Today's Law As Amended


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AB-2191 Unemployment benefits: employer contributions: payments.(2013-2014)



As Amends the Law Today


SECTION 1.
 The Legislature hereby finds and declares all of the following:
(a) The California Unemployment Insurance Fund has been in distress for several consecutive years, with the employer contribution rate schedule set at the highest allowable amount under state law.
(b) State unemployment insurance tax rates for most California employers are at or only slightly below the maximum 6.2 percent of the first $7,000 of every employee’s earnings.
(c) The failure of the state to repay federal loans to the Unemployment Insurance Fund has increased federal unemployment insurance tax rates for all California employers, increasing an employer’s maximum combined state and federal unemployment insurance tax rate to as much as 7.7 percent.
(d) The unemployment insurance contribution payment structure requires most employers to report and pay employer contributions on a quarterly basis, resulting in the lion’s share of an employer’s total annual contribution liability being due in the first quarter of the year, and subsequent quarterly liability becoming progressively reduced as employees’ earnings pass the subject wage limit.
(e) Many employers struggle to pay the disparately large contribution for the first quarter, creating cash flow issues that restrict job growth, economic development, and capital purchases.
(f) Failure to pay the required quarterly unemployment insurance liability results in an immediate 10 percent penalty, plus interest, until fully paid.
(g) Just as businesses and individuals have the option to pay estimated income taxes in equal quarterly installments, businesses should be given the option of paying their annual unemployment insurance liability in equal quarterly installments without penalty.

SEC. 2.

 Section 1110 of the Unemployment Insurance Code is amended to read:

1110.
 (a) (1)  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 Section 1382, and, except as provided by subdivision (b),  (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.
(2) An employer, except an employer who is eligible to make the election described in subdivision (e), may elect to pay employer contributions required under Sections 976 and 976.5 that are due and payable on the first day of the calendar month following the close of each calendar quarter in an amount that is at least 25 percent of the estimated total annual contribution amount required. Upon annual reconciliation, if an amount paid for a quarter was less than 25 percent of the actual annual employer contribution amount required, the penalty and interest incurred pursuant to Sections 1112.5 and 1113 shall apply only to the difference of 25 percent of the actual total annual employer contribution amount required and the amount paid for that quarter.
(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 Any  employer described in Sections 682 and 684 who pays more than twenty thousand dollars ($20,000) in wages annually, shall not be entitled to the election allowed in subdivision (d). If at any time during the year the total wages paid by an employer electing to file under subdivision (d) exceeds twenty thousand dollars ($20,000), the election shall be terminated at the close of that calendar quarter. In addition to the report of wages due for that quarter, the employer shall file a return and pay any contributions due for that portion of the year during which the election was in effect, and shall pay contributions in accordance with subdivisions (a), (b), and (c) for the remainder of that year.
(f) Contributions due pursuant to this section may be submitted by electronic funds transfer.  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) 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.