BILL NUMBER: AB 1794	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 6, 2012
	AMENDED IN SENATE  JUNE 21, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  APRIL 9, 2012

INTRODUCED BY   Assembly Member Williams

                        FEBRUARY 21, 2012

   An act to amend Section 1088.5 of the Unemployment Insurance Code,
relating to employers.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1794, as amended, Williams. Unemployment insurance: use of
employer reports: reporting and payroll: enforcement.
   (1) Existing law provides for the payment of unemployment
compensation benefits to eligible unemployed individuals, and
requires the Employment Development Department to implement and
administer the unemployment insurance system in the state. Existing
law requires each employer to file with the department a report of
wages paid to his or her workers and to furnish to each employee a
written statement showing, among other things, the total amount of
wages, and total wages subject to personal income tax, as provided.
Existing law also requires each employer to file with the department
specified information on new employees, and authorizes the use of
that information for specified purposes including, among other
things, administration of the law regarding unemployment compensation
benefits. Existing law provides that a person who knowingly
accesses, uses, or discloses confidential information without
authorization is guilty of a misdemeanor.
   This bill would, until January 1, 2019, also authorize the
Employment Development Department to provide the specified new
employee information to the Joint Enforcement Strike Force on the
Underground Economy, the Contractors' State License Board, and the
State Compensation Insurance Fund, as provided. By expanding the
crime of knowingly and wrongfully accessing, using or disclosing
specified information, this bill would impose a state-mandated local
program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   (2) Existing law imposes specified regulatory and enforcement
responsibilities relating to employers on the Employment Development
Department, the Contractors' State License Board, and the State
Compensation Insurance Fund.
   This bill would require the Employment Development Department, the
Contractors' State License Board, and the State Compensation
Insurance Fund to execute, on or before July 1, 2013, a memorandum of
understanding regarding the administration and enforcement of
reporting and payroll duties relating to contractors. 
   (3) This bill would incorporate additional changes in Section
1088.5 of the Unemployment Insurance Code, proposed by AB 1845, to be
operative only if AB 1845 and this bill are both chaptered and
become effective January 1, 2013, and this bill is chaptered last.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1088.5 of the Unemployment Insurance Code is
amended to read:
   1088.5.  (a) In addition to information reported in accordance
with Section 1088, effective July 1, 1998, each employer shall file,
with the department, the information provided for in subdivision (b)
on new employees.
   (b) Each employer shall report the hiring of any employee who
works in this state and to whom the employer anticipates paying
wages.
   (c) (1) This section shall not apply to any department, agency, or
instrumentality of the United States.
   (2) State agency employers shall not be required to report
employees performing intelligence or counterintelligence functions,
if the head of the agency has determined that reporting pursuant to
this section would endanger the safety of the employee or compromise
an ongoing investigation or intelligence mission.
   (d) (1) Employers shall submit a report as described in paragraph
(4) within 20 days of hiring any employee whom the employer is
required to report pursuant to this section.
   (2) Notwithstanding subdivision (a), employers transmitting
reports magnetically or electronically shall submit the report by two
monthly transmissions not less than 12 days and not more than 16
days apart.
   (3) For purposes of this section, an employer that has employees
in two or more states and that transmits reports magnetically or
electronically may designate one state in which the employer has
employees to which the employer will transmit the report described in
paragraph (4). Any employer that transmits reports pursuant to this
paragraph shall notify the Secretary of Health and Human Services in
writing as to which state the employer designates for the purpose of
sending reports.
   (4) The report shall contain the following:
   (A) The name, address, and social security number of the
employees.
   (B) The employer's name, address, state employer identification
number (if one has been issued), and identifying number assigned to
the employer under Section 6109 of the Internal Revenue Code of 1986.

   (C) The first date the employee worked.
   (5) Employers may report pursuant to this section by submitting a
copy of the employee's W-4 form, a form provided by the department,
or any other hiring document transmitted by first-class mail,
magnetically, or electronically.
   (e) For each failure to report the hiring of an employee, as
required and within the time required by this section, unless the
failure is due to good cause, the department may assess a penalty of
twenty-four dollars ($24), or four hundred ninety dollars ($490) if
the failure is the result of conspiracy between the employer and
employee not to supply the required report or to supply a false or
incomplete report. 
   (f) Information
    (f)     (1)     On and
after January 1, 2013, and before January 1, 2019, information 
collected pursuant to this section may be used for the following
purposes: 
   (1) 
    (A)  Administration of this code, including, but not
limited to, providing employer or employee information to
participating members of the Joint Enforcement Strike Force on the
Underground Economy pursuant to Section 329 for the purposes of
auditing, investigating, and prosecuting violations of tax and
cash-pay reporting laws. 
   (2) 
    (B)  Locating individuals for purposes of establishing
paternity and establishing, modifying, and enforcing child support
obligations. 
   (3) 
    (C)  Administration of employment security and workers'
compensation programs. 
   (4) 
    (D)  Providing employer or employee information to the
Franchise Tax Board and the State Board of Equalization for the
purpose of tax or fee enforcement. 
   (5) 
    (E)  Verification of eligibility of applicants for, or
recipients of, the public assistance programs listed in Section
1320b-7(b) of Title 42 of the United States Code. 
   (6) 
    (F)  Providing employer or employee information to the
Contractors' State License Board and the State Compensation Insurance
Fund for the purpose of workers' compensation payroll reporting.

   (2) On and after January 1, 2019, information collected pursuant
to this section may be used for the following purposes:  
   (A) Administration of this code.  
   (B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support obligations.
 
   (C) Administration of employment security and workers'
compensation programs.  
   (D) Providing employer or employee information to the Franchise
Tax Board and to the State Board of Equalization for the purposes of
tax or fee enforcement.  
   (E) Verification of eligibility of applicants for, or recipients
of, the public assistance programs listed in Section 1320b-7(b) of
Title 42 of the United States Code.
   (g) For purposes of this section, "employer" includes a labor
union hiring hall.
   (h) This section shall become operative on July 1, 1998. 
   (i) The amendments made to this section by the act adding this
subdivision shall remain in effect only until January 1, 2019, and as
of that date are repealed. 
   SEC. 1.5.    Section 1088.5 of the  
Unemployment Insurance Code   is amended to read: 
   1088.5.  (a) In addition to information reported in accordance
with Section 1088, effective July 1, 1998, each employer shall file,
with the department, the information provided for in subdivision (b)
on new employees.
   (b) Each employer shall report the hiring of any employee who
works in this state and to whom the employer anticipates paying wages
 , and also shall report the hiring of any employee who
previously worked for the employer but had been separated from that
prior employment for at least 60 consecutive days  .
   (c) (1) This section shall not apply to any department, agency, or
instrumentality of the United States.
   (2) State agency employers shall not be required to report
employees performing intelligence or counterintelligence functions,
if the head of the agency has determined that reporting pursuant to
this section would endanger the safety of the employee or compromise
an ongoing investigation or intelligence mission.
   (d) (1) Employers shall submit a report as described in paragraph
(4) within 20 days of hiring any employee whom the employer is
required to report pursuant to this section.
   (2) Notwithstanding subdivision (a), employers transmitting
reports magnetically or electronically shall submit the report by two
monthly transmissions not less than 12 days and not more than 16
days apart.
   (3) For purposes of this section, an employer that has employees
in two or more states and that transmits reports magnetically or
electronically may designate one state in which the employer has
employees to which the employer will transmit the report described in
paragraph (4). Any employer that transmits reports pursuant to this
paragraph shall notify the Secretary of Health and Human Services in
writing as to which state the employer designates for the purpose of
sending reports.
   (4) The report shall contain the following:
   (A) The name, address, and social security number of the
employees.
   (B) The employer's name, address, state employer identification
number (if one has been issued), and identifying number assigned to
the employer under Section 6109 of the Internal Revenue Code of 1986.

   (C) The first date the employee worked.
   (5) Employers may report pursuant to this section by submitting a
copy of the employee's W-4 form, a form provided by the department,
or any other hiring document transmitted by first-class mail,
magnetically, or electronically.
   (e) For each failure to report the hiring of an employee, as
required and within the time required by this section, unless the
failure is due to good cause, the department may assess a penalty of
twenty-four dollars ($24), or four hundred ninety dollars ($490) if
the failure is the result of conspiracy between the employer and
employee not to supply the required report or to supply a false or
incomplete report. 
   (f) Information
    (f)     (1)     On and
after January 1, 2013, and before January 1, 2019, information 
collected pursuant to this section may be used for the following
purposes: 
   (1) 
    (A)  Administration of this code  , including, but
not limited to, providing employer or employee information to
participating members of the Joint Enforcement Strike Force on the
Underground Economy pursuant to Section 329 for the purposes of
auditing,   investigating, and prosecuting violations of tax
and cash-pay reporting laws  . 
   (2) 
    (B)  Locating individuals for purposes of establishing
paternity and establishing, modifying, and enforcing child support
obligations. 
   (3) 
    (C)  Administration of employment security and workers'
compensation programs. 
   (4) 
    (D)  Providing employer or employee information to the
Franchise Tax Board and the State Board of Equalization for the
purpose of tax or fee enforcement. 
   (5) 
    (E)  Verification of eligibility of applicants for, or
recipients of, the public assistance programs listed in Section
1320b-7(b) of Title 42 of the United States Code. 
   (F) Providing employer or employee information to the Contractors'
State License Board and the State Compensation Insurance Fund for
the purpose of workers' compensation payroll reporting.  
   (2) On and after January 1, 2019, information collected pursuant
to this section may be used for the following purposes:  
   (A) Administration of this code.  
   (B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support obligations.
 
   (C) Administration of employment security and workers'
compensation programs.  
   (D) Providing employer or employee information to the Franchise
Tax Board and to the State Board of Equalization for the purposes of
tax or fee enforcement.  
   (E) Verification of eligibility of applicants for, or recipients
of, the public assistance programs listed in Section 1320b-7(b) of
Title 42 of the United States Code. 
   (g) For purposes of this section, "employer" includes a labor
union hiring hall.
   (h) This section shall become operative on July 1, 1998.
  SEC. 2.  On or before July 1, 2013, the Employment Development
Department, the Contractors' State License Board, and the State
Compensation Insurance Fund shall execute a memorandum of
understanding to share information and coordinate enforcement actions
against contractors that fail to report new employees to the
Employment Development Department and accurate payroll to the State
Compensation Insurance Fund.
   SEC. 3. 
    Section 1.5 of this bill incorporates amendments to Section
1088.5 of the Unemployment Insurance Code proposed by both this bill
and Assembly Bill 1845. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 2013,
(2) each bill amends Section 1088.5 of the Unemployment Insurance
Code,   and (3) this bill is enacted after Assembly Bill
1845, in which case Section 1 of this bill shall not become operative
  . 
   SEC. 3.   SEC. 4.   No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.