AB 1245: Unemployment insurance: electronic reporting and funds transfers.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-08-17
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill, beginning on January 1, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided. The bill, beginning on January 1, 2018, would extend the application of these electronic filing and fund transfer requirements to all employers. The bill would authorize the granting of a waiver from these requirements, as specified. The bill would impose a penalty of $50 on those employers who fail to file a quarterly return electronically without good cause, and would, until January 1, 2019, exempt certain employers timely nonelectronic filings from that penalty.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically and would, on and after January 1, 2017, and until January 1, 2019, exempt certain employers from those penalties.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2017, would require an employer subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified.
The bill would also make related conforming changes.
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill, beginning on January 1, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided. The bill, beginning on January 1, 2018, would extend the application of these electronic filing and fund transfer requirements to all employers. The bill would authorize the granting of a waiver from these requirements, as specified. The bill would impose a penalty of $50 on those employers who fail to file a quarterly return electronically without good cause, and would, until January 1, 2019, exempt certain employers timely nonelectronic filings from that penalty.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically and would, on and after January 1, 2017, and until January 1, 2019, exempt certain employers from those penalties.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2017, would require an employer subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified.
The bill would also make related conforming changes.
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill, beginning on January 1, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided. The bill, beginning on January 1, 2018, would extend the application of these electronic filing and fund transfer requirements to all employers. The bill would authorize the granting of a waiver from these requirements, as specified. The bill would impose a penalty of $50 on those employers who fail to file a quarterly return electronically without good cause, and would would, until January 1, 2019, exempt certain employers timely nonelectronic filings from that penalty.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically and would, on and after January 1, 2017, and until January 1, 2019, exempt certain employers from those penalties.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2017, would require an employer subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified.
The bill would also make related conforming changes.
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill, would beginning on January 1, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided. The bill, beginning on January 1, 2018, would extend the application of these electronic filing and fund transfer requirements to all employers. The bill would authorize the granting of a waiver from these requirements, as specified. The bill would impose a penalty of $50 on those employers who fail to file a quarterly return electronically without good cause, and would until January 1, 2019, exempt certain employers timely nonelectronic filings from that penalty.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically. electronically and would, on and after January 1, 2017, and until January 1, 2019, exempt certain employers from those penalties.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2017, would require an employer subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified.
The bill would also make related conforming changes.
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill would, bill, would beginning on January 1, 2016, and except as provided, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided. The bill, beginning on January 1, 2018, would extend the application of these electronic filing and transfer requirements to all employers beginning on January 1, 2017. employers. The bill would authorize the granting of a waiver from these requirements, as specified.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay its the contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically or contributions by electronic funds transfer. electronically.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2016, 2017, would require an employer who is subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified. The bill would require the Department of Employment Development to notify certain employers of these requirements, as specified.
The bill would also make related conforming changes.
(1)Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, to the Director of Employment Development and to make contributions for unemployment insurance premiums. Existing law provides that an electronic funds transfer of contributions satisfies the report of contributions filing requirements.
This bill would, beginning on January 1, 2016, and except as provided, require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer. The bill would extend the application of these electronic filing and transfer requirements to all employers beginning on January 1, 2017. The bill would authorize the granting of a waiver from these requirements, as specified.
(2)Existing law imposes a 15% penalty on an employer who fails to timely pay its contributions and imposes a $20 penalty for each unreported wage item.
This bill would extend those penalties to an employer, subject to the above-described electronic filing requirements, who fails to file the required reports electronically or contributions by electronic funds transfer.
(3)Existing law requires employers to withhold income taxes each calendar quarter, file a withholding report, a quarterly return, a report of wages, and pay over the taxes required to be withheld.
This bill, beginning on January 1, 2016, would require an employer who is subject to the above-described electronic filing requirements to remit the withheld taxes by electronic funds transfer. The bill would authorize a waiver from these requirements, as specified. The bill would require the Department of Employment Development to notify certain employers of these requirements, as specified.
The bill would also make related conforming changes.
(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 the employers 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 employers 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)For purposes of making a report of wages under subdivision (a), employers that 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)File any subsequent reports of wages electronically.
(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 or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for one year or longer, at the discretion of the director.
(f)The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
(g)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(h)(1)Notwithstanding subdivision (e), effective January 1, 2017, an employer with 10 or more employees shall file the report of contributions, quarterly return, and report of wages electronically.
(2)Notwithstanding subdivision (e), effective January 1, 2018, all employers shall file the report of contributions, quarterly return, and report of wages electronically.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for one year or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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)An 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. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
(g)(1)Notwithstanding subdivision (f), effective on and after January 1, 2017, an employer with 10 or more employees shall remit the contributions and withholdings by electronic funds transfer.
(2)Notwithstanding subdivision (f), effective on and after January 1, 2018, all employers shall remit the contributions and withholdings by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for one year or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically who without good cause remits those amounts by means other than electronic shall pay a penalty of 15 percent of the amount of those contributions.
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under Section 13021, who remits those amounts within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1112.1 is added to the Unemployment Insurance Code, to read:1112.1.(a) An employer who is required to file a quarterly return electronically pursuant to Section 1088 and without good cause fails to file a quarterly return electronically shall pay a penalty of fifty dollars ($50), in addition to any other penalties imposed by this code.
(b)Notwithstanding subdivision (a), on and after January 1, 2017, and before January 1, 2019, an employer required to file a quarterly return electronically who files a quarterly return within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (a).
SEC. 5.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (e) or (h) of Section 1088, who, without good cause, instead files a report of wages by means other than electronic, shall pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to file a report of wages, excluding employers previously required to file a report of wages under subdivision (e) of Section 1088, who files a report of wages within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 6.Section 13002 of the Unemployment Insurance Code is amended to read:13002.The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division:
(a)Sections 301, 305, 306, 310, 311, 312, 317, and 318, relating to general administrative powers of the department.
(b)Sections 403 to 413, inclusive, Section 1336, and Chapter 8 (commencing with Section 1951) of Part 1 of Division 1, relating to appeals and hearing procedures.
(c)Sections 1110.6, 1111, 1111.5, 1112, 1112.1, 1113, 1113.1, 1114, 1115, 1116, and 1117, relating to the making of returns or the payment of reported contributions.
(d)Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments.
(e)Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments.
(f)Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice.
(g)Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review.
(h)Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review.
(i)Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections.
(j)Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations.
SEC. 7.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on and after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for filing federal income taxes by Section 6302 of the Internal Revenue Code, relating to mode or time of collection, and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(2)Effective January 1, 2017, paragraph (1) shall not apply to an employer subject to the electronic filing requirements of Section 1088. Effective January 1, 2017, an employer subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs.
(3)Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
(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 the employers 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 employers 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)For purposes of making a report of wages under subdivision (a), employers that 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)File any subsequent reports of wages electronically.
(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 or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for one year or longer, at the discretion of the director.
(f)The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
(g)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(h)(1)Notwithstanding subdivision (e), effective January 1, 2017, an employer with 10 or more employees shall file the report of contributions, quarterly return, and report of wages electronically.
(2)Notwithstanding subdivision (e), effective January 1, 2018, all employers shall file the report of contributions, quarterly return, and report of wages electronically.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for one year or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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)An 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. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
(g)(1)Notwithstanding subdivision (f), effective on and after January 1, 2017, an employer with 10 or more employees shall remit the contributions and withholdings by electronic funds transfer.
(2)Notwithstanding subdivision (f), effective on and after January 1, 2018, all employers shall remit the contributions and withholdings by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for one year or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically who without good cause remits those amounts by means other than electronic shall pay a penalty of 15 percent of the amount of those contributions.
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under Section 13021, who remits those amounts within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1112.1 is added to the Unemployment Insurance Code, to read:1112.1.(a) An employer who is required to file a quarterly return electronically pursuant to Section 1088 and without good cause fails to file a quarterly return electronically shall pay a penalty of fifty dollars ($50), in addition to any other penalties imposed by this code.
(b)Notwithstanding subdivision (a), on and after January 1, 2017, and before January 1, 2019, an employer required to file a quarterly return electronically who files a quarterly return within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (a).
SEC. 5.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (e) or (h) of Section 1088, who, without good cause, instead files a report of wages by means other than electronic, shall pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to file a report of wages, excluding employers previously required to file a report of wages under subdivision (e) of Section 1088, who files a report of wages within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 6.Section 13002 of the Unemployment Insurance Code is amended to read:13002.The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division:
(a)Sections 301, 305, 306, 310, 311, 312, 317, and 318, relating to general administrative powers of the department.
(b)Sections 403 to 413, inclusive, Section 1336, and Chapter 8 (commencing with Section 1951) of Part 1 of Division 1, relating to appeals and hearing procedures.
(c)Sections 1110.6, 1111, 1111.5, 1112, 1112.1, 1113, 1113.1, 1114, 1115, 1116, and 1117, relating to the making of returns or the payment of reported contributions.
(d)Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments.
(e)Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments.
(f)Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice.
(g)Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review.
(h)Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review.
(i)Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections.
(j)Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations.
SEC. 7.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on and after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for filing federal income taxes by Section 6302 of the Internal Revenue Code, relating to mode or time of collection, and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(2)Effective January 1, 2017, paragraph (1) shall not apply to an employer subject to the electronic filing requirements of Section 1088. Effective January 1, 2017, an employer subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs.
(3)Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
(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 the employers 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 employers 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)For purposes of making a report of wages under subdivision (a), employers that 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)File any subsequent reports of wages electronically.
(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 or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for one year or longer, at the discretion of the director.
(f)The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
(g)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(h)(1)Notwithstanding subdivision (e), effective January 1, 2017, an employer with 10 or more employees shall file the report of contributions, quarterly return, and report of wages electronically.
(2)Notwithstanding subdivision (e), effective January 1, 2018, all employers shall file the report of contributions, quarterly return, and report of wages electronically.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for one year or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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)An 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. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
(g)(1)Notwithstanding subdivision (f), effective on and after January 1, 2017, an employer with 10 or more employees shall remit the contributions and withholdings by electronic funds transfer.
(2)Notwithstanding subdivision (f), effective on and after January 1, 2018, all employers shall remit the contributions and withholdings by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for six months one year or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically who without good cause remits those amounts by means other than electronic shall pay a penalty of 15 percent of the amount of those contributions.
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under Section 13021, who remits those amounts within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b). This subdivision shall become inoperative on and after January 1, 2019.
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1112.1 is added to the Unemployment Insurance Code, to read:1112.1.(a) An employer who is required to file a quarterly return electronically pursuant to Section 1088 and without good cause fails to file a quarterly return electronically shall pay a penalty of fifty dollars ($50), in addition to any other penalties imposed by this code.
(b)Notwithstanding subdivision (a), on and after January 1, 2017, and before January 1, 2019, an employer required to file a quarterly return electronically who files a quarterly return within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (a). This subdivision shall become inoperative on and after January 1, 2019.
SEC. 5.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (f) or (i) (e) or (h) of Section 1088, who, without good cause, instead files a report of wages by means other than electronic, shall pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to remit payments electronically, file a report of wages, excluding employers previously required to remit payments by electronic funds transfer file a report of wages under subdivision (f) (e) of Section 1088, who files a report of wages within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b). This subdivision shall become inoperative on and after January 1, 2019.
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 6.Section 13002 of the Unemployment Insurance Code is amended to read:13002.The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division:
(a)Sections 301, 305, 306, 310, 311, 312, 317, and 318, relating to general administrative powers of the department.
(b)Sections 403 to 413, inclusive, Section 1336, and Chapter 8 (commencing with Section 1951) of Part 1 of Division 1, relating to appeals and hearing procedures.
(c)Sections 1110.6, 1111, 1111.5, 1112, 1112.1, 1113, 1113.1, 1114, 1115, 1116, and 1117, relating to the making of returns or the payment of reported contributions.
(d)Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments.
(e)Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments.
(f)Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice.
(g)Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review.
(h)Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review.
(i)Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections.
(j)Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations.
SEC. 7.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on and after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for filing federal income taxes by Section 6302 of the Internal Revenue Code, relating to mode or time of collection, and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(2)Effective January 1, 2017, paragraph (1) shall not apply to an employer subject to the electronic filing requirements of Section 1088. Effective January 1, 2017, an employer subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs.
(3)Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
(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 the employees employers 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 employers 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)(1)Except as provided in paragraph (2), for
(e)For purposes of making a report of wages under subdivision (a), employers that 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:
(A)
(1)File any subsequent reports of wages electronically.
(B)
(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 or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for six months one year or longer, at the discretion of the director.
(2)The requirement to file the report of wages pursuant to this subdivision shall not apply to an employer that is required to file electronically pursuant to subdivision (i).
(g)
(f)The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
(h)
(g)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(i)
(h)(1)Effective Notwithstanding subdivision (e), effective January 1, 2017, except as provided in subdivision (f), 2017, an employer with 10 or more employees shall file the report of contributions, quarterly return, and report of wages electronically.
(2)Effective Notwithstanding subdivision (e), effective January 1, 2018, except as provided in subdivision (f), 2018, all employers shall file the report of contributions, quarterly return, and report of wages electronically.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for six months one year or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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 shall 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)An 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)Except as required in subdivision (g), contributions Contributions due pursuant to this section may be submitted by electronic funds transfer. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
(g)(1)Effective Notwithstanding subdivision (f), effective on and after January 1, 2017, an employer with 10 or more employees shall remit the contributions and withholdings by electronic funds transfer.
(2)Beginning Notwithstanding subdivision (f), effective on and after January 1, 2018, all employers shall remit the contributions and withholdings by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or other good cause. An approved waiver shall be valid for six months or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically who without good cause remits those amounts by means other than electronic shall pay a penalty of 15 percent of the amount of those contributions.
(c)Notwithstanding subdivision (b), on and after January 1, 2017, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under Section 13021, who remits those amounts within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b). This subdivision shall become inoperative on and after January 1, 2019.
(c)
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1112.1 is added to the Unemployment Insurance Code, to read:1112.1.(a) An employer who is required to file a quarterly return electronically pursuant to Section 1088 and without good cause fails to file a quarterly return electronically shall pay a penalty of fifty dollars ($50), in addition to any other penalties imposed by this code.
(b)Notwithstanding subdivision (a), on and after January 1, 2017, an employer required to file a quarterly return electronically who files a quarterly return within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (a). This subdivision shall become inoperative on and after January 1, 2019.
SEC. 4.SEC. 5.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (f) or (i) of Section 1088, who, without good cause, instead files a report of wages by means other than electronic, shall pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)Notwithstanding subdivision (b), on and after January 1, 2017, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under subdivision (f) of Section 1088, who files a report of wages within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b). This subdivision shall become inoperative on and after January 1, 2019.
(c)
(d)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 6.Section 13002 of the Unemployment Insurance Code is amended to read:13002.The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division:
(a)Sections 301, 305, 306, 310, 311, 312, 317, and 318, relating to general administrative powers of the department.
(b)Sections 403 to 413, inclusive, Section 1336, and Chapter 8 (commencing with Section 1951) of Part 1 of Division 1, relating to appeals and hearing procedures.
(c)Sections 1110.6, 1111, 1111.5, 1112, 1112.1, 1113, 1113.1, 1114, 1115, 1116, and 1117, relating to the making of returns or the payment of reported contributions.
(d)Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments.
(e)Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments.
(f)Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice.
(g)Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review.
(h)Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review.
(i)Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections.
(j)Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations.
SEC. 5.SEC. 7.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on or and after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for filing federal income taxes by Section 6302 of the Internal Revenue Code Code, relating to mode or time of collection, and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(2)Effective January 1, 2017, paragraph (1) shall not apply to an employer subject to the electronic filing requirements of Section 1088. Effective January 1, 2017, an employer subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs.
(3)Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
(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 the employees 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 employers 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)(1)Except as provided in paragraph (2), for purposes of making a report of wages under subdivision (a), employers who that 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:
(A)File any subsequent reports of wages electronically.
(B)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 or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for six months or longer, at the discretion of the director.
(2)The requirement to file the report of wages pursuant to this subdivision shall not apply to an employer who that is required to file electronically pursuant to subdivision (i).
(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.
(i)(1)Effective January 1, 2016, 2017, except as provided in subdivision (f), an employer with 10 or more employees shall file the report of contributions, the quarterly return, and report of wages paid, and annual reconciliation return electronically.
(2)Effective January 1, 2017, 2018, except as provided in subdivision (f), all employers shall file the report of contributions, quarterly return, and report of wages paid, and annual reconciliation return electronically.
(4)
(3)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that the there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or for other good cause. An approved waiver shall be valid for six months or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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 shall 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)An 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)Except as required in subdivision (g), contributions due pursuant to this section may be submitted by electronic funds transfer. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
(g)(1)Effective January 1, 2016, 2017, an employer with 10 or more employees shall remit the contributions and benefit amounts withholdings by electronic funds transfer.
(2)Beginning on January 1, 2017, 2018, all employers shall remit the contributions and benefit amounts withholdings by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a temporary waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that the there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or for other good cause. An approved waiver shall be valid for six months or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically pursuant to paragraph (2) of subdivision (d) of Section 13021 or by electronic funds transfer pursuant to paragraph (1) of subdivision (d) of Section 13021, who without good cause remits those amounts by means other than electronic funds transfer shall pay a penalty of 15 percent of the amount of those contributions.
(c)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (f) or (g) (i) of Section 1088, who, without good cause, instead files a report of wages by means that are not other than electronic, shall pay pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 5.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on or after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for federal income taxes by Section 6302 of the Internal Revenue Code and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(2)Effective January 1, 2016, 2017, paragraph (1) shall not apply to an employer who is subject to the electronic filing requirements of Section 1088. Effective January 1, 2016, 2017, an employer who is subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before each October 31, beginning October 31, 2016, notify employers who will be subject to the requirements of this paragraph.
(3)Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
(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 employers 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(1)Except as provided in paragraph (2), 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)
(A)Submit a magnetic media format to the department for approval, and upon receiving approval from the department, submitFile any subsequent reports of wages on magnetic media. electronically.
(2)
(B)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 or electronic 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.
(2)The requirement to file the report of wages pursuant to this subdivision shall not apply to an employer who is required to file electronically pursuant to subdivision (i).
(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.
(i)(1)Effective January 1, 2016, except as provided in subdivision (f), an employer with 10 or more employees shall file the quarterly return, report of wages paid, and annual reconciliation return electronically.
(2)Effective January 1, 2017, except as provided in subdivision (f), all employers shall file the quarterly return, report of wages paid, and annual reconciliation return electronically.
(4)Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that the there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or for good cause. An approved waiver shall be valid for six months or longer, at the discretion of the director.
SEC. 2.Section 1110 of the Unemployment Insurance Code is amended to read: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 shall 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 An 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 Except as required in subdivision (g), 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.
(g)(1)Effective January 1, 2016, an employer with 10 or more employees shall remit the contributions and benefit amounts by electronic funds transfer.
(2)Beginning on January 1, 2017, all employers shall remit the contributions and benefit amounts by electronic funds transfer.
(3)Notwithstanding paragraphs (1) and (2), an employer may request a temporary waiver from the electronic funds transfer requirement of this subdivision. The department may grant the waiver when the employer has established to the satisfaction of the director that the there is a lack of automation, a severe economic hardship, a current exemption from filing electronically for federal purposes, or for good cause. An approved waiver shall be valid for six months or longer, at the discretion of the director.
(h)For purposes of this section, electronic funds transfer shall have the same meaning as in Section 13021.5.
SEC. 3.Section 1112 of the Unemployment Insurance Code is amended to read: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, (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
(b)Any employer required to remit payments electronically pursuant to paragraph (2) of subdivision (d) of Section 13021 or by electronic funds transfer pursuant to paragraph (1) of subdivision (d) of Section 13021, who without good cause remits those amounts by means other than electronic funds transfer shall pay a penalty of 15 percent of the amount of those contributions.
(c)The changes made to this section by the act adding this subdivision Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 4.Section 1114 of the Unemployment Insurance Code is amended to read: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 twenty dollars ($20).
(b)Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (f) or (g) of Section 1088, who, without good cause, instead files a report of wages on paper or in another form, by means that are not electronic, shall pay in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
(c)The changes made to this section by the act adding this subdivision Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
SEC. 5.Section 13021 of the Unemployment Insurance Code is amended to read:13021.(a)Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as prescribed described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as prescribed described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
(b)Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110.
(c)(1)Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
(2)Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Average Rate of Interest | |
Greater than or equal to 9 percent: | $75 |
Less than 9 percent, but greater than or equal to |
|
Less than 7 percent, but greater than or equal to |
|
Less than 4 percent: | 500 |
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning prior to January 1, 1995, if in the 12-month period ending June 30 of the prior year the cumulative average payment made pursuant to this division or Section 1110, for eight-month periods, as defined under Section 6302 of the Internal Revenue Code and regulations thereunder, was fifty thousand dollars ($50,000) or more, the employer shall remit the total amount of income tax withheld within three banking days following the close of each eight-month period, as described by Section 6302 of the Internal Revenue Code and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required to make payment by electronic funds transfer of these requirements.
(2)
(d)(1)Notwithstanding subdivisions (a) and (c), for calendar years beginning on or after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as described under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of business days as specified for federal income taxes by Section 6302 of the Internal Revenue Code and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements.
(3)
(2)Effective January 1, 2016, paragraph (1) shall not apply to an employer who is subject to the electronic filing requirements of Section 1088. Effective January 1, 2016, an employer who is subject to the electronic filing requirements of Section 1088 shall remit the total amount of income tax withheld within the number of business days specified in Section 6302 of the Internal Revenue Code and the regulations adopted thereunder for filing federal income taxes. Payment shall be deemed complete on the date the electronic funds transfer is initiated if settlement to the states demand account occurs on or before the business day following the date the transfer is initiated. If settlement to the states demand account does not occur on or before the business day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before each October 31, beginning October 31, 2016, notify employers who will be subject to the requirements of this paragraph.
(3)Notwithstanding paragraph (2), paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the states demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
(4)Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amounts amount paid in excess of fifty thousand dollars ($50,000) or twenty thousand dollars ($20,000), as stated in paragraphs paragraph (1) and (2), respectively, were was the result of an unprecedented occurrence for that employer, and were was not representative of the employers cumulative average payment in prior years.
(5) A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
(e)An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
(1)The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
(2)If approved, the election shall be effective on the date specified in the notification to the employer of approval.
(3)The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
(4)Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
(f)Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
(g)The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
(h)An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
(i)For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
(j)(1)In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information 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)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.
(k)The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
(l)The changes made to this section by the act adding this subdivision Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
|
Date
|
Status
|
|---|---|
| May 28, 2015 | Referred to Com. on L. & I.R. |
| Aug 17, 2015 | Chaptered by Secretary of State - Chapter 222, Statutes of 2015. |
| Aug 17, 2015 | Approved by the Governor. |
| Aug 3, 2015 | Enrolled and presented to the Governor at 3 p.m. |
| Jul 16, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 76. Noes 2. Page 2419.). |
| Jul 16, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Jul 13, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 3. Page 1903.). |
| Jul 13, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Jul 13, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 15 pursuant to Assembly Rule 77. |
| Jul 8, 2015 | Read second time. Ordered to third reading. |
| Jul 7, 2015 | Read third time and amended. Ordered to second reading. |
| Jun 23, 2015 | Read second time. Ordered to third reading. |
| Jun 22, 2015 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Jun 10, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (June 10). Re-referred to Com. on APPR. |
| Feb 27, 2015 | Introduced. To print. |
| May 18, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 1. Page 1475.) |
| May 18, 2015 | Read third time. Passed. Ordered to the Senate. |
| May 18, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 11, 2015 | Read third time and amended. Ordered to third reading. (Page 1374.) |
| May 11, 2015 | Read third time and amended. Ordered to third reading. |
| Apr 16, 2015 | Read second time. Ordered to third reading. |
| Apr 15, 2015 | From committee: Do pass. (Ayes 15. Noes 1.) (April 15). |
| Apr 8, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 1.) (April 8). Re-referred to Com. on APPR. |
| Apr 7, 2015 | Re-referred to Com. on INS. |
| Apr 6, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| Mar 23, 2015 | Referred to Com. on INS. |
| Mar 2, 2015 | Read first time. |
| Mar 1, 2015 | From printer. May be heard in committee March 31. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jul 16, 2015 | AB 1245 COOLEY Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Jul 13, 2015 | Assembly 3rd Reading AB1245 Cooley By Lara | Senate Floor |
Passed |
|
| Jun 10, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Labor and Industrial Relations |
Passed |
|
| May 18, 2015 | AB 1245 COOLEY Assembly Third Reading | Assembly Floor |
Passed |
|
| Apr 15, 2015 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 8, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Employment Development Department | ** Support | Jul 13, 2015 |
| National Association of Women Business Owners | ** Support | Jul 13, 2015 |
| Small Business California | ** Support | Jul 13, 2015 |
AB 1245
Page 2
CONCURRENCE IN SENATE AMENDMENTS
AB 1245
(Cooley)
As Amended July 7, 2015
Majority vote
ASSEMBLY: |
76-1 |
(May 18, 2015) |
SENATE: |
36-3 |
(July 13, 2015) |
Original Committee Reference: INS.
SUMMARY: Requires, subject to exceptions, all employers to file their unemployment insurance (UI) related data and taxes electronically.
The Senate amendments:
Extend, from six months to one year, the time period allowable for a business to be granted a waiver for good cause of the obligation to file electronically.
Make technical and conforming changes.
EXISTING LAW:
Establishes a UI program designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own. The UI program is a joint federal/state mandatory program.
Requires employers to pay UI taxes based on a statutory formula, and to provide detailed wage information on a schedule specified in statute.
Allows "hard copy" filing and paper check tax remittance, but authorizes on a permissive basis electronic filing of the taxes and data.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Purpose. According to the author, this bill would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the Employment Development Department (EDD). Electronic filing for employers would increase efficiencies for both EDD and the employer community. Once fully implemented, this legislation would result in many millions in savings to the state in paper, postage and staff time.
Background. The UI program is a long-standing state/federal insurance program that predates any form of e-commerce. The realities of paper filings have created outdated laws which have been subject to modernization efforts over the years. For example, benefits have been paid based on a "base period" of earnings, which discounts the previous quarter of earning in favor of the four quarters prior to the most recently completed quarter. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data. In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850 million of federal money for California) to find ways to look at the most recent quarter of earnings – the so-called "alternative base period" calculation. Many employers now use electronic filing for both data and tax remittances, because it is cheaper and more efficient. Moving forward to reflect the realities of modern electronic commerce makes sense from both a governmental and private sector efficiency perspective.
EDD Web site. The requirement that employers must file electronically would not result in employers being forced to purchase specialized software. All that will be necessary is that the employers have internet access, because the EDD's Web site will enable employers to file anything necessary merely by logging on to www.edd.ca.gov.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0001234
AB 1245
Page 5
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1245
Amended: 7/7/15 in Senate
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 6/10/15
AYES: Mendoza, Stone, Jackson, Leno, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-1, 5/18/15 - See last page for vote
SUBJECT: Unemployment insurance: electronic reporting and funds transfers
SOURCE: Small Business California
DIGEST: This bill, beginning on January 1, 2017, requires an employer with 10 or more employees to file all reports and returns, and remit all contributions for unemployment insurance premiums to the Employment Development Department (EDD) electronically, as specified. Beginning on January 1, 2018, this bill extends the application of these electronic filing requirements to all employers. This bill authorizes the granting of a waiver from these requirements for severe hardship, as specified. In addition to any other penalties imposed under existing law for failure to timely and properly submit their reports, this bill imposes a $50 penalty on employers who fail to file without good cause, as specified.
Senate Floor Amendments of 7/7/15 change from six months to one year the time frame under which a waiver of these requirements (that is approved by the Director of EDD) shall be valid to be consistent with other provisions in the bill which grant a one year waiver.
Existing law:
Establishes the Unemployment Insurance (UI) program, a joint federal-state program administered by the Employment Development Department (EDD), designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own.
Requires an employer to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, with the Director of the EDD and to make contributions for unemployment insurance premiums.
Requires each employer to file their contributions and reports with the director of EDD within the time frame specified in statute.
Allows “hard copy” filing and paper check tax remittance. However, depending on the taxes and data, existing law authorizes electronic filing of contributions and data.
Imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill:
Requires employers to file their UI contributions and withholdings, report of contributions, quarterly return, and report of wages electronically as follows:
Effective January 1, 2017 - employers with 10 or more employees;
Effective January 1, 2018 - all employers (capturing those with less than 10 employees).
Authorizes an employer to seek, and the Director of the EDD to grant, a waiver of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
Imposes, in addition to any other penalties imposed under existing law for failure to timely and properly submit their reports, a $50 penalty on employers who fail to file without good cause, and until January 1, 2019, exempts certain employers’ timely nonelectronic filings from that penalty.
Background
The UI program is a state/federal insurance program that provides unemployment
insurance benefits to employees who lose their jobs through no fault of their own.
For years the EDD operated on an almost 30 year old antiquated IT system that was inadequate to handle the heavy UI claims volume that resulted from the Great
Recession. The EDD has replaced its major IT systems and continues to make upgrades to its various programs. Most recently, EDD implemented a new UI Online web portal for UI customers to access their UI claim online 24 hours a day, seven days a week. The UI Online is a web-based system that has automated the core business functions that support the continued claims and reopening of existing claims. This project has allowed EDD to redirect staff resources to other business functions within the UI Program. Additionally, the improvements will also help by reducing paper handling and associated costs and creating greater efficiencies within the system.
The realities of technology and the movement towards more electronic operations create opportunities for efficiencies to be implemented in other areas. For example, in the UI Program, benefits are calculated using a "standard base period" of earnings. The current standard base period is the first four of the last five completed calendar quarters prior to the beginning date of the UI claim. In the calculation of the earnings, the most recent quarter of earnings is discounted in favor of the 4 prior quarters. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data.
In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850,000,000 of federal money for California) to find ways to look at the most recent quarter of earnings – using what is referred to as the "alternative base period" calculation. The Alternate Base Period (ABP) program was implemented in 2012 to allow EDD to use the four most recently completed calendar quarters of earnings when establishing a claim. The ABP law does not change employers’ current statutory wage reporting requirements. However, employers may receive requests for wage information before their customary wage reports are due. EDD will mail a request for wages to the employer, who must then respond in accordance with the instructions provided on the form. Employers will have 10 days to respond to the EDD’s request for wages.
Since January 2011, EDD has offered employers online payment and reporting capabilities through its e-Services for Business web site. With e-Services for Business, employers and their representatives can register their businesses, submit tax returns, make tax payments, and manage their accounts online. According to EDD, approximately 35% of employers currently use e-Services for Businesses for some form of interaction with EDD. For employers, using electronic filing for both data and tax remittances is cheaper and more efficient. Moving forward to reflect the realities of modern electronic advances makes sense from both a governmental and private sector efficiency perspective.
This bill phases in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to EDD. Because EDD has an already established e-services system for employer use, this requirement would not result in employers being forced to purchase specialized software. All that would be necessary for the employer to fulfill this requirement is to have internet access to submit their payments and documents through EDD’s current online service. According to the EDD, this bill would bring efficiencies both to EDD and the employer community – saving time, paper, and postage while reducing common errors associated with paper forms. The two-year, phased-in approach will allow for a robust education and outreach campaign. Additionally, EDD has a technical assistance team in place to assist employers with the online system.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Small Business California (source)
Employment Development Department
National Association of Women Business Owners
None received
ARGUMENTS IN SUPPORT: The author states that processing paper documents and payments costs California nearly eight times as much as processing the same information electronically. According to the author and sponsors, EDD’s existing e-Services for Business is secure, easy to use, and would help businesses to: 1) avoid errors that are common with paper forms; 2) save time by saving basic account information for future transactions; 3) protect data through encryption that is safer and more secure than paper forms; 4) allow employers to easily update account information; 5) provide an automated receipt so employers immediately know their payment was received; and 6) complement and upcoming feature that will allow employers to also handle their Unemployment Insurance forms online.
Overall, proponents argue that this legislation would result in many millions in savings to the state in paper, postage and staff time, while requiring no upfront costs or additional infrastructure. The sponsors note that currently three states require all employers to use electronic filing, while many others require certain employers (based on size or industry type) to do so. Lastly, the author and the sponsors note that EDD has a technical assistance team in place to support employers in making the transition to its online system.
ASSEMBLY FLOOR: 76-1, 5/18/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Beth Gaines
NO VOTE RECORDED: Kim, Mathis, Melendez
Prepared by: Alma Perez / L. & I.R. / (916) 651-1556
7/8/15 15:15:29
**** END ****
AB 1245
Page 5
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1245
Amended: 5/11/15 in Assembly
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 6/10/15
AYES: Mendoza, Stone, Jackson, Leno, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-1, 5/18/15 - See last page for vote
SUBJECT: Unemployment insurance: electronic reporting and funds transfers
SOURCE: Small Business California
DIGEST: This bill, beginning on January 1, 2017, requires an employer with 10 or more employees to file all reports and returns, and remit all contributions for unemployment insurance premiums to the Employment Development Department electronically, as specified. Beginning on January 1, 2018, this bill extends the application of these electronic filing requirements to all employers. This bill authorizes the granting of a waiver from these requirements for severe hardship, as specified. In addition to any other penalties imposed under existing law for failure to timely and properly submit their reports, this bill imposes a $50 penalty on employers who fail to file without good cause, as specified.
Existing law:
Establishes the Unemployment Insurance (UI) program, a joint federal-state program administered by the Employment Development Department (EDD), designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own.
Requires an employer to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, with the Director of the EDD and to make contributions for unemployment insurance premiums.
Requires each employer to file their contributions and reports with the director of EDD within the time frame specified in statute.
Allows “hard copy” filing and paper check tax remittance. However, depending on the taxes and data, existing law authorizes electronic filing of contributions and data.
Imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This bill:
Requires employers to file their UI contributions and withholdings, report of contributions, quarterly return, and report of wages electronically as follows:
Effective January 1, 2017 - employers with 10 or more employees;
Effective January 1, 2018 - all employers (capturing those with less than 10 employees).
Authorizes an employer to seek, and the Director of the EDD to grant, a waiver of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
Imposes, in addition to any other penalties imposed under existing law for failure to timely and properly submit their reports, a $50 penalty on employers who fail to file without good cause, and until January 1, 2019, exempts certain employers’ timely nonelectronic filings from that penalty.
Background
The UI program is a state/federal insurance program that provides unemployment
insurance benefits to employees who lose their jobs through no fault of their own.
For years the EDD operated on an almost 30 year old antiquated IT system that was inadequate to handle the heavy UI claims volume that resulted from the Great
Recession. The EDD has replaced its major IT systems and continues to make upgrades to its various programs. Most recently, EDD implemented a new UI Online web portal for UI customers to access their UI claim online 24 hours a day, seven days a week. The UI Online is a web-based system that has automated the core business functions that support the continued claims and reopening of existing claims. This project has allowed EDD to redirect staff resources to other business functions within the UI Program. Additionally, the improvements will also help by reducing paper handling and associated costs and creating greater efficiencies within the system.
The realities of technology and the movement towards more electronic operations create opportunities for efficiencies to be implemented in other areas. For example, in the UI Program, benefits are calculated using a "standard base period" of earnings. The current standard base period is the first four of the last five completed calendar quarters prior to the beginning date of the UI claim. In the calculation of the earnings, the most recent quarter of earnings is discounted in favor of the 4 prior quarters. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data.
In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850,000,000 of federal money for California) to find ways to look at the most recent quarter of earnings – using what is referred to as the "alternative base period" calculation. The Alternate Base Period (ABP) program was implemented in 2012 to allow EDD to use the four most recently completed calendar quarters of earnings when establishing a claim. The ABP law does not change employers’ current statutory wage reporting requirements. However, employers may receive requests for wage information before their customary wage reports are due. EDD will mail a request for wages to the employer, who must then respond in accordance with the instructions provided on the form. Employers will have 10 days to respond to the EDD’s request for wages.
Since January 2011, EDD has offered employers online payment and reporting capabilities through its e-Services for Business web site. With e-Services for Business, employers and their representatives can register their businesses, submit tax returns, make tax payments, and manage their accounts online. According to EDD, approximately 35% of employers currently use e-Services for Businesses for some form of interaction with EDD. For employers, using electronic filing for both data and tax remittances is cheaper and more efficient. Moving forward to reflect the realities of modern electronic advances makes sense from both a governmental and private sector efficiency perspective.
This bill phases in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to EDD. Because EDD has an already established e-services system for employer use, this requirement would not result in employers being forced to purchase specialized software. All that would be necessary for the employer to fulfill this requirement is to have internet access to submit their payments and documents through EDD’s current online service. According to the EDD, this bill would bring efficiencies both to EDD and the employer community – saving time, paper, and postage while reducing common errors associated with paper forms. The two-year, phased-in approach will allow for a robust education and outreach campaign. Additionally, EDD has a technical assistance team in place to assist employers with the online system.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Small Business California (source)
Employment Development Department
National Association of Women Business Owners
OPPOSITION: (Verified 6/10/15)
None received
ARGUMENTS IN SUPPORT: The author states that processing paper documents and payments costs California nearly eight times as much as processing the same information electronically. According to the author and sponsors, EDD’s existing e-Services for Business is secure, easy to use, and would help businesses to: 1) avoid errors that are common with paper forms; 2) save time by saving basic account information for future transactions; 3) protect data through encryption that is safer and more secure than paper forms; 4) allow employers to easily update account information; 5) provide an automated receipt so employers immediately know their payment was received; and 6) complement and upcoming feature that will allow employers to also handle their Unemployment Insurance forms online.
Overall, proponents argue that this legislation would result in many millions in savings to the state in paper, postage and staff time, while requiring no upfront costs or additional infrastructure. The sponsors note that currently three states require all employers to use electronic filing, while many others require certain employers (based on size or industry type) to do so. Lastly, the author and the sponsors note that EDD has a technical assistance team in place to support employers in making the transition to its online system.
ASSEMBLY FLOOR: 76-1, 5/18/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Beth Gaines
NO VOTE RECORDED: Kim, Mathis, Melendez
Prepared by: Alma Perez / L. & I.R. / (916) 651-1556
6/24/15 16:13:26
**** END ****
AB 1245 (Cooley) Page 4 of 4
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AB 1245 Hearing Date: June 10, 2015
Author: |
Cooley |
||
Version: |
May 11, 2015 |
||
Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Alma Perez-Schwab |
||
Subject: Unemployment insurance: electronic reporting and funds transfers
KEY ISSUES
Should the Legislature require that all employers file their required unemployment insurance contributions and wage data to the Employment Development Department electronically?
Should this requirement be phased in over a two-year period to allow small businesses to prepare and ensure compliance with this new obligation?
Should existing penalties and an additional $50 penalty be imposed on employers who fail to report their contributions and reports electronically in a timely manner, as specified?
ANALYSIS
Existing law establishes the Unemployment Insurance (UI) program, a joint federal-state program administered by the Employment Development Department (EDD), designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own.
The UI program is financed by employers who pay unemployment taxes on up to $7,000 in wages paid to each worker.
Among other things, regarding tax contributions and wage data, existing law:
(Unemployment Insurance Code §1088-1114)
Requires an employer to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return, as specified, with the director of the EDD and to make contributions for unemployment insurance premiums.
Requires each employer to file their contributions and reports with the director of EDD within the time frame specified in statute.
Allows “hard copy” filing and paper check tax remittance. However, depending on the taxes and data, existing law authorizes electronic filing of contributions and data.
Imposes a 15% penalty on an employer who fails to timely pay the contributions and imposes a $20 penalty for each unreported wage item.
This Bill would require, with some exceptions, all employers to submit their unemployment insurance contributions and data to the Employment Development Department electronically.
Specifically, this bill would:
Require employers to file their UI contributions and withholdings, report of contributions, quarterly return, and report of wages electronically as follows:
Effective January 1, 2017 - employers with 10 or more employees;
Effective January 1, 2018 - all employers (capturing those with less than 10 employees).
Authorize an employer to seek, and the Director of the Employment Development Department (EDD) to grant, a waiver of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
In addition to any other penalties imposed under existing law for failure to timely and properly submit their reports, the bill would impose a $50 penalty on employers who fail to file without good cause, and would until January 1, 2019, exempt certain employers’ timely nonelectronic filings from that penalty.
COMMENTS
1. Background on the Unemployment Insurance Program and EDD Modernization:
The UI program is a state/federal insurance program that provides unemployment insurance benefits to employees who lose their jobs through no fault of their own. For years the EDD operated on an almost 30 year old antiquated IT system that was inadequate to handle the heavy UI claims volume that resulted from the Great Recession. The EDD has replaced its major IT systems and continues to make upgrades to its various programs. Most recently, EDD implemented a new UI Online web portal for UI customers to access their UI claim online 24 hours a day, seven days a week. The UI Online is a web-based system that has automated the core business functions that support the continued claims and reopening of existing claims. This project has allowed EDD to redirect staff resources to other business functions within the UI Program. Additionally, the improvements will also help by reducing paper handling and associated costs and creating greater efficiencies within the system.
The realities of technology and the movement towards more electronic operations create opportunities for efficiencies to be implemented in other areas. For example, in the UI Program, benefits are calculated using a "standard base period" of earnings. The current standard base period is the first four of the last five completed calendar quarters prior to the beginning date of the UI claim. In the calculation of the earnings, the most recent quarter of earnings is discounted in favor of the 4 prior quarters. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data. In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850,000,000 of federal money for California) to find ways to look at the most recent quarter of earnings – using what is referred to as the "alternative base period" calculation. The Alternate Base Period (ABP) program was implemented in 2012 to allow EDD to use the four most recently completed calendar quarters of earnings when establishing a claim. The ABP law does not change employers’ current statutory wage reporting requirements. However, employers may receive requests for wage information before their customary wage reports are due. EDD will mail a request for wages to the employer, who must then respond in accordance with the instructions provided on the form. Employers will have 10 days to respond to the EDD’s request for wages.
2. Need for the bill?
Since January 2011, EDD has offered employers online payment and reporting capabilities through its e-Services for Business web site. With e-Services for Business, employers and their representatives can register their businesses, submit tax returns, make tax payments, and manage their accounts online. According to EDD, approximately 35% of employers currently use e-Services for Businesses for some form of interaction with EDD. For employers, using electronic filing for both data and tax remittances is cheaper and more efficient. Moving forward to reflect the realities of modern electronic advances makes sense from both a governmental and private sector efficiency perspective.
This bill would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the Employment Development Department. Because EDD has an already established e-services system for employer use, this requirement would not result in employers being forced to purchase specialized software. All that would be necessary for the employer to fulfill this requirement is to have internet access to submit their payments and documents through EDD’s current online service. According to the EDD, this bill would bring efficiencies both to EDD and the employer community – saving time, paper, and postage while reducing common errors associated with paper forms. The two-year, phased-in approach will allow for a robust education and outreach campaign. Additionally, EDD has a technical assistance team in place to assist employers with the online system.
3. Proponent Arguments:
The author states that processing paper documents and payments costs California nearly eight times as much as processing the same information electronically. According to the author and sponsors, EDD’s existing e-Services for Business is secure, easy to use, and would help businesses to: 1) avoid errors that are common with paper forms; 2) save time by saving basic account information for future transactions; 3) protect data through encryption that is safer and more secure than paper forms; 4) allow employers to easily update account information; 5) provide an automated receipt so employers immediately know their payment was received; and 6) complement and upcoming feature that will allow employers to also handle their Unemployment Insurance forms online.
Overall, proponents argue that this legislation would result in many millions in savings to the state in paper, postage and staff time, while requiring no upfront costs or additional infrastructure. The sponsors note that currently three states require all employers to use electronic filing, while many others require certain employers (based on size or industry type) to do so. Lastly, the author and the sponsors note that EDD has a technical assistance team in place to support employers in making the transition to its online system.
4. Opponent Arguments:
None received.
SUPPORT
Small Business California (Sponsor)
Employment Development Department
National Association of Women Business Owners
OPPOSITION
None received
-- END --
AB 1245
Page 2
ASSEMBLY THIRD READING
AB 1245
(Cooley)
As Amended May 11, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Insurance |
11-1 |
Daly, Travis Allen, Calderon, Cooley, Cooper, Dababneh, Frazier, Gatto, Grove, Mayes, Rodriguez |
Beth Gaines |
Appropriations |
15-1 |
Gomez, Bigelow, Bonta, Calderon, Chang, Daly, Eggman, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
Gallagher |
SUMMARY: Requires, subject to exceptions, all employers to file their unemployment insurance (UI) related data and taxes electronically. Specifically, this bill:
Requires employers with 10 or more employees to file UI taxes and related data requirements electronically, commencing January 1, 2016.
Requires employers with less than 10 employees to file UI taxes and related data requirements electronically, commencing January 1, 2017.
Authorizes an employer to seek, and the Director of the Employment Development Department (EDD) to grant, a waiver of up to one year of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
Applies the existing penalties for failure to make non-electronic filings to a failure to comply with the new electronic filing requirements, but delays, until January 1, 2019, imposition of penalties for failure to file electronically if the employer timely filed the return and paid the taxes.
Deletes a requirement that quarterly filers must file an annual reconciliation of the four quarterly filings.
EXISTING LAW:
Establishes a UI program designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own. The UI program is a joint federal/state mandatory program.
Requires employers to pay UI taxes based on a statutory formula, and to provide detailed wage information on a schedule specified in statute.
Allows "hard copy" filing and paper check tax remittance, but authorizes on a permissive basis electronic filing of the taxes and data.
FISCAL EFFECT: According to the Assembly Appropriations Committee, savings of several million dollars annually once the program is fully implemented.
COMMENTS:
Purpose. According to the author, this bill would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the EDD. Electronic filing for employers would increase efficiencies for both EDD and the employer community. Once fully implemented, this legislation would result in many millions in savings to the state in paper, postage and staff time.
Background. The UI program is a long-standing state/federal insurance program that predates any form of e-commerce. The realities of paper filings have created outdated laws which have been subject to modernization efforts over the years. For example, benefits have been paid based on a "base period" of earnings, which discounts the previous quarter of earning in favor of the four quarters prior to the most recently completed quarter. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data. In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850 million of federal money for California) to find ways to look at the most recent quarter of earnings – the so-called "alternative base period" calculation. Many employers now use electronic filing for both data and tax remittances, because it is cheaper and more efficient. Moving forward to reflect the realities of modern electronic commerce makes sense from both a governmental and private sector efficiency perspective.
EDD Web site. The requirement that employers must file electronically would not result in employers being forced to purchase specialized software. All that will be necessary is that the employers have internet access, because the EDD's Web site will enable employers to file anything necessary merely by logging on to www.edd.ca.gov.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0000351
AB 1245
Page 2
ASSEMBLY THIRD READING
AB 1245
(Cooley)
As Amended April 6, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Insurance |
11-1 |
Daly, Travis Allen, Calderon, Cooley, Cooper, Dababneh, Frazier, Gatto, Grove, Mayes, Rodriguez |
Beth Gaines |
Appropriations |
15-1 |
Gomez, Bigelow, Bonta, Calderon, Chang, Daly, Eggman, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
Gallagher |
SUMMARY: Requires, subject to exceptions, all employers to file their unemployment insurance (UI) related data and taxes electronically. Specifically, this bill:
Requires employers with 10 or more employees to file UI taxes and related data requirements electronically, commencing January 1, 2016.
Requires employers with less than 10 employees to file UI taxes and related data requirements electronically, commencing January 1, 2017.
Authorizes an employer to seek, and the Director of the Employment Development Department (EDD) to grant, a waiver of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
Applies the existing penalties for failure to make non-electronic filings to a failure to comply with the new electronic filing requirements.
EXISTING LAW:
Establishes a UI program designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own. The UI program is a joint federal/state mandatory program.
Requires employers to pay UI taxes based on a statutory formula, and to provide detailed wage information on a schedule specified in statute.
Allows "hard copy" filing and paper check tax remittance, but authorizes on a permissive basis electronic filing of the taxes and data.
FISCAL EFFECT: According to the Assembly Appropriations Committee, savings of several million dollars annually once the program is fully implemented.
COMMENTS:
Purpose. According to the author, this bill would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the EDD. Electronic filing for employers would increase efficiencies for both EDD and the employer community. Once fully implemented, this legislation would result in many millions in savings to the state in paper, postage and staff time.
Background. The UI program is a long-standing state/federal insurance program that predates any form of e-commerce. The realities of paper filings have created outdated laws which have been subject to modernization efforts over the years. For example, benefits have been paid based on a "base period" of earnings, which discounts the previous quarter of earning in favor of the 4 quarters prior to the most recently completed quarter. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data. In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850 million of federal money for California) to find ways to look at the most recent quarter of earnings – the so-called "alternative base period" calculation. Many employers now use electronic filing for both data and tax remittances, because it is cheaper and more efficient. Moving forward to reflect the realities of modern electronic commerce makes sense from both a governmental and private sector efficiency perspective.
EDD Web site. The requirement that employers must file electronically would not result in employers being forced to purchase specialized software. All that will be necessary is that the employers have internet access, because the EDD's Web site will enable employers to file anything necessary merely by logging on to www.edd.ca.gov.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0000169
AB 1245
Page 2
Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 1245
(Cooley) – As Amended April 6, 2015
Policy Committee: |
Insurance |
Vote: |
11 - 1 |
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill requires employers to file Unemployment Insurance (UI)-related data and taxes electronically by January 1, 2017 or 2018, depending on employer size, while allowing the Employment Development Department (EDD) discretion to grant specified exemptions from the new requirements. It also applies existing penalty structures to failures to comply with new electronic reporting and funds transfer requirements.
FISCAL EFFECT:
This bill should not result in net costs to EDD, and should result in savings, as explained below.
EDD estimates about $7.6 million in savings due to operational efficiencies when this bill is fully implemented, which would allow resources to be redirected to other workload.
EDD expects to incur higher licensing fees for customer authentication software associated with more system users, but states the information technology infrastructure is in place to fully support electronic filing by all employers, and the large cost savings from operational efficiencies dwarfs cost increases from slightly higher fees.
Minor potential penalty revenues, dependent on compliance with the new requirements. Also, approximately $800,000 in increased interest is expected from receiving more timely taxes via electronic funds transfer.
COMMENTS:
Purpose. According to the author, AB 1245 would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the Employment Development Department (EDD). The author contends electronic filing for employers would increase efficiencies for both EDD and for the employer community
Background. Businesses are required to file wage and tax information with, and remit payroll taxes to, EDD. Approximately 35 percent of employers are currently enrolled in e-Services for Business and are reporting wages and paying taxes electronically. The remaining employers, or about 610,000 employers, still report wages and pay taxes by paper. There is no registered opposition to this bill.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
AB 1245
Page 2
Date of Hearing: April 8, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 1245
(Cooley) – As Introduced February 27, 2015
SUBJECT: Unemployment insurance: electronic reporting and funds transfers
SUMMARY: Requires, subject to exceptions, all employers to file their unemployment insurance (UI) related data and taxes electronically. Specifically, this bill:
Requires employers with 10 or more employees to file UI taxes and related data requirements electronically, commencing January 1, 2016.
Requires employers with less than 10 employees to file UI taxes and related data requirements electronically, commencing January 1, 2017.
Authorizes an employer to seek, and the Director of the Employment Development Department (EDD) to grant, a waiver of the requirement to file electronically if the employer establishes it has a lack of automation to comply with electronic filing, there is a severe economic hardship, there is a current federal exemption from electronic filing, or if there is some other good cause to waive the requirement.
Applies the existing penalties for failure to make non-electronic filings to a failure to comply with the new electronic filing requirements.
EXISTING LAW:
Establishes a UI program designed to provide unemployment insurance benefits to employees who lose their jobs through no fault of their own. The UI program is a joint federal/state mandatory program.
Requires employers to pay UI taxes based on a statutory formula, and to provide detailed wage information on a schedule specified in statute.
Allows "hard copy" filing and paper check tax remittance, but authorizes on a permissive basis electronic filing of the taxes and data.
FISCAL EFFECT: Undetermined.
COMMENTS:
Purpose. According to the author, AB 1245 would phase in over a two-year period the required use of electronic filing for all California employers to submit returns and remit payments to the Employment Development Department (EDD). Electronic filing for employers would increase efficiencies for both EDD and the employer community. Once fully implemented, this legislation would result in many millions in savings to the state in paper, postage and staff time.
Background. The UI program is a long-standing state/federal insurance program that predates any form of e-commerce. The realities of paper filings have created outdated laws which have been subject to modernization efforts over the years. For example, benefits have been paid based on a "base period" of earnings, which discounts the previous quarter of earning in favor of the 4 quarters prior to the most recently completed quarter. Because data has historically been filed in hard copy format, it was impossible to use the most recent, relevant, data. In this respect, federally mandated "UI Modernization" requirements have been established that incentivized states (to the tune of nearly $850,000,000 of federal money for California) to find ways to look at the most recent quarter of earnings – the so-called "alternative base period" calculation. Many employers now use electronic filing for both data and tax remittances, because it is cheaper and more efficient. Moving forward to reflect the realities of modern electronic commerce makes sense from both a governmental and private sector efficiency perspective.
EDD website. The requirement that employers must file electronically would not result in employers being forced to purchase specialized software. All that will be necessary is that the employer have internet access, because the EDD's website will enable employers to file anything necessary merely by logging on to www.edd.ca.gov.
Author's amendments. The author is proposing amendments that make minor technical corrections to the bill as introduced, as well as amendments that delay implementation of the bill's mandatory requirements. With respect to employers with 10 or more employees, the bill's provisions would not take effect until January 1, 2017. With respect to employers with fewer than 10 employees, the bill's provisions would not take effect until January 1, 2018.
REGISTERED SUPPORT / OPPOSITION:
Support
Small Business California
Employment Development Department
Opposition
None received
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086
Discussed in Hearing
49SEC
Assembly Floor
2MIN
Senate Floor
9MIN
Senate Standing Committee on Labor and Industrial Relations
1MIN
Assembly Floor
1MIN
Assembly Floor
4MIN
Assembly Standing Committee on Appropriations
14MIN
Assembly Standing Committee on Insurance
Bill Author
Bill Co-Author(s):