California Legislature—2013–14 Regular Session

Assembly Bill No. 1792

Introduced by Assembly Member Gomez

February 18, 2014

An act to amend Section 1088.5 of the Unemployment Insurance Code, relating to unemployment insurance, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1792, as introduced, Gomez. Unemployment contributions: reports.

Existing law requires each employer to file with the Employment Development Department specified information on new employees. Existing law authorizes the department to assess a penalty of $24 for a failure to report the hiring of an employee, or $490 if the failure to report is the result of conspiracy between the employer and the employee not to supply the required report or to supply a false or incomplete report.

This bill would change these penalty amounts to $23 and $499, respectively. This bill would increase the amount of that penalty and thus, the moneys deposited into the Employment Development Department Contingent Fund, a continuously appropriated fund, thereby making an appropriation.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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, 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 begin delete twenty-four dollars ($24) end delete begin insert twenty-three dollars ($23) end insert , or begin delete four
hundred ninety dollars ($490) end delete begin insert four hundred ninety-nine dollars
($499) end insert 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) (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:

(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.

(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 the State Board of Equalization for the
purpose 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.

(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.

(G) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:

(i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant
to Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.

(ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22
(commencing with Section 100500) of the Government Code,
including federal tax credits and cost-sharing assistance pursuant
to the federal Patient Protection and Affordable Care Act, (Public
Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), where
the verification or determination is directly connected with, and
limited to, the administration of the California Health Benefit
Exchange.

(iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is
directly connected with, and limited to, the administration of the
Small Business Health Options Program.

(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.

(F) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:

(i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant
to Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.

(ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22
(commencing with Section 100500) of the Government Code,
including federal tax credits and cost-sharing assistance pursuant
to the federal Patient Protection and Affordable Care Act, (Public
Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), where
the verification or determination is directly connected with, and
limited to, the administration of the California Health Benefit
Exchange.

(iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is
directly connected with, and limited to, the administration of the
Small Business Health Options Program.

(g) For purposes of this section, “employer” includes a labor
union hiring hall.

(h) This section shall become operative on July 1, 1998.