b) For purposes of this section, "business entity" means a
partnership, corporation, association, limited liability company, or
Indian tribe (as described by subsection (u) of Section 3306 of Title
26 of the United States Code).
   (c) The penalty shall apply only when there is evidence that the
individual or business entity who exchanged money knew that the
employer intended to use the cash proceeds from the exchange to
conceal the payment of wages and thereby avoid the payment of
contributions or taxes required by this code.



1129.  The amount of each assessment shall bear interest at the
adjusted annual rate and by the method established pursuant to
Section 19521 of the Revenue and Taxation Code from and after the
last day of the month following the close of the calendar quarter, or
from and after the 15th day of the month following the close of the
calendar month, for which the contributions should have been returned
until the date of payment.



1130.  One or more assessments may be made for the amount due for
one or for more than one period and overpayments may be offset
against underpayments.


1131.  The director shall give to the employing unit against whom an
assessment is made a written notice of the assessment pursuant to
Section 1206.


1132.  Except in the case of failure without good cause to file a
return or report, fraud or intent to evade any provision of this
division or authorized regulations, every notice of assessment shall
be made within three years after the last day of the month following
the close of the calendar quarter during which the contribution
liability included in the assessment accrued or within three years
after the deficient return or report is filed, or was due, whichever
period expires the later. An employing unit may waive this limitation
period or may consent to its extension.
   In case of failure without good cause to file a return or report,
every notice of assessment shall be made within eight years after the
last day of the month following the close of the calendar quarter
during which the contribution liability included in the assessment
accrued. An employing unit may waive this limitation period or may
consent to its extension.


1135.  Assessments under this article become delinquent if not paid
on or before the date they become final pursuant to Sections 1036,
1221, 1222, and 1224. There shall be added to the amount of each
delinquent assessment a penalty of 10 percent of the amount thereof
exclusive of interest and penalties.



1136.  If the director finds that an assessment or portion thereof
has been erroneously made, he may cancel the assessment or portion
thereof in the following cases:
   (a) Where no petition for reassessment has been filed.
   (b) Where a petition for reassessment is filed, if the
cancellation is made prior to the mailing of a decision of the
administrative law judge.
   (c) Where a petition for reassessment has been filed and an order
or decision of an administrative law judge or of the appeals board
has been issued on any grounds not on the merits, if the cancellation
is approved by the appeals board.



1137.  (a) If the director finds, in accordance with Section 1137.1,
that the collection of any contributions will be jeopardized by
delay the director shall thereupon make an assessment of those
contributions, served pursuant to Section 1206, noting upon the
assessment that it is a jeopardy assessment levied under this section
and the facts upon which the director finds that collection of
contributions will be jeopardized by delay. The amount of the
assessment shall be immediately delinquent, whether or not the time
otherwise allowed by law or authorized regulations has expired. When
applicable, the penalties provided in Sections 1126, 1127, and 1128,
and interest under Section 1129, shall attach to the amount of the
contributions specified in the jeopardy assessment. Penalties under
Section 1135 shall apply if payment is not made, or security for
payment is not provided, within 30 days of service of a jeopardy
assessment.
   (b) In levying the assessment, the director may demand a deposit
of such security as the director deems necessary to ensure compliance
with this division, including additional security from time to time,
but not more frequently than monthly, in the amount of accumulating
interest. The deposit of sufficient security to ensure compliance
shall stay other collection action by the director while the
assessment is under review. The deposit of the sufficient security
shall not be a condition for the exercise of the review and appeal
rights of the employer pursuant to Sections 1221, 1222, 1223, and
1224. The filing of a petition for reassessment pursuant to Section
1221 shall not stay collection action by the director while the
assessment is under review, but shall stay the sale of all property
other than perishable goods seized by the director pursuant to the
collection action until a final decision from a preliminary hearing
pursuant to subdivision (b) of Section 1221 is issued by the
administrative law judge or the board.



1137.1.  A jeopardy assessment may be made only upon a finding by
the director, based upon probable cause, that any of the following
conditions are met:
   (a) The employing unit is insolvent.
   (b) The employing unit has transferred, or is about to transfer,
assets for less than fair market value, and by so doing has rendered,
or is likely to render, itself insolvent.
   (c) The employing unit has been dissolved.
   (d) Any person liable for the employing unit's contribution, or
any owner, officer, director, partner, or other person having charge
of the affairs of the employing unit has departed or is about to
depart the State of California and that the departure is likely to
deprive the director of a source of payment of the employing unit's
contribution.
   (e) Any person referred to in subdivision (d), or the employing
unit, is secreting assets or is moving, placing, or depositing assets
outside of the state for the purpose of interfering with the orderly
collection of any contribution. The moving, placing, or depositing
of assets outside of the state which constitutes a regular business
practice and which does not in any way deplete the assets of the
employing unit shall not be deemed to be interfering with the orderly
collection of any contribution under this subdivision.
   (f) The assessment to be issued against the employing unit or an
individual includes a penalty under subdivision (a) of Section 1128
or Section 1128.1.



1141.  When an assessment for worker contributions that is made
pursuant to the provisions of this article becomes final against a
farm labor contractor, as defined in Section 1682 of the Labor Code,
which is an employing unit, as defined in Section 135 of this code,
or such farm labor contractor is otherwise delinquent in the payment
of worker contributions, the department shall notify the Labor
Commissioner, in writing, of the amount of the delinquency of such
employing unit, and shall further notify the Labor Commissioner, in
writing, when such delinquency is paid. The notice of assessment and
the amount of any delinquency shall be admissible in evidence in any
action or special proceeding arising out of the provisions of Chapter
3 (commencing with Section 1682) of Part 6 of Division 2 of the
Labor Code.



1141.1.  The director shall notify the United States Internal
Revenue Service and the United States Department of Labor of the
failure of any Indian tribe (as described by subsection (u) of
Section 3306 of Title 26 of the United States Code) to pay within 90
days of the final date of an assessment any amounts assessed pursuant
to the provisions of this article. If the assessment is subsequently
paid by the Indian tribe, the director shall notify the United
States Internal Revenue Service and the United States Department of
Labor of the satisfaction of the liability.



1142.  (a) If the director finds that any employer or any employee,
officer, or agent of any employer, in submitting facts concerning the
termination of a claimant's employment pursuant to Section 1030,
1327, 3654, 3701, 4654, or 4701, willfully makes a false statement or
representation or willfully fails to report a material fact
concerning that termination, the director shall assess a penalty of
an amount not less than 2 nor more than 10 times the weekly benefit
amount of that claimant. The director shall assess this penalty in
the following manner:
   (1) If the director finds that the employer was at fault for
willfully making a false statement or representation or willfully
failing to report a material fact concerning that termination, the
director shall assess the penalty against the employer.
   (2) If the director finds that the agent of the employer was at
fault for willfully making a false statement or representation or
willfully failing to report a material fact concerning that
termination, the director shall assess the penalty against the agent
of the employer.
   (3) If the director finds that the employer and the agent of the
employer were both at fault for willfully making a false statement or
representation or willfully failing to report a material fact
concerning that termination, the director shall assess the penalty
against the employer and also shall assess another penalty against
the agent of the employer.
   (b) If the director finds that any employer or any employee,
officer, or agent of any employer, in submitting a written statement
concerning the reasonable assurance, as defined in subdivision (g) of
Section 1253.3, of a claimant's reemployment, as required by
subdivisions (b), (c), and (i) of Section 1253.3, willfully makes a
false statement or representation or willfully fails to report a
material fact concerning the reasonable assurance of that
reemployment, the director shall assess a penalty of an amount not
less than 2 nor more than 10 times the weekly benefit amount of that
claimant. The director shall assess this penalty in the following
manner:
   (1) If the director finds that the employer was at fault for
willfully making a false statement or representation or willfully
failing to report a material fact concerning the reasonable assurance
of that reemployment, the director shall assess the penalty against
the employer.
   (2) If the director finds that the agent of the employer was at
fault for willfully making a false statement or representation or
willfully failing to report a material fact concerning the reasonable
assurance of that reemployment, the director shall assess the
penalty against the agent of the employer.
   (3) If the director finds that the employer and the agent of the
employer were both at fault for willfully making a false statement or
representation or willfully failing to report a material fact
concerning the reasonable assurance of that reemployment, the
director shall assess the penalty against the employer and also shall
assess another penalty against the agent of the employer.
   (c) (1) This article, Article 9 (commencing with Section 1176) of
this chapter with respect to refunds, and Chapter 7 (commencing with
Section 1701) of this part with respect to collections shall apply to
the assessments provided by this section. Penalties collected under
this section shall be deposited in the contingent fund.
   (2) Notwithstanding Section 1586, additional penalties that are
assessed against an agent of the employer and collected pursuant to
paragraph (3) of subdivision (a) and paragraph (3) of subdivision (b)
shall be available for the purposes specified in Section 1586 upon
appropriation by the Legislature for those purposes.



1142.1.  (a) If the director finds that any employer or any
employee, officer, or agent of any employer, in submitting facts
concerning the termination of a claimant's employment, where the
claimant was performing services for an educational institution, as
described in Section 1253.3, willfully makes a false statement or
representation or willfully fails to report a material fact regarding
any week during which the services were performed, as provided in
Section 1253.3, or any time granted to the claimant for professional
development during his or her employment with that employer, the
director shall assess a penalty against the employer of that claimant
in an amount not less than two, nor more than 10, times the weekly
benefit amount of that claimant.
   (b) This article, Article 9 (commencing with Section 1176) of this
chapter, with respect to refunds, and Chapter 7 (commencing with
Section 1701) of this part, with respect to collections, shall apply
to the assessments provided by this section. Penalties collected
under this section shall be deposited in the Employment Development
Department Contingent Fund.



1143.  If the director finds that any individual falsely certifies
the medical condition of any person in order to obtain disability
insurance benefits, including family temporary disability insurance
benefits, with the intent to defraud, whether for the maker or for
any other person, the director shall assess a penalty against the
individual in the amount of 25 percent of the benefits paid as a
result of the false certification. The provisions of this article,
the provisions of Article 9 (commencing with Section 1176) with
respect to refunds, and the provisions of Chapter 7 (commencing with
Section 1701) with respect to collections shall apply to the
assessments provided by this section. Penalties collected under this
section shall be deposited in the contingent fund.



1144.  (a) Any employer who induces, solicits, or coerces an
employee to file a false or fraudulent claim for benefits shall be
assessed a penalty in an amount equal to 100 percent of the liability
established under Sections 1375 and 1375.1 against the employee.
Amounts collected under this section shall be deposited in the fund
from which the overpayment was made and as prescribed in Section
1375.1, in the following order of priority:
   (1) First to the fund from which the overpayment was made, up to
the total amount of the benefit overpayment liability assessed
against the employee under Section 1375.
   (2) Second to the Benefit Audit Fund, up to the total amount
assessed against the employee under Section 1375.1.
   (b) The reserve account of any employer who is assessed under this
section shall not be relieved of the charges for benefits related to
the fraudulent claim.



1145.  (a) If the director finds that a person or business entity
knowingly advises another person or business entity to violate any
provision of this chapter, the director may assess the greater of:
   (1) A penalty of five thousand dollars ($5,000).
   (2) Ten percent of the combined amount of any resulting
underreporting of contribution, penalties, or interest required by
law.
   (b) For purposes of this section, "business entity" means a
partnership, corporation, association, limited liability company, or
Indian tribe, as described in subsection (u) of Section 3306 of Title
26 of the United States Code, or any other legal entity.

back to top

1176.  If, by reason of an employee receiving wages from more than
one employer during any calendar year, the wages received by him or
her during such year exceed the remuneration upon which contributions
are payable under Section 985, and the sum of the amount of tax
imposed by Section 984 plus the amount of contributions under Section
3260 deducted from such wages exceeds the amount required under this
division, the employee is entitled to a refund or credit of the
amount of the excess.



1176.5.  (a) Except as provided by subdivision (c) of this section,
refunds and credits under Section 1176 shall be claimed pursuant to
Section 17061 of the Revenue and Taxation Code on the personal income
tax return of the claimant for the year in which the wages in excess
of the applicable limitation are received. In no event shall the
credit or refund be made unless the claim is made on a return filed
within three years from the last day prescribed for filing the
return, without regard to any extensions. The director shall transfer
from the Disability Fund to the General Fund an amount equal to the
amount of credits and refunds allowed by the Franchise Tax Board
pursuant to Section 17061 of the Revenue and Taxation Code.
   (b) If the Franchise Tax Board disallows an individual's claim
filed pursuant to subdivision (a), he or she may file a protest and
submit the claim to the director within 30 days of the date of
mailing of the notice of disallowance by the Franchise Tax Board. An
additional 30 days for the filing of the protest may for good cause
be granted by the director.
   (c) If any individual is not required to file a personal income
tax return for a year with the Franchise Tax Board, he or she may,
within three years after the calendar year in which the wages in
excess of the applicable limitation are received, file a claim for
refund or credit under Section 1176 with the director.
   (d) The director shall make refunds from the Disability Fund if he
or she allows a claim under this section. The provisions of Sections
1180, 1222, 1223, 1224, 1241, and 1242 shall apply whenever the
director denies any claim for refund or credit under this section or
affirms the disallowance of a claim for refund or credit by the
Franchise Tax Board.



1177.  Except as provided by subdivision (b) of Section 1178, if the
director determines that any amount of contributions, penalty or
interest has been erroneously or illegally collected he shall set
forth on the records of the department the amount collected in excess
of the amount legally due and the name of the employing unit or
other person by whom it was paid and shall refund the amount to the
employing unit or other person by whom it was paid if the amount does
not include refundable worker contributions. If refundable worker
contributions are involved and a claim has not already been filed the
director shall give notice to such employing unit or other person of
such amount. The excess amount shall be credited on any amounts then
due from or accrued against the employing unit and the balance shall
be refunded to the employing unit or its successor, administrators
or executors.



1177.5.  (a) If the director determines that an overpayment has been
made to the department by an employing unit or the School Employees
Fund because of a reason specified in this subdivision, and the
amount of the overpayment has been reimbursed to the state by the
federal government pursuant to the federal Workforce Investment Act
of 1998, then the director shall credit the employing unit or the
School Employees Fund with the amount of that overpayment, provided
that the director determines that the overpayment was made because of
one of the following:
   (1) An employing unit paid unemployment insurance contributions
after December 31, 1974, based on wages paid to individuals
participating in a public service employment program under the
federal Workforce Investment Act of 1998.
   (2) An employing unit paid amounts after December 31, 1975,
pursuant to Section 803 of this part, for benefits awarded based on
wages paid to individuals participating in a public service
employment program under the federal Workforce Investment Act of
1998.
   (3) Payments were made by the School Employees Fund after December
31, 1975, to the Unemployment Fund pursuant to Section 821 of this
part for benefits awarded based on wages paid to individuals
participating in a public service employment program under the
federal Workforce Investment Act of 1998.
   (b) No overpayment described in subdivision (a) shall be refunded
to an employing unit or to the School Employees Fund.



1178.  (a) A claim for refund or credit may be filed with the
director for any overpayment including, but not limited to, amounts
paid subsequent to the filing for record of a certificate under
Section 1703 or the entry of a judgment under Section 1815.
   (b) No refund shall be made or credit allowed unless a claim
therefor is filed with the director within three years from the last
day of the calendar month following the close of the calendar quarter
for which the overpayment was made or within six months after
assessments made under Article 8 (commencing with Section 1126) of
this chapter become final or within 60 days from the date of
overpayment, whichever period expires the later, but prior to the
expiration of such periods even though no claim is filed the director
on his own initiative shall make refunds pursuant to Section 1177 or
may allow credits.
   (c) No refund of employer or worker contributions, penalties or
interest shall be made or credit for worker contributions allowed
unless the employing unit conforms, within one year after the
allowance of credit or approval of the claim for refund, to
authorized regulations with respect to the refund to workers entitled
thereto of any money deducted by the employing unit under Section
984.
   (d) Following a final decision denying a petition for reassessment
pursuant to Article 11 (commencing with Section 1221), the employing
unit or other person which was a party to the petition may file a
claim for refund upon payment of the amount of the assessment,
including interest and penalties, and thereafter may pursue all
administrative and judicial review rights accorded in Article 11
(commencing with Section 1221) and Article 12 (commencing with
Section 1241).
   (e) No refund of employer contributions paid pursuant to Section
976.5 shall be made unless the payment is made by an employer
described in subdivision (c) of Section 976.5, or the amount paid is
less than or exceeds the amount needed to change the employer's
contribution rate. Refunds permitted under this subdivision shall be
considered an undesignated payment and allocated according to
subdivision (b) of Section 1110.1.



1179.  Every claim for refund or credit shall be in writing and
shall state the specific grounds upon which the claim is founded. A
waiver of any demand against the state or the director on account of
overpayment shall apply when any of the following occur:
   (a) Failure to file a claim with the director within the time
prescribed by Section 1178.
   (b) Failure, after denial of a claim by the director, to file a
petition for review with an administrative law judge within the time
prescribed by Section 1222.
   (c) Failure to file an appeal from an adverse administrative law
judge's decision to the appeals board within the time prescribed by
Section 1224.



1179.5.  If an employing unit pays the amount of contributions,
penalties, and interest assessed under Article 8 (commencing with
Section 1126) of Chapter 4 of Part 1 of this division:
   (a) Before an administrative law judge issues his decision upon a
petition for reassessment filed on such assessment, the payment shall
constitute the filing of a claim for refund, the claim for refund
shall be deemed denied by the director, and the petition for
reassessment shall automatically become a petition to review a denial
of the claim for refund.
   (b) Before the appeals board issues its decision upon an appeal
from the administrative law judge's decision on a petition for
reassessment, the payment shall constitute the filing of a claim for
refund, the claim shall be deemed denied by the director, the denial
shall be deemed affirmed by the administrative law judge, and the
appeal shall automatically become an appeal from an administrative
law judge's decision upholding the director's denial of the claim for
refund.


1180.  The director shall give notice pursuant to Section 1206 to
the claimant whenever he or she denies any claim for refund or credit
in whole or in part.


1180.1.  No claim for refund of amounts paid pursuant to Section
1870 may be filed.



1180.5.  (a) If the director finds that a claim for refund or credit
or portion thereof, including a claim deemed made and denied
pursuant to subdivision (a) of Section 1179.5, has been erroneously
denied, he or she may reverse the denial of the claim or portion
thereof in the following cases:
   (1) Where no petition for review of denial of the claim has been
filed or deemed filed, if the reversal is made prior to the
expiration of the period within which a petition for review may be
filed under Section 1222.
   (2) Where a petition for review of denial of the claim is filed or
deemed filed, if the reversal is made prior to the mailing of a
decision by the administrative law judge.
   (b) The director shall give notice pursuant to Section 1206 of the
reversal of an erroneous denial of a claim or portion thereof under
this section. With respect to that portion of any such claim which
remains denied by the director, the notice of reversal shall also
constitute a notice of denial of such portion and Sections 1222,
1223, 1224, 1241, and 1242 shall apply.



1181.  Interest shall be allowed and paid only to the extent that
interest and penalties collected under this division are available
therefor upon any overpayment of contributions at the adjusted rate
per month, or fraction thereof, established pursuant to Section 19521
of the Revenue and Taxation Code, from the date of overpayment to
the date of the allowance of the refund or credit, but no interest
shall be allowed if the director determines that any overpayment was
made intentionally or by reason of negligence on the part of the
employing unit.


1184.  If any refund or portion thereof is erroneously made, the
director shall assess that amount to the employing unit or other
person to whom the refund was made, together with any interest paid
thereon, but no assessment shall be made with respect to any amount
of worker contributions which the employer has refunded to his or her
employees. The amount of the assessment shall bear interest at the
adjusted annual rate and by the method established pursuant to
Section 19521 of the Revenue and Taxation Code commencing 30 days
after the service of notice of the assessment, if not paid within
that period, until the date of repayment. The director shall give the
employing unit against whom the assessment is made a written notice
of the assessment pursuant to Section 1206.
   The notice shall be given within three years from the date the
refund was made unless the employing unit waives this limitation
period or consents to its extension. Sections 1135, 1136, 1222, 1223,
and 1224 shall apply to assessments made under this section. The
director shall collect the amount of any assessment made under this
section in the same manner that other assessments are collected.



1185.  The director, in collaboration with the Franchise Tax Board,
shall do all of the following:
   (a) Identify taxpayers who have overpaid disability insurance
contributions in any or all tax years from January 1, 1993, to
December 31, 1995, inclusive, and have not received refunds due to
them. For purposes of this subdivision, "taxpayers" means any
individual who filed a FTB Form 540A or 540EZ.
   (b) (1) By October 15, 1997, credit the taxpayers identified in
this subdivision with the amount of any overpaid disability insurance
pursuant to Section 17061 of the Revenue and Taxation Code. If the
amount credited pursuant to this subdivision exceeds any amount then
due from the taxpayer, the difference shall be refunded to the
taxpayer. For taxable years 1993, 1994, and 1995, inclusive,
interest, at the rate established pursuant to Section 19521 of the
Revenue and Taxation Code, shall accrue from April 15 of the tax year
following the overpayment to a date preceding the date of the refund
warrant by not more than 30 days.
   (2) Identify and refund overpayments, with interest, to those
taxpayers who have overpaid disability insurance contributions, and
who have not claimed refunds due to them.
   (3) Interest on overpayments of disability insurance contributions
shall be allowed and paid pursuant to Sections 19340 and 19341 of
the Revenue and Taxation Code.
   (4) For purposes of Section 19340 of the Revenue and Taxation
Code, any overpayment of disability insurance contributions shall be
deemed to have been paid on the last day prescribed for filing the
return under Article 1 (commencing with Section 18501) or Article 2
(commencing with Section 18601) of Chapter 2 of Part 10.2 of the
Revenue and Taxation Code without regard to any extension of time for
filing the return with respect to which the overpayment is allowable
as a credit under Section 17061 of the Revenue and Taxation Code.

back to top

1206.  A notice given under this chapter by the director, an
administrative law judge, or the appeals board:
   (a) May be served personally or by mail, except that service by
mail given by the director shall be made by certified mail in the
following cases:
   (1) Under Sections 1137 and 1221.
   (2) Under Sections 1131, 1142, 1143, 1144, 1184, 1733, and 1735 if
the assessment is in excess of one thousand dollars ($1,000).
   (3) Under Section 1180 if the denial of claim for refund or credit
is in excess of one thousand dollars ($1,000).
   (b) If served by mail, the notice shall be:
   (1) Addressed to the employing unit or person at his or her
address as it appears on the records of the department.
   (2) Complete at the time of deposit in the United States mail.
   (3) Made pursuant to Section 1013 of the Code of Civil Procedure,
excepting service of notice of a hearing before or an order or a
decision of an administrative law judge or of the appeals board in
transfer of reserve account, reassessment and refund matters.
   (c) May be served electronically or by a computerized service if
service by certified mail is not required and the manner of service
is agreed to by the recipient.

back to top

1221.  (a) Within 10 working days of notice of an assessment
pursuant to Section 1137, the employer may file a petition for
reassessment of the jeopardy assessment pursuant to Section 1222.
   (b) Within five days of receiving a petition for reassessment
pursuant to subdivision (a), the board shall notify the employer of
the date and time of a preliminary hearing to determine the
reasonableness of levying the assessment pursuant to Section 1137.
The preliminary hearing shall be held before an administrative law
judge and scheduled not less than 10 nor more than 20 days from the
filing of the petition for reassessment. The administrative law judge
shall issue a decision within 10 days of the scheduled hearing date.
The date scheduled for the preliminary hearing may be continued by
the administrative law judge upon the request of the employer and the
director.
   (c) The burden of proof on the issue of the reasonableness of
levying the assessment pursuant to Section 1137 shall be on the
director. In determining the reasonableness of levying the assessment
pursuant to Section 1137 at the preliminary hearing, the
administrative law judge shall consider and make findings on whether
the director had probable cause under Section 1137.1 to levy the
assessment pursuant to Section 1137. If the administrative law judge
or the board, on appeal from an administrative law judge's decision,
decides that the assessment should not have been levied under Section
1137, the assessment shall automatically become, and shall have the
effect of, an assessment pursuant to Section 1126 or 1127, whichever
is applicable. If the administrative law judge or the board decides
that the assessment was properly levied under Section 1137, this
decision shall be incorporated in any decision rendered following the
hearing pursuant to subdivision (d). The board shall expedite any
appeal from an administrative law judge's decision on a preliminary
hearing.
   (d) All other issues raised by a petition for reassessment filed
pursuant to subdivision (a), including, but not limited to, the
appropriateness of the amount assessed, shall be determined at a
hearing scheduled and held pursuant to Sections 1223 and 1224.



1222.  Within 30 days of service of any notice of assessment or
denial of claim for refund or credit under Section 803, 821, or 991,
or of any notice under Sections 704.1, 1035, 1055, 1127.5, 1131,
1142, 1143, 1144, 1180, 1184, 1733, and 1735, any employing unit or
other person given the notice, or any employing unit affected by a
granting or denial of a transfer of reserve account, may file a
petition for review or reassessment with an administrative law judge.
The administrative law judge may for good cause grant an additional
30 days for the filing of a petition. If a petition for reassessment
is not filed within the 30-day period, or within the additional
period granted by the administrative law judge, an assessment is
final at the expiration of the period. If a petition for review of a
termination of elective coverage under Section 704.1 is not filed
within the 30-day period, or within the additional period granted by
the administrative law judge, the termination is final at the
expiration of the period. If the director fails to serve notice of
his or her action within 60 days after a claim for refund or credit
is filed, the person or employing unit may consider the claim denied
and file a petition with an administrative law judge.



1223.  If any petition is filed under this article within the time
and meeting requirements prescribed, an administrative law judge
shall review the matter and, if requested by the petitioner, shall
grant a hearing. A hearing is not required on a petition if a prior
hearing has been afforded the petitioner involving the same issues,
but regardless of any prior proceedings, if the petitioner files an
affidavit setting forth new and additional evidence in support of his
or her petition, an administrative law judge may grant an additional
hearing. The administrative law judge shall give at least 20 days'
notice of the time and place of the hearing on a petition by
delivering or mailing the notice to the petitioner and to the
director. The time of notice may be shortened with the consent of the
parties. The administrative law judge shall render a decision in the
matter and may decrease or increase the amount of any assessment
under review. Every employing unit or person which is a party to the
petition and the director shall be promptly notified of the
administrative law judge's decision, together with his or her reasons
therefor.



1224.  (a) The petitioner or the director may, within 30 days after
the service of notice of an administrative law judge's decision under
this article, file an appeal to the appeals board. The appeals board
may for good cause extend the appeal period. If the administrative
law judge fails to serve notice of the decision on a petition for
review of denial of a claim for refund or credit within 60 days after
a petition is filed, the petitioner may consider the petition denied
and file an appeal with the appeals board. If an appeal is not filed
within the 30-day period or within the additional period granted by
the appeals board:
   (1) The decision of the administrative law judge upon the petition
is final in every case at the expiration of the period.
   (2) Any assessment involved is final at the expiration of the
period except that in cases where a decision of the administrative
law judge requires an adjustment of an assessment by granting a
portion of a petition or by increasing an assessment, the assessment
is final 30 days after service upon the petitioner by the director of
a statement of amounts due setting forth the adjusted liability
pursuant to the decision.
   (b) In the event of an appeal to the appeals board, it may
decrease or increase the amount of any assessment involved. In cases
where an order or decision of the appeals board requires an
adjustment of an assessment by granting a portion of a petition or by
increasing an assessment, the order or decision and the assessment
become final 30 days after service upon the petitioner by the
director of a statement of amounts due setting forth the adjusted
liability pursuant to the order or decision of the appeals board. In
all other cases, the order or decision of the appeals board and any
assessment become final 30 days after service upon the petitioner of
notice of the order or decision.