Today's Law As Amended


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AB-805 Unemployment insurance: contribution rates.(2019-2020)



As Amends the Law Today


SECTION 1.

 Section 977 of the Unemployment Insurance Code is amended to read:

977.
 (a) Except as provided in subdivision (c),  subdivisions (c) and (d),  if, as of the computation date, the employer’s net balance of reserve equals or exceeds that percentage of his or her  their  average base payroll which that  appears on any line in column 1 of the following table, but is less than that percentage of his or her  their  average base payroll which that  appears on the same line in column 2 of that table, his or her  their  contribution rate shall be the figure appearing on that same line in the appropriate schedule, as defined in subdivision (b), which shall be a percentage of the wages specified in Section 930.
 Reserve Ratio
Column  Column
Contribution Rate
Schedules
Line
1  2
AA
A
B
C
D
E
F
01
02
03
04
05
06
07
08
09
10
less than –20
–20 to –18
–18 to –16
–16 to –14
–14 to –12
–12 to –11
–11 to –10
–10 to –09
–09 to –08
–08 to –07
5.4
5.2
5.1
5.0
4.9
4.8
4.7
4.6
4.5
4.4
5.4
5.3
5.2
5.1
5.0
4.9
4.8
4.7
4.6
4.5
5.4
5.4
5.4
5.3
5.3
5.2
5.1
5.1
4.9
4.8
5.4
5.4
5.4
5.4
5.4
5.4
5.3
5.3
5.2
5.1
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.3
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
5.4
11
12
13
14
15
–07 to –06
–06 to –05
–05 to –04
–04 to –03
–03 to –02
4.3
4.2
4.1
4.0
3.9
4.4
4.3
4.2
4.1
4.0
4.7
4.6
4.5
4.4
4.3
5.0
4.9
4.8
4.7
4.6
5.3
5.2
5.1
5.0
4.9
5.4
5.4
5.3
5.3
5.2
5.4
5.4
5.4
5.4
5.4
16
17
18
19
20
–02 to –01
–01 to 00
 00 to 01
 01 to 02
 02 to 03
3.8
3.7
3.4
3.2
3.0
3.9
3.8
3.6
3.4
3.2
4.2
4.1
3.9
3.7
3.5
4.5
4.4
4.2
4.0
3.8
4.8
4.7
4.5
4.3
4.1
5.1
5.0
4.8
4.6
4.4
5.4
5.4
5.1
4.9
4.7
21
22
23
24
25
 03 to 04
 04 to 05
 05 to 06
 06 to 07
 07 to 08
2.8
2.6
2.4
2.2
2.0
3.0
2.8
2.6
2.4
2.2
3.3
3.1
2.9
2.7
2.5
3.6
3.4
3.2
3.0
2.8
3.9
3.7
3.5
3.3
3.1
4.2
4.0
3.8
3.6
3.4
4.5
4.3
4.1
3.9
3.7
26
27
28
29
30
 08 to 09
 09 to 10
 10 to 11
 11 to 12
 12 to 13
1.8
1.6
1.4
1.2
1.0
2.0
1.8
1.6
1.4
1.2
2.3
2.1
1.9
1.7
1.5
2.6
2.4
2.2
2.0
1.8
2.9
2.7
2.5
2.3
2.1
3.2
3.0
2.8
2.6
2.4
3.5
3.3
3.1
2.9
2.7
31
32
33
34
 13 to 14
 14 to 15
 15 to 16
 16 to 17
0.8
0.7
0.6
0.5
1.0
0.9
0.8
0.7
1.3
1.1
1.0
0.9
1.6
1.4
1.2
1.1
1.9
1.7
1.5
1.3
2.2
2.0
1.8
1.6
2.5
2.3
2.1
1.9
35
36
37
38
 17 to 18
 18 to 19
 19 to 20
 20 or more
0.4
0.3
0.2
0.1
0.6
0.5
0.4
0.3
0.8
0.7
0.6
0.5
1.0
0.9
0.8
0.7
1.2
1.1
1.0
0.9
1.4
1.3
1.2
1.1
1.7
1.5
1.4
1.3
(b) (1) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is greater than 1.8 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule AA.
(2) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is equal to or less than 1.8 percent and greater than 1.6 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule A.
(3) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is equal to or less than 1.6 percent and greater than 1.4 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule B.
(4) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is equal to or less than 1.4 percent and greater than 1.2 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule C.
(5) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is equal to or less than 1.2 percent and greater than 1.0 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule D.
(6) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is equal to or less than 1.0 percent and greater than or equal to 0.8 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule E.
(7) Whenever the balance in the Unemployment Fund on September 30 of any calendar year is less than 0.8 percent and greater than or equal to 0.6 percent of the wages (as wages, as  defined by Section 940) 940,  in employment subject to this part paid during the 12-month period ending upon the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at the rates specified in Schedule F.
(c) For each rating period beginning on or after January 1, 2005, in which an employer obtains or attempts to obtain a more favorable rate of contributions under this section due to deliberate ignorance, reckless disregard, fraud, intent to evade, misrepresentation, or willful nondisclosure, the director shall assign the maximum contribution rate plus 2 percent for each applicable rating period, the current rating period, and the subsequent rating period.
(d) Notwithstanding subdivisions (a) and (b), for calendar year 2021, except for employers subject to subdivision (c), an employer’s contribution rate shall not exceed the rate that was in effect for that employer in calendar year 2020.

SEC. 2.

 Section 977.5 of the Unemployment Insurance Code is amended to read:

977.5.
 (a)  Whenever the balance in the Unemployment Fund on September 30 of any calendar year is less than 0.6 percent of the wages (as wages, as  defined by Section 940) 940,  in employment, subject to this part, paid during the 12-month period ending on the computation date, employers shall pay into the Unemployment Fund contributions for the succeeding calendar year upon all wages with respect to employment at an emergency solvency surcharge rate. The emergency solvency surcharge rate shall be 1.15 times the rate the employer would have paid in Schedule F of subdivision (a) of Section 977, rounded to the nearest one-tenth of 1 percent.
(b) Notwithstanding subdivision (a), if the balance in the Unemployment Fund on September 30, 2020, is less than 0.6 percent of the wages, as defined by Section 940, in employment, subject to this part, paid during the 12-month period ending on the computation date, the emergency solvency surcharge rate shall not be imposed, and employers shall not pay into the Unemployment Fund contributions for calendar year 2021 at the emergency solvency surcharge rate. The suspension of the emergency solvency surcharge rate shall only apply to calendar year 2021.

SEC. 3.

 Section 984.5 of the Unemployment Insurance Code is amended to read:

984.5.
 (a) (1) Effective January 1, 1994, the director shall prepare a statement on or before November 30 of each calendar year, which shall be a public record, declaring the rate of contributions of the succeeding calendar year for all employers and self-employed individuals covered under Section 708 or 708.5 and shall notify promptly the employers and self-employed individuals of the rate.
(a) (2)  Effective January 1, 1994, the director shall prepare a statement on or before November 30 of each calendar year, which shall be a public record, declaring the rate of contributions of the succeeding calendar year for all employers and self-employed individuals covered under Section 708 or 708.5 and shall notify promptly the employers and self-employed individuals of the rate.  For calendar years 1994 to 1996, inclusive, worker contributions required under Section 708 or 708.5 shall be at a rate determined by the director to reimburse the Disability Fund for the sum of estimated administrative costs due to those sections and unemployment compensation disability benefits estimated to be paid to all employers and self-employed individuals covered by those sections. The rate shall be determined by dividing the sum of the benefits expected to be paid in the following calendar year and the administrative costs expected to be incurred under Section 708 or 708.5 during that calendar year by earnings estimated to be reported under those sections for that same calendar year. The resulting rate shall be rounded to the next higher one-hundredth percentage point. This rate may also be reduced or increased by a factor estimated to maintain as nearly as practicable a cumulative zero balance in funds contributed pursuant to Section 708 or 708.5.
(3)  For calendar year 1997, and each calendar year thereafter, the rate established each November 30 shall be determined by multiplying the current year’s rate by the ratio of 1.10 times the current year disbursements divided by contributions for the same period, under Sections 708 and 708.5. If in any calendar year the cumulative balance of contributions minus disbursements equals or exceeds 20 percent of annual disbursements, the contribution rate for the succeeding year shall be adjusted to a level necessary to maintain revenues at no more than 20 percent over annual disbursements. If legislation is enacted necessitating adjustments in the benefit levels for employers and self-employed individuals covered under Section 708 or 708.5, the rate may be adjusted by a factor estimated to provide that funds contributed pursuant to Section 708 or 708.5 cover disbursements pursuant to these sections.
(4) Notwithstanding paragraph (3), for calendar year 2021, an employer’s contribution rate shall not exceed the rate that was in effect for that employer in calendar year 2020.
(5)  For the purpose of this subdivision, disbursements are defined as the sum of unemployment compensation disability benefits paid to employers and self-employed individuals covered under Section 708 or 708.5, plus administrative costs related to those sections. Estimates made pursuant to this subdivision shall be available for public inspection.
(b)  The director’s action in determining a rate under this section shall not constitute an authorized regulation.
SEC. 4.
 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to temporarily relieve employers of the added financial burden of increased contribution rates caused primarily by layoffs necessitated by the novel coronavirus (COVID-19) pandemic, it is necessary that this bill take effect immediately.