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



Current Version: 06/25/20 - Amended Senate         Compare Versions information image


AB805:v97#DOCUMENT

Amended  IN  Senate  June 25, 2020
Amended  IN  Assembly  April 02, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 805


Introduced by Assembly Member Obernolte

February 20, 2019


An act to add Section 9796 to the Government Code, relating to state government. An act to amend Sections 977, 977.5, and 984.5 of the Unemployment Insurance Code, relating to unemployment insurance, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 805, as amended, Obernolte. Reports submitted to legislative committees. Unemployment insurance: contribution rates.
Existing law requires every employer, with specified exceptions, to pay contributions to the Unemployment Fund at specified rates determined according to 7 schedules.
This bill would, for calendar year 2021, provide that an employer’s contribution rate shall not exceed the rate that was in effect for that employer in calendar year 2020, as specified.
Existing law requires individuals who qualify as employers or who are self-employed, and who elect that their services be deemed employment, to pay contributions to the Unemployment Fund at a specified rate.
This bill would, for calendar year 2021, provide that the contribution rate for an individual who elects that their services be deemed employment shall not exceed the rate that was in effect for that individual in calendar year 2020.
Existing law requires employers to pay into the Unemployment Fund contributions at an emergency solvency surcharge rate when the balance of the fund is less than 0.6% of wages in employment, as defined.
This bill would, for calendar year 2021, suspend the payment of those employer contributions at an emergency solvency surcharge rate.
This bill would declare that it is to take effect immediately as an urgency statute.

Existing law requires a report required or requested by law to be submitted by a state or local agency to the Members of either house of the Legislature, generally, to be submitted in a specified manner, including a requirement that a report submitted by a state agency be posted on the state agency’s internet website.

This bill would additionally require a state agency to post on its internet website any report, as defined, that the state agency submits to a committee of the Legislature.

Vote: MAJORITY2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


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. For
(2) For calendar years 1994 to 1996, inclusive, worker contributions required under Section 708 or 708.5 shall be at a rate determined by the director to reimburse the Disability Fund for the sum of estimated administrative costs due to those sections and unemployment compensation disability benefits estimated to be paid to all employers and self-employed individuals covered by those sections. The rate shall be determined by dividing the sum of the benefits expected to be paid in the following calendar year and the administrative costs expected to be incurred under Section 708 or 708.5 during that calendar year by earnings estimated to be reported under those sections for that same calendar year. The resulting rate shall be rounded to the next higher one-hundredth percentage point. This rate may also be reduced or increased by a factor estimated to maintain as nearly as practicable a cumulative zero balance in funds contributed pursuant to Section 708 or 708.5.

For

(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.

For

(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.
SECTION 1.Section 9796 is added to the Government Code, to read:
9796.

(a)A state agency shall post on its internet website any report that the state agency submits to a committee of the Legislature.

(b)For purposes of this section, “report” includes a study, audit, or any report identified in the Legislative Analyst’s Supplemental Report of the Budget Act.