GENERAL PROVISIONS
This act is known and may be cited as the Unemployment Insurance Code.
The provisions of this code insofar as they are substantially the same as existing statutory provisions relating to the same subject matter shall be construed as restatements and continuations, and not as new enactments.
Any action or proceeding commenced before this code takes effect, or any right accrued, is not affected by this code, but all procedure taken shall conform to the provisions of this code as far as possible.
Unless the context otherwise requires, the general provisions hereinafter set forth govern the construction of this code.
Division, part, chapter, article, and section headings do not in any manner affect the scope, meaning, or intent of the provisions of this code.
Whenever a power is granted to, or a duty imposed on any person or board by any provision of this code, it may be exercised or performed by any deputy or person authorized by the person or board to whom the power is granted or on whom the duty is imposed, unless it is expressly provided that the power or duty shall be exercised or performed only by the person or board to whom the power is granted or on whom the duty is imposed.
Whenever any reference is made to any portion of this code or of any other law, the reference applies to all amendments and additions thereto, now or hereafter made.
“Writing” includes any form of recorded message capable of comprehension by ordinary visual means. Whenever any notice, report, petition, permit, statement, or record is required by this code, it shall be made in writing in the English language.
“Section” means a section of this code unless some other statute is specifically mentioned, and “subdivision” means a subdivision of the section in which the term occurs unless some other section is expressly mentioned.
The present tense includes the past and future tenses; and the future, the present.
The masculine gender includes the feminine and neuter.
“Spouse” includes “registered domestic partner,” as required by Section 297.5 of the Family Code.
The singular number includes the plural and the plural the singular.
“City” includes incorporated city, city and county, municipal corporation, municipality, town and incorporated town.
“County” includes city and county.
“Shall” is mandatory and “may” is permissive.
“Oath” includes affirmation and written certification or declaration subscribed to be true under penalty of perjury.
“Signature” or “subscription” includes mark. The mark shall be made as required in the Civil Code.
If any provision of this code, or its application to any person or circumstance is held invalid, the remainder of the code, or the application of the provision to other persons or circumstances is not affected.
All persons who, at the time this code goes into effect, hold office under any of the acts repealed by this code, which offices are continued by this code, continue to hold them according to their former tenure.
Whenever any reference is made to any person, officer, board, or agency by any provision of this code, the reference applies to any other person, officer, board, or agency to whom the functions vested in the person, officer, board, or agency referred to are transferred.
The Legislature hereby declares its intent that the term “workmen’s compensation” shall hereafter also be known as “workers’ compensation.” In furtherance of this policy it is the desire of the Legislature that references to the term “workmen’s compensation” in this code be changed to “workers’ compensation” when such code sections are being amended for any purpose. This act is declaratory and not amendatory of existing law.
Except as otherwise specified, for purposes of this code, “mail,” “mailing,” or “mailed” include a writing transmitted by the United States Postal Service or other common mail carrier or by electronic transmission. For purposes of an electronic transmission, “postmark date” means the date on which the writing was sent.
DIVISION 1. UNEMPLOYMENT AND DISABILITY COMPENSATION [100. - 4751.]
PART 1. UNEMPLOYMENT COMPENSATION [100. - 2129.]
CHAPTER 1. General Provisions [100. - 144.]
ARTICLE 1. Policy and Interpretation [100. - 102.]
As a guide to the interpretation and application of this division the public policy of this State is declared as follows:
Experience has shown that large numbers of the population of California do not enjoy permanent employment by reason of which their purchasing power is unstable. This is detrimental to the interests of the people of California as a whole.
The benefit to all persons resulting from public and private enterprise is realized in the final consumption of goods and services. It is contrary to public policy to permit the supply of consumption goods and services at prices which do not provide against that harm to the population consequent upon periods of unemployment of those who contribute to the production and distribution of such goods and services.
Experience has shown that private charity and local relief cannot alone prevent the effects of unemployment. Experience has shown that if the State awaits the coming of excessive unemployment it can neither create immediately the organization necessary to orderly, economical and effective relief nor bear the financial burden of relief without disrupting its whole system of ordinary revenues and without jeopardizing its credit.
The Legislature therefore declares that in its considered judgment the public good and the general welfare of the citizens of the State require the enactment of this measure under the police power of the State, for the compulsory setting aside of funds to be used for a system of unemployment insurance providing benefits for persons unemployed through no fault of their own, and to reduce involuntary unemployment and the suffering caused thereby to a minimum.
It is the intent of the Legislature that unemployed persons claiming unemployment insurance benefits shall be required to make all reasonable effort to secure employment on their own behalf.
This part is a part of a national plan of unemployment reserves and social security, and is enacted for the purpose of assisting in the stabilization of employment conditions. The imposition of the tax herein imposed upon California industry alone, without a corresponding tax being imposed upon all industry in the United States, would, by the corresponding penalty upon California industry, defeat the very purposes of this law as set forth in this article. Therefore when existing federal legislation which provides for a tax upon the payment of wages by employers in this State, against which all or any part of the employer contributions required under this part may be credited is repealed, amended, interpreted, affected or otherwise changed in such manner that no portion of such contributions may be thus credited, then upon the date of such change, the provisions of this part requiring employer contributions and providing for payment of unemployment compensation benefits shall cease to be operative and any assets in the Unemployment Fund or Unemployment Administration Fund shall in the discretion of the State Treasurer be held in the then existing depositaries or otherwise in the State Treasury. In the case of the Unemployment Administration Fund, such money may thereafter be dealt with by the State Treasurer pursuant to the conditions of the grant thereof to the State by the United States Government or agency thereof.
All the rights, privileges or immunities conferred by this division or by acts deemed pursuant thereto shall exist subject to the power of the Legislature to amend or repeal this division at any time.
ARTICLE 2. General Definitions [125. - 144.]
Except where the context otherwise clearly indicates, the definitions set forth in this article shall govern the construction of the provisions of this division.
“American aircraft” means an aircraft registered under the laws of the United States.
“American employer” means any of the following:
An individual who is a resident of the United States.
A partnership, if two-thirds or more of the partners are residents of the United States.
A trust, if all of the trustees are residents of the United States.
A corporation organized under the laws of the United States or of any state.
A limited liability company organized under the laws of the United States or of any state.
An Indian tribe as described by Section 3306(u) of Title 26 of the United States Code.
“American vessel” means any vessel documented or numbered under the laws of the United States, and includes any vessel which is neither documented or numbered under the laws of the United States nor documented under the laws of any foreign country, if its crew is employed solely by one or more citizens or residents of the United States or corporations organized under the laws of the United States or of any state.
“Appeals Board” means the California Unemployment Insurance Appeals Board.
“Authorized regulations” means regulations promulgated pursuant to the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, as modified by the provisions of this division, and “regulation” includes the amendment or repeal of a regulation.
“Benefits” means the money payments payable to an individual, pursuant to this division, with respect to his unemployment and includes unemployment compensation benefits, federal-state extended benefits, or extended duration benefits, or disability benefits, or all of them.
“Calendar quarter” means the period of three consecutive calendar months ending on March 31st, June 30th, September 30th, or December 31st, or the equivalent thereof as may be prescribed by authorized regulations.
“Contingent fund” means the Department of Employment Development Contingent Fund.
“Benefit Audit Fund” means the Employment Development Department Benefit Audit Fund.
“Contributions” means the money payments to the Unemployment Fund, Employment Training Fund, or Unemployment Compensation Disability Fund which are required by this division.
Except as otherwise provided, “department” means the Employment Development Department, which also may be referred to as the Department of Employment Development.
“Department of Benefit Payments” or “State Department of Benefit Payments” shall be construed to refer to and mean the Employment Development Department.
Except as otherwise provided, “director” means the Director of Employment Development.
“Director of Benefit Payments” shall be construed to refer to and mean Director of Employment Development.
“Disability fund” means the “Unemployment Compensation Disability Fund.”
“Employing unit” means an individual or type of organization that has in its employ one or more individuals performing services for it within this state, and includes but is not limited to, the following individuals and organizations:
An individual or type of organization or public entity that elects coverage pursuant to any provision of this division.
A joint venture, partnership, association, trust, estate, joint stock company, insurance company, corporation whether domestic or foreign, limited liability company, whether domestic or foreign, community chest, fund, or foundation.
A public entity. As used in this section, “public entity” means the State of California (including the Trustees of the California State University), an instrumentality of this state (including the Regents of the University of California), a political subdivision of this state or any of its instrumentalities, a county, city, district (including the governing board of a school district or community college district, a county board of education, a county superintendent of schools, or a personnel commission of a school district or community college district that has a merit system pursuant to the Education Code), entities receiving state money to conduct county fairs and agricultural fairs pursuant to Sections 25905 and 25906 of the Government Code and that perform no other functions, a public authority, public agency, or public corporation of this state, an instrumentality of more than one of the foregoing, and an instrumentality of any of the foregoing and one or more other states or political subdivisions.
An instrumentality of the United States required to make payments under this division.
The receiver, trustee in bankruptcy, trustee or successor thereof, and the legal representative of a deceased person.
An Indian tribe as described by Section 3306(u) of Title 26 of the United States Code.
All individuals performing services within this state for an employing unit that maintains two or more separate establishments within this state shall be deemed to be employed by a single employing unit for all the purposes of this division. This subdivision does not apply to an Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) and the subdivisions, subsidiaries, or other business enterprises wholly owned by the Indian tribe if the tribe chooses to treat those subdivisions, subsidiaries, or other business enterprises as separate business entities for the purposes of Section 803.
A new employing unit shall not be created when there is an acquisition or change in the form or organization of an existing business enterprise, or severable portion thereof, and there is a continuity of control of the business enterprise.
Control of a business enterprise may occur by means of ownership of the organization conducting the business enterprise, ownership of assets necessary to conduct the business enterprise, security arrangements or lease arrangements covering assets necessary to conduct the business enterprise, or a contract when the ownership, stated arrangements or contract provide for or allow direction of the internal affairs or conduct of the business enterprise.
A continuity of control will exist if one or more persons, entities, or other organizations controlling the business enterprise remains in control of the business enterprise after an acquisition or change in form. Evidence of continuity of control shall include, but not be limited to, changes of an individual proprietorship to a corporation, partnership, limited liability company, association, or estate; a partnership to an individual proprietorship, corporation, limited liability company, association, estate, or the addition, deletion, or change of partners; a limited liability company to an individual proprietorship, partnership, corporation, association, estate, or to another limited liability company; a corporation to an individual proprietorship partnership, limited liability company, association, estate, or to another corporation or from any form to another form.
An employing unit described in subdivision (a) shall continue to be the same employer for the purposes of this code as before the acquisition or change in form.
This section shall not modify the provisions of Article 2 (commencing with Section 1731) of Chapter 7.
This section shall be subject to subdivision (e) of Section 982 and subdivision (d) of Section 1127.5.
If two or more business enterprises are united by factors of control, operation, and use, the director may determine that the business enterprises are one employing unit.
Control of a business enterprise shall include, but not be limited to, ownership of a majority interest in an organization, ownership of the assets used to conduct the business enterprise of the organization, security arrangements or lease arrangements regarding the assets used to conduct the business enterprise of the organization, or contract when the ownership, stated arrangements, or contract provide for or allow operation of the business enterprise.
Operation of the business enterprise, includes, but is not limited to, management, personnel policies, operating procedures, pricing, collections, and financing of the business enterprise.
Control of two or more business enterprises shall be united if the majority interest in, or control of, each organization is in one individual, entity, association, or other organization.
Unity of operation is evidenced by central financing, accounting, and management of each business enterprise which includes, but is not limited to, common management, personnel policies, operating procedures, pricing, collections, and financing.
The use of two or more business enterprises shall be united if they share a general system of operation and the enterprises are organized for common purposes, and each is coordinated with, or is a part of, the entire operation.
This section shall be subject to subdivision (e) of Section 982 and subdivision (d) of Section 1127.5.
“Federal Unemployment Tax Act” means Chapter 23 of Subtitle C of the Internal Revenue Code of 1954, or the corresponding provisions of any other federal act into which such provisions may hereafter be incorporated.
“Public employment office” means a free public employment office or branch thereof operated by this State or maintained as a part of a state-controlled system of public employment offices.
“State” includes the Commonwealth of Puerto Rico, the Virgin Islands, and the District of Columbia, as well as each of the states of the United States.
“Unemployment compensation benefits” refers to benefits payable under Part 1 of this division.
“Unemployment compensation disability benefits” or “disability benefits” refers to money payments payable under Part 2 (commencing with Section 2601) to either of the following:
An eligible unemployed individual with respect to his or her wage losses due to unemployment as a result of illness or other disability, resulting in that individual being unavailable or unable to work.
An eligible individual with respect to his or her wage losses who is unable to work due to caring for a seriously ill or injured family member or bonding with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.
“Unemployment insurance” wherever it appears in this division means “unemployment compensation.”
“Unemployment Trust Fund” means the Unemployment Trust Fund established and maintained pursuant to Section 904 of the Federal Social Security Act as amended.
“United States” includes the states, the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands. An individual who is a citizen of the Commonwealth of Puerto Rico or the Virgin Islands (but not otherwise a citizen of the United States) shall be considered as a citizen of the United States.
“Week” means a period of seven consecutive days as prescribed by authorized regulation. Such regulation may prescribe that a week shall be deemed to be “in,” “within,” or “during” that benefit year which includes the greater part of such week.
“Worker contributions,” “contributions by workers,” “employee contributions,” or “contributions by employees” mean contributions to the Disability Fund.
CHAPTER 2. Administration [301. - 456.]
ARTICLE 1. Employment Development Department [301. - 340.]
There is in the Labor and Workforce Development Agency the Employment Development Department, which is vested with the duties, purposes, responsibilities, and jurisdiction heretofore exercised by the State Department of Benefit Payments or the California Health and Human Services Agency with respect to job creation activities. The Employment Development Department shall be administered by an executive officer known as the Director of Employment Development who is vested with the duties, purposes, responsibilities, and jurisdiction heretofore exercised by the Director of Benefit Payments with respect to the following functions:
Job creation activities.
Making manual computations and making or denying recomputations of the amount and duration of benefits.
Determination of contribution rates and the administration and collection of contributions, penalties and interest, including but not limited to filing and releasing liens.
Establishment, administration, and transfer of reserve accounts.
Making assessments and the administration of credits and refunds.
Approving elections for coverage or for financing unemployment and disability insurance coverage.
The Employment Development Department shall have the possession and control of all records, papers, offices, equipment, supplies, moneys, appropriations, land, and other property real or personal held for the benefit or use of the State Department of Benefit Payments in the performance of the duties, powers, purposes, responsibilities, and jurisdiction that are vested in the Employment Development Department by Section 301.
All officers and employees of the State Department of Benefit Payments who, on the operative date of the statute amending this section at the 1977 portion of the 1977–78 Regular Session of the Legislature, are serving in the state civil service, other than as temporary employees, and engaged in the performance of a function vested in the Employment Development Department by Section 301 shall be transferred to the Employment Development Department. The status, positions, and rights of such persons shall not be affected by the transfer and shall be retained by them as officers and employees of the Employment Development Department pursuant to the State Civil Service Act, except as to positions exempt from civil service.
The Director of Employment Development shall be appointed by the Governor, subject to the approval of the Senate, and shall serve as director at the pleasure of the Governor. The annual salary of the Director of Employment Development shall be as provided for by Chapter 6 of Part 1 of Division 3 of Title 2 of the Government Code.
There shall be five deputy directors in the Employment Development Department who shall be appointed by the Governor subject to the approval of the Senate and shall hold office at the pleasure of the Governor. The salary of the deputy directors shall be fixed in accordance with law.
Whenever a reference to this division is made in this article it shall also include all other divisions of this code.
Regulations for the administration of the functions of the Employment Development Department under this code shall be adopted, amended, or repealed by the Director of Employment Development as provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
All regulations heretofore adopted by the Director of the Department of Human Resources Development shall remain in effect and shall be fully enforceable unless and until readopted, amended or repealed by the Director of Employment Development.
All regulations heretofore adopted by the Director of Benefit Payments pursuant to this code and in effect immediately preceding the operative date of the amendment of this section enacted by the Legislature during the 1977–78 Regular Session, shall remain in effect and shall be fully enforceable unless and until readopted, amended or repealed by the Director of Employment Development.
The Director of Employment Development may adopt, amend, or repeal such regulations as are reasonably necessary to enforce his functions under this code.
The department shall provide, upon the request of any person or entity, any or all of the department’s rules, regulations, guidelines, bulletins, manuals, standards of general application, or the departmental responsibilities under any state or federal law, along with any subscription service necessary to assure prompt receipt of additional amendments to any of the above materials. The department shall charge a fee to cover (1) the costs of reproducing the materials and (2) postage associated with a subscription service; however, one free copy of the materials shall be provided to each state legislator, upon request.
Any documents properly classified as confidential shall be exempt from the requirements of this section.
The Director of Employment Development or the Department of Employment Development may prescribe the extent, if any, to which any rule, regulation or interpretation issued or promulgated in accordance with the provisions of this code shall be applied without retroactive effect.
The Director of Employment Development shall appoint such assistants except personnel of the appeals division as he finds necessary for the administration of this division, subject to the provisions of the Government Code, and may delegate to any of the officers or employees of the department such powers and duties as he considers necessary for the proper administration of this division.
The Director of Employment Development and his authorized representatives in the enforcement of the division shall have all the powers of a head of a department as set forth in Article 2 (commencing with Section 11180) of Chapter 2, Part 1, Division 3, Title 2 of the Government Code. For the purpose of any investigation, hearing, or proceeding under this division, the Director of Employment Development may delegate his power in relation thereto to any deputy, or other person properly authorized in writing by him.
The appeals division within the department includes the appeals board and its clerical staff and assistants and the administrative law judges and their supervisors and clerical staff and assistants.
For purposes of this section, the following definitions shall apply:
“Additional languages” means the top 8 to 15 non-English and nonprimary languages used by limited English proficient adults in California according to the most recent American Community Survey by the United States Census Bureau.
Whether referring to written or spoken languages, the eight additional languages in 2021 are Arabic, Farsi, Punjabi, Russian, Japanese, Hindi, Mon-Khmer (Cambodian), and Thai.
The department shall thereafter review, evaluate, and update the list of additional languages at least every three years. In determining how many languages to include in the definition of “additional languages,” the department may consider various data sources, including, but not limited to, the United States Census Bureau, including the American Community Survey, other state and local government agencies, feedback from community-based organizations, and the department’s own data tracking measures.
“Limited English proficient” means individuals who do not speak English as their primary language and who have a limited ability to read, write, understand, or speak English.
“Linguistic variant” means a distinct form of a language used by people from a specific country or region.
“Multilingual access portal” means the section of the department’s website that synthesizes critical website content and features all translated vital unemployment insurance documents.
“Primary languages” means the top seven non-English languages used by limited English proficient adults in California according to the 2019 American Community Survey by the United States Census Bureau.
When referring to written languages, the top seven languages are Spanish, traditional Chinese, simplified Chinese, Vietnamese, Tagalog, Korean, and Armenian.
When referring to spoken languages, the top seven languages are Spanish, Cantonese, Mandarin, Vietnamese, Tagalog, Korean, and Armenian.
“Vital information” means information, whether written, oral, or electronic, that is necessary for an individual to understand how to obtain any aid, benefit, service, or training or is required by law.
There shall be maintained within an appropriate division of the department, a bureau, section, or unit relating to education and public instruction for the purpose of informing employers and workers of their rights and responsibilities under this code, and of instructing the public generally concerning its basic purposes, provisions, and operations. All standard information employee pamphlets concerning unemployment and disability insurance programs shall be printed in English and the primary languages.
Commencing no later than June 1, 2022, each application for unemployment insurance shall contain a section asking the individual to identify their preferred written and spoken or signed languages to be kept in the individual’s claims record.
Commencing no later than January 1, 2022, the department shall provide oral and signed language unemployment insurance services in real time by qualified interpreters or qualified bilingual staff.
If the department staff cannot obtain interpretation in the individual’s language and linguistic variant in real time after good faith efforts to acquire language services, the department shall provide the individual with a return telephone or relay call in the individual’s language within a reasonable timeframe.
Upon the individual’s request, a qualified interpreter shall read the department’s documents and notices aloud in the individual’s preferred language within a reasonable timeframe.
Commencing no later than December 1, 2022, the department shall do all of the following:
Provide dedicated phone lines for unemployment insurance claims in the primary languages in an effort to provide consistent wait times across all phone lines and collect and review data on phone usage by limited English proficient individuals.
Translate static, nonpersonalized documents containing unemployment insurance vital information into the primary and additional languages.
If the individual’s language is not among the primary or additional languages, then upon the individual’s request, provide the individual with translation or oral or signed interpretation of documents in their preferred language.
All vital documents described in this subdivision shall be available on the department website.
The department shall translate the UI Online interface in the primary languages. The department shall make the translated UI Online interface available upon completion of the translation of each primary language, ending no later than April 1, 2024.
The department shall establish and host a primary language multilingual access portal for unemployment insurance. The department shall make the content available upon completion of the translation of each primary language, ending no later than February 1, 2024.
Before the completion of the multilingual access portal described in subdivision (g), the department shall display both of the following on its internet website organized and translated by language:
Available translated notices and other vital documents.
The appropriate department phone number or phone numbers for individuals to contact when seeking multilingual unemployment insurance services in their preferred written or spoken language.
Commencing no later than March 1, 2022, the department shall do all of the following:
Conduct targeted outreach to limited English proficient communities to solicit advice on policies and practices affecting individuals who are eligible for the department’s services and benefits.
Market and promote its programs and services in the primary languages to the general public and limited English proficient communities.
Establish a grant program lasting at least two years to provide funding for community-based organizations to provide outreach and education to limited English proficient communities.
The department shall engage in regular data collection, monitoring, and oversight of multilingual access unemployment insurance services. The department shall annually report this data to the legislative budget committees.
The provision of unemployment insurance language services shall not cause an undue delay in receipt of services or benefits. If the department’s provision of language services unduly delays an individual’s receipt of services or benefits, the individual’s time to meet the department’s deadlines shall be extended for the period of time necessary to receive the language services.
No later than July 1, 2022, the department shall report to the legislative budget and policy committees on the status of multilingual access services to be delivered to individuals participating in the State Disability Insurance and Paid Family Leave programs.
A report to be submitted pursuant to this section shall be submitted in compliance with Section 9795 of the Government Code.
The Director of Employment Development shall maintain a field investigating staff, whose function shall embrace investigation throughout the state of violations of this code, to the end that its provisions are more adequately and strictly enforced.
The Director of Employment Development shall comply with all applicable provisions of the Government Code relating to contracts, budgets and other fiscal matters, including Sections 13320 to 13324, inclusive, of that code, in the same manner and to the same extent as other state agencies, insofar as such provisions are not inconsistent with the provisions of the Social Security Act and the rules and regulations of the Secretary of Labor.
The Director of Employment Development shall make such reports in such form and containing such information as the Secretary of Labor may from time to time require, and shall comply with such provisions as the secretary may from time to time find necessary to assure the correctness and verification of such reports.
The director shall periodically review policies and practices used to determine eligibility for and the amount of benefits in the unemployment insurance program to identify those policies and practices that do all of the following:
Result in delayed eligibility determinations or benefit payments.
Increase workload for the department.
Provide little or no value in identifying or preventing fraud or abuse in the unemployment insurance program.
The director shall report to the Legislature the results of the first review on or before July 1, 2015, and may submit subsequent reports thereafter. The report shall be submitted in compliance with Section 9795 of the Government Code.
For the purposes of this part, upon appropriation by the Legislature, the department shall do all of the following:
Report at least once every six months on its internet website all of the following information:
The amount for which it has issued overpayment notices.
The amount of overpayments waived.
The amount repaid related to those overpayment notices.
The reports shall encompass benefit payments made by the department from March 1, 2020, until January 12, 2021.
The department shall publish the information required under this paragraph until the repayment period for all the notices has elapsed.
Immediately perform a risk assessment of its deferred workloads, including deferred eligibility determinations and retroactive certifications.
The department’s risk assessment performed under subparagraph (A) shall take into account the relative likelihood that it issued payments to ineligible claimants by considering historic overpayment trends, as well as the new or altered eligibility requirements the federal government adopted in response to the COVID-19 pandemic. If necessary, the department shall either partner with another state agency or contract for assistance in performing the analysis in support of this assessment.
Develop a workload plan that prioritizes its deferred workloads based on the risk assessment performed pursuant to paragraph (2) and determine the staffing and information technology resources needed to accomplish the work within expected timeframes.
Hire and train staff as necessary in order to carry out the workload plan. Using the workload plan, the department shall process the deferred work in alignment with all of the following:
The need to pay timely benefits to new or continued claimants.
Federal expectations about the urgency of the deferred work.
Any deadlines by which the department may no longer be allowed to recoup inappropriately paid benefits.
Immediately begin modeling workload projections that account for possible scenarios that would cause a spike in unemployment insurance claims. The department shall plan its staffing around the likelihood of those scenarios, including having a contingency plan for less likely scenarios that would have a significant impact on its workload.
By March 1, 2022, revise its public dashboards with regard to the number of backlogged claims in order to clearly describe the difference between those waiting for payment and those that are not, and to clearly indicate the number of claims that have waited longer than 21 days for payment because the department has not yet resolved pending work on the claim.
By June 1, 2022, determine how many of its temporary automation measures for claims processing it can retain and by September 1, 2022, make those a permanent feature of its claims processing.
By June 1, 2022, determine the reasons that claimants cannot successfully complete their identity verification through secure identity verification networked, including ID.me, and work with department vendors to resolve identified problems. The department shall thereafter regularly monitor the rate of successful identity verifications to ensure that it consistently minimizes unnecessary staff intervention.
By June 1, 2022, identify the elements of the department’s Benefit Systems Modernization process that can assist the department in making timely payments and that it can implement incrementally. The department shall then prioritize implementing the elements most likely to benefit Californians.
Implement a formal policy per the recession plan, by May 1, 2022, that establishes a process for tracking and periodically analyzing the reasons why unemployment insurance claimants call for assistance.
By May 1, 2022, implement a policy for tracking and monitoring its rate of first-call resolution. The department shall review first-call resolution data at least monthly to evaluate whether it is providing effective assistance to callers.
To maximize the number of calls that department staff are able to answer, as soon as possible, the department shall add prerecorded message functionality to its phone system to advise claimants of their rights and responsibilities after they file their claim with an agent.
To provide a more convenient customer service experience, as soon as possible, the department shall implement features of its phone system that allow callers to request a callback from an agent instead of waiting on hold for assistance.
To prepare to respond to victims of identity theft who receive incorrect tax forms, the department shall, by February 15, 2022, provide information on its internet website and set up a separate email box for those individuals to contact the department and receive prompt resolution.
To the extent consistent with federal law, the department shall immediately obtain from any federally chartered financial institution or other financial institution used by the department to make benefit payments a comprehensive list of claimants’ accounts that are frozen. The department shall immediately thereafter evaluate the list, including considering using ID.me to verify claimants’ identities, to identify accounts that should be unfrozen. By March 1, 2022, the department shall direct the institution to take action to freeze or unfreeze accounts as appropriate to ensure that it provides legitimate claimants with benefits but does not pay benefits related to fraudulent claims.
To ensure that the department reviews each account that an institution reports to it as suspicious or potentially fraudulent, by February 2022, the department shall establish a centralized tracking tool that allows it to review and stop payment on claims, as appropriate. The department shall use this tool to monitor its own internal decisions and track whether the claimant responds to its requests for identity information and should, therefore, have their account unfrozen.
Upon appropriation by the Legislature, by March 1, 2022, the department shall designate a unit as responsible for coordinating all fraud prevention and detection. The department shall assign that unit sufficient authority to carry out its responsibilities and align the unit’s duties with the Government Operations Agency’s framework for fraud prevention.
The director may by authorized regulations prescribe the information required to be reported to the department by employing units under this division and employers subject to withholding tax under Division 6 (commencing with Section 13000) in order to make reports required by the Secretary of Labor, to provide information necessary to administer this code, to estimate unemployment rates or to make other estimates required for the purpose of dispensing or withholding money payments under the Welfare Reform Act of 1971, the Employment Security Amendments of 1970, the Emergency Unemployment Compensation Act of 1971, or the Workforce Investment Act of 1998, and to make any other reports or estimates that may be required by any other state or federal law. The authorized regulations of the director may include requirements for the reporting of employment, unemployment, hours, wages, earnings, the location and nature of the industrial, business, or other activity of each establishment for the conduct of business, performance of services, or industrial operations, and such other requirements as are necessary to comply with this section.
The Director of Employment Development shall make available, upon request, to any agency of the United States government charged with the administration of public works or assistance through public employment, the following information relating to recipients of unemployment compensation:
The recipient’s name.
The recipient’s address.
The ordinary occupation and employment status of each such recipient of unemployment benefits.
A statement of such recipient’s rights to further compensation under this division.
For purposes of preventing payments on fraudulent claims for unemployment compensation benefits, the Director of Employment Development shall verify, with the information provided by the Department of Corrections and Rehabilitation pursuant to Section 11105.9 of the Penal Code, that the claimant is not an inmate currently incarcerated in the state prisons.
The Employment Development Department shall complete necessary system programming or automation upgrades to allow electronic monitoring of Department of Corrections and Rehabilitation inmate data to prevent payment on fraudulent claims for unemployment compensation benefits at the earliest possible date, but not later than September 1, 2023.
The department may exchange information with federal, state, or local governmental departments and agencies that are concerned with the administration of unemployment or disability insurance, or the collection of taxes that may be used to finance the administration of unemployment or disability insurance, or the relief of unemployed or destitute individuals, or legislation concerning, regulating, or in any manner affecting the obligations arising out of an employer-employee relation, and with other federal, state, or local departments or agencies of government as the department deems necessary or desirable for the proper administration of this division in accordance with authorized regulations.
The Director of Employment Development may apply for an advance to the Unemployment Fund and accept the responsibility for the repayment of such advance in accordance with the conditions specified in Title XII of the Social Security Act, as amended, to secure to this state and its citizens the advantages available under the provisions of that title.
The expense of the administration of this division shall be paid out of the Unemployment Administration Fund, unless otherwise provided for in this division.
The department may study and make recommendations as to action which might tend to:
Promote the prevention of unemployment and the stabilization of employment.
Encourage and assist in the adoption of practical methods of vocational training, retraining and guidance.
Promote the establishment and operation by governmental units and agencies of reserves for public work to be prosecuted in time of business depression and unemployment.
Promote the reemployment of unemployed workers throughout the state in any way that may seem feasible.
Reduce and prevent unemployment.
Establish the most effective methods of providing economic security through all forms of social insurance.
To accomplish the ends set forth in subdivision (a) of this section, the department may carry on and publish the results of investigations and research studies.
The department, in consultation and coordination with veterans’ organizations and veteran service providers, shall do all of the following:
Research the needs of veterans throughout the state and develop a profile of veterans’ employment and training needs.
Develop a statewide plan for the equitable distribution of employment funds for veterans’ employment services.
Seek federal funding for purposes of subdivision (a).
It is the intent of the Legislature that state supported Veterans Employment Training services meet the same performance standards as those required by the federal Workforce Investment Act for services provided to veterans.
Following any fiscal year in which state funds support the Veterans Employment Training services program, the Employment Development Department shall provide an annual report to the Legislature, on or before November 1, regarding the following performance measures:
The number of veterans receiving individualized, case managed services.
The number of veterans who receive individualized, case managed services entering employment.
The retention rate for veterans who enter employment.
The average earnings for veterans entering employment.
The department shall investigate and report upon the degree of unemployment hazard in various industries and occupations and their cost to the Unemployment Fund. It shall recommend to employers in industries or occupations showing an excessive cost to that fund, means for stabilizing employment. It shall also, if necessary, recommend to the Legislature a higher rate of contribution for any classification of industries or occupations in which unemployment is excessive or chronic.
The department is authorized to enter into negotiations with the United States Bureau of the Census to expand the current population survey for a sample of up to 35,000 households in California. The department shall report its findings and the result of the negotiations to the Legislature. At such time as the Bureau of the Census is prepared to undertake the workload involved in expanding California’s portion of the population survey, the department shall submit to the Legislature a budget request for funds not available from other sources to finance a contract with the Bureau of the Census. When sufficient funds are made available through the budget process or from other sources, the department is authorized to contract with the Bureau of the Census for the purpose of expanding the current population survey to a sample of up to 35,000 households in California. Based on the results of the expanded survey, the department shall compile and publish monthly information pertaining to employment and unemployment and shall provide such information to state governmental entities, including the Legislature, which are responsible for preparing state economic projections and revenue estimates.
The director, or the director’s designee, shall serve as Chairperson of the Joint Enforcement Strike Force on the Underground Economy provided for in Executive Order W-66-93. The strike force shall include, but not be limited to, representatives of the Employment Development Department, the Department of Justice, the Department of Consumer Affairs, the Department of Industrial Relations, the California Department of Tax and Fee Administration, the Franchise Tax Board, and the Department of Insurance.
The strike force may invite the following state agencies to serve in an advisory capacity: the California Health and Human Services Agency, the Department of Motor Vehicles, the Department of Alcoholic Beverage Control, and the Department of the California Highway Patrol.
The strike force shall have the following duties:
To facilitate and encourage the development and sharing of information by the participating agencies necessary to combat the underground economy including the enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy. Duly authorized representatives of the strike force employed by an agency listed in subdivision (a) shall exchange intelligence, data, documents, confidential information, or lead referrals pursuant to this section, to the extent permitted by state and federal laws and regulations.
Any person who is involved or has been involved in the strike force pursuant to this section and at any time has obtained confidential information shall not divulge, or make known in any manner not allowed by law, any of the confidential information received by or reported to members of the strike force. Confidential information authorized to be exchanged pursuant to this section shall retain its confidential status and shall otherwise remain subject to the confidentiality provisions contained in applicable federal and state laws.
Participating agencies may also cooperate and share any appropriate information with the Labor Enforcement Task Force established pursuant to Assembly Bill 1464 of the 2011–12 Regular Session (Chapter 21 of the Statutes of 2012), to the extent related to the underground economy including the enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy permitted by state and federal laws and regulations. Members of the Labor Enforcement Task Force who have obtained confidential information pursuant to this section shall not divulge, or make known in any manner not allowed by law, any of the confidential information received from the strike force.
To improve the coordination of activities among the participating agencies.
To develop methods to pool, focus, and target the enforcement resources of the participating agencies in order to deter tax evasion and maximize recoveries from blatant tax evaders and violators of cash-pay reporting laws.
To reduce enforcement costs wherever possible by eliminating duplicative audits and investigations.
In addition, the strike force shall be empowered to:
Form joint enforcement teams when appropriate to utilize the collective investigative and enforcement capabilities of the participating members.
Develop procedures for improved information sharing among the participating agencies and the Labor Enforcement Task Force, such as shared automated information database systems, the use of a common business identification number, and a centralized debt collection system, to the extent permitted by state and federal laws and regulations.
Develop procedures to permit the participating agencies to use civil sanctions.
Provide participating agencies, including the Department of Justice, with investigative leads where collaboration opportunities exist for felony-level criminal investigations, including, but not limited to, referring leads to agencies with appropriate enforcement jurisdiction, and to pursue criminal prosecution when unscrupulous businesses violate the state’s labor, employment, licensing, insurance, and tax laws with respect to the underground economy.
Evaluate, based on its activities, the need for any statutory change to do any of the following:
Eliminate barriers to interagency information sharing.
Improve the ability of the participating agencies to audit, investigate, and prosecute tax and cash-pay violations.
Deter violations and improve voluntary compliance.
Eliminate duplication and improve cooperation among the participating agencies.
Establish shareable information databases.
Establish a common business identification number for use by participating agencies.
Establish centralized, automated debt collection services for the participating agencies.
The strike force shall report to the Governor and the Legislature annually during the period of its existence, by June 30, of each year, regarding its activities.
The report shall include, but not be limited to, all of the following:
The number of cases of blatant violations and noncompliance with tax and cash-pay laws identified, audited, investigated, or prosecuted through civil action or referred for criminal prosecution.
Actions taken by the strike force to publicize its activities.
Efforts made by the strike force to establish an advertised telephone hotline for receiving referrals from the public.
Procedures for improving information sharing among the agencies represented on the strike force.
Steps taken by the strike force to improve cooperation among participating agencies, reduce duplication of effort, and improve voluntary compliance.
Recommendations for any statutory changes needed to accomplish the goals described in paragraph (8) of subdivision (c).
The director shall post, on the homepage of the department’s internet website, a hyperlink to information about the Federal Unemployment Tax Act tax credit. On the web page describing this credit, the director shall indicate whether the Unemployment Fund owes money to the federal government, and if so, the implications of that outstanding debt on employers’ unemployment insurance costs.
The director shall update the information posted pursuant to subdivision (a) on the first of each month, as applicable.
This section shall remain in effect only until January 1, 2030, and as of that date is repealed.
The department shall place a high priority on the automation of the Benefit Payment Control Program, specifically including, but not limited to, automating the ledger and collection functions.
An automated system for the Benefit Payment Control Program shall include a function which provides for the automatic issuance of monthly collection letters to unemployment insurance claimants who have received benefit overpayments.
Personnel savings from automation of the Benefit Payment Control Program, notwithstanding any other provision of law, shall be redirected to the processing of additional willful overpayment cases.
The director shall pursue the following methods to increase the collection of unemployment insurance benefit overpayments:
Developing administrative or automated procedures to insure that field offices appropriately refer cases to the central office for the timely interception of a claimant’s state tax refund.
Modifying the automated overpayment detection system so that it will identify more overpayments.
Increasing the number of potential overpayments which are reviewed by the department.
Working with the Legislature and the Governor to adequately staff the Benefit Payment Control Program.
The department, in consultation and coordination with the film and movie industry, the Governor’s Office of Business and Economic Development, and the California Film Commission shall do all of the following, contingent upon the appropriation of funds in the annual Budget Act for these specified purposes:
Research and maintain data on the employment and output of the film industry, including full-time, part-time, contract, and short duration or single event employees.
Examine the ethnic diversity and representation of minorities in the entertainment industry.
Determine the overall direct and indirect economic impact of the film industry.
Monitor film industry employment and activity in other states and countries that compete with California for film production.
Review the effect that federal and state laws and local ordinances have on the filmed entertainment industry.
Prepare and release biannually a report to the chairpersons of the appropriate Senate and Assembly policy committees that details the information required by this section.
The director shall establish procedures to identify the transfer or acquisition of a business that is undertaken for purposes of obtaining a lower unemployment insurance contribution rate.
The department shall develop and, upon appropriation by the Legislature, implement a recession plan to prepare for an increase in unemployment insurance compensation benefits claims due to an economic recession. The plan shall detail how to respond to economic downturns with a predetermined strategy that has considered the full effect on the department’s operations, and shall include, but not be limited to, all of the following:
Identifying the lessons learned from previous economic downturns, including the coronavirus (COVID-19) pandemic.
Identifying the indicators the department will be monitoring and using to project the likely upcoming workload impacts.
Identifying the steps the department will take to address increases in its workload, such as cross-training staff, changing its staffing levels, prioritizing specific tasks, and adjusting the way it performs certain work, including addressing all of the following factors:
How quickly staff can be hired.
Whether there is physical space for staff.
Whether the selected location has the technology that will be needed.
Analyzing current job duties or classifications and ensuring the right staff is doing the right work, including all of the following factors:
Whether current staff is ready to take on more complex work, increased volumes of work, or both.
Identification of a backup system for a sudden influx of work.
Assessing how existing seasonal and part-time staff is utilized, including whether the department can temporarily alter the work duties of current staff instead of hiring new staff.
Assessing how current staff can be cross-trained.
Extending hours of operation.
Identifying ways to improve self-serve services to avoid long wait times to speak to staff.
Assessing the current inventory of equipment, including both of the following:
Determining if the department should lease equipment.
Determining if there is enough equipment to support anticipated increased staffing levels.
Identifying the altered policies or procedures that the department would activate if a rise in unemployment insurance compensation benefits claims became significant enough to warrant that step.
Analyzing communications, including determining if additional lines of communication are needed, such as additional phone lines, additional email boxes, and external communications, including, but not limited to, social media.
Identifying budget and funding constraints.
Enhancing claims processing tools to ensure that the department’s identity verification processes are as robust as possible.
Assessing call center protocols by doing both of the following:
Establishing a process for tracking and periodically analyzing the reasons why unemployment insurance compensation benefits claimants call for assistance.
Analyzing the data gathered to improve the department’s call center by doing both of the following:
Identifying and resolving weaknesses or problems with the ways in which the department assists unemployment insurance compensation benefits claimants through self-serve services and non-call center options.
Developing specialized training modules to quickly train call center staff on the most commonly requested items with which callers want assistance.
Summarizing actions taken by the department to implement recommendations contained in the recession plan previously submitted in accordance with subdivision (b).
The department shall provide a copy of the recession plan to the Joint Legislative Budget Committee, the Senate Committee on Labor, Public Employment and Retirement, the Assembly Committee on Insurance, and the Department of Finance by March 1, 2022, and update the recession plan and provide a copy to the Joint Legislative Budget Committee, the Senate Committee on Labor, Public Employment and Retirement, the Assembly Committee on Insurance, and the Department of Finance every second year thereafter.
The report shall be submitted in compliance with Section 9795 of the Government Code.
The department shall conduct a feasibility study that examines the idea of extending unemployment insurance benefits to self-employed individuals and reports on what actions are necessary to implement the expansion.
The feasibility study shall include, at a minimum, all of the following:
The feasibility of including self-employed individuals in the existing unemployment insurance structure.
The type of financing structure that would be appropriate for self-employed individuals.
The benefit determination structure that would be appropriate for self-employed individuals.
Fraud mitigation considerations.
Documentation and tracking necessities.
By December 1, 2023, the department shall complete and submit the feasibility study to the Legislature, in compliance with Section 9795 of the Government Code, and to the Senate Committee on Labor, Public Employment and Retirement.
The department shall provide a plan for assessing the effectiveness of its fraud prevention and detection tools by May 1, 2022, to the Senate Committee on Labor, Public Employment and Retirement, the Assembly Committee on Insurance, the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, and the Joint Legislative Audit Committee.
The department shall provide a report with an update on its progress on performing the assessment that the plan identified pursuant to paragraph (1) by July 1, 2022, to the Senate Committee on Labor, Public Employment and Retirement, the Assembly Committee on Insurance, the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, and the Joint Legislative Audit Committee.
On or before January 1, 2023, and annually thereafter, the department shall analyze and assess the effectiveness of its fraud prevention and detection tools and shall submit this analysis and assessment to the Senate Committee on Labor, Public Employment and Retirement, the Assembly Committee on Insurance, the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, and the Joint Legislative Audit Committee. Details on fraud methods and tools may be generalized, excluded, or redacted to protect the fraud deterrence practices of the department.
The plan, assessments, and reports required by this section shall be provided consistent with the requirements of Section 9795 of the Government Code.
ARTICLE 3. California Unemployment Insurance Appeals Board [401. - 413.]
There is in the department an Appeals Division consisting of the California Unemployment Insurance Appeals Board and its employees. The appeals board consists of five members. Three members shall be appointed by the Governor, subject to the approval of the Senate. One member shall be appointed by the Speaker of the Assembly, and one member shall be appointed by the Senate Committee on Rules. All of the members of the appeals board shall be attorneys at law admitted to practice in any state of the United States, and shall have, at a minimum, one year of experience in conducting judicial or administrative hearings or five years of experience in the practice of law. Each member of the board shall devote his or her full time to the performance of his or her duties. The chairperson and each member of the board shall receive the annual salary provided for by Chapter 6 (commencing with Section 11550) of Part 1 of Division 3 of Title 2 of the Government Code. The Governor shall designate the chairperson of the appeals board from the membership of the appeals board. The person so designated shall hold the office of chairperson at the pleasure of the Governor. The chairperson shall designate a member of the appeals board to act as chairperson in his or her absence.
The amendments made to this section by the act adding this subdivision shall apply to appointments made on or after January 1, 2013.
It is the intent of the Legislature that the two California Unemployment Insurance Appeals Board member positions that are eliminated pursuant to this act be those board member positions that could have been appointed by the Governor, but were not, and that are currently vacant and have been vacant since October 2011.
Each member of the appeals board shall serve for a term of four years and until his successor is appointed and qualifies. The term of office of each member of the board appointed pursuant to the 1967 amendment to this section shall also be for four years; provided, however, that of the two board members first appointed pursuant to such amendments, one shall be appointed for a term which shall expire July 1, 1970, and one for a term which shall expire July 1, 1971.
A vacancy shall be filled by the appointing power by appointment for the unexpired term. A vacancy filled by the Governor shall be subject to the approval of the Senate.
All personnel of the Appeals Division shall be appointed, directed and controlled only by the appeals board or its authorized deputies or agents to whom it may delegate such powers.
The appeals board shall prepare a budget covering the necessary administrative costs of the Appeals Division. Such budget shall not be subject to change by the director except as agreed to by the appeals board. In the event that agreement cannot be reached, the final decision shall rest with the Governor. The director shall furnish the equipment, supplies, housing and nonpersonal and housekeeping services required by the Appeals Division and shall perform such other mechanics of administration as the appeals board and the director may agree upon.
The appeals board, or the executive officer subject to its direction and control to whom it delegates such responsibility, shall appoint and direct the activities of one or more impartial administrative law judges who shall hear and render a decision in every matter in which a petition is filed with, or an appeal is taken to, an administrative law judge as provided in this division. The compensation of the administrative law judges shall be fixed by the State Personnel Board at a rate comparable to that of other administrative law judges or hearing officers in state service whose duties and responsibilities are comparable, without regard to whether such other positions have membership in the State Bar of California as a prerequisite to appointment. No administrative law judge shall participate in any case in which he is an interested party.
The appeals board shall appoint a chief administrative law judge who shall be a member in good standing of the State Bar of California.
The duties of the chief administrative law judge include:
Serving as the chief executive of the board in the administration of the activities of administrative law judges and their staffs.
Maintaining a continuous review of the decisions of administrative law judges from which no appeal is taken to uncover decisions which appear inconsistent with the law, with established judicial decisions, with prior decisions of the board or with each other and recommending such cases to the appeals board for certification to itself for a further hearing.
In any case before it, the appeals board may delegate to any one of its members or to a special examiner or administrative law judge the taking or hearing of evidence. The appeals board and its duly authorized representatives in the performance of its duties under this division shall have the powers of a head of a department as set forth in Sections 11180 to 11191, inclusive, of the Government Code.
All decisions and orders of the Appeals Board shall be in writing.
The chairperson shall assign cases before the board to any two members of the board for consideration and decision. Assignments by the chairperson of members to the cases shall be rotated so as to equalize the workload of the members, but with the composition of the members so assigned being varied and changed to assure that there shall never be a fixed and continuous composition of members. Except as otherwise provided, the decision of the two members assigned the case shall be the decision of the appeals board. In the event that the two members do not concur in the decision, the chairperson or another member of the board designated by the chairperson shall be assigned to the panel and shall resolve the impasse. A case shall be considered and decided by the appeals board acting as a whole at the request of any member of the appeals board.
The appeals board shall meet as a whole when the chairperson may direct to consider and pass on any matters that the chairperson may bring before it, and to consider and decide cases that present issues of first impression or that will enable the appeals board to achieve uniformity of decisions by the respective members.
The appeals board, acting as a whole, may designate certain of its decisions as precedents. Precedent decisions of the appeals board are subject to Section 11425.60 of the Government Code. The appeals board, acting as a whole, may, on its own motion, reconsider a previously issued decision solely to determine whether or not the decision shall be designated as a precedent decision. Decisions of the appeals board acting as a whole shall be by a majority vote of its members. The director and the appeals board administrative law judges shall be controlled by those precedents except as modified by judicial review. If the appeals board issues decisions other than those designated as precedent decisions, anything incorporated in those decisions shall be physically attached to and be made a part of the decisions. The appeals board may make a reasonable charge as it deems necessary to defray the costs of publication and distribution of its precedent decisions and index of precedent decisions.
If a final judgment of a court of competent jurisdiction reverses or declares invalid a precedent decision of the appeals board issued under Section 409 or this section, the appeals board, acting as a whole, shall promptly modify the precedent decision to conform in all respects to the judgment of the court. The modified precedent decision shall supersede the prior precedent decision for all purposes. The appeals board shall promptly notify the director, the administrative law judges of the appeals board, and all other subscribers to the precedent decisions, of the modified precedent decision.
Any interested person or organization may bring an action for declaratory relief in the superior court in accordance with the provisions of the Code of Civil Procedure to obtain a judicial declaration as to the validity of any precedent decision of the appeals board issued under Section 409 or 409.1.
A decision of the appeals board is final, except for such action as may be taken by a judicial tribunal as permitted or required by law.
A decision of the appeals board is binding on the director with respect to the parties involved in the particular appeal.
The director shall have the right to seek judicial review from an appeals board decision irrespective of whether or not he or she appeared or participated in the appeal to the administrative law judge or to the appeals board.
Notwithstanding any other provision of law, the right of the director, or of any other party except as provided by Sections 1241, 1243, and 5313, to seek judicial review from an appeals board decision shall be exercised not later than six months after the date of the decision of the appeals board or the date on which the decision is designated as a precedent decision, whichever is later.
The appeals board shall attach to all of its decisions where a request for review may be taken, an explanation of the party’s right to seek such review.
The appeals board, acting as a whole, may promulgate rules or amend or rescind rules pertaining to hearing appeals and other matters falling within its jurisdiction. All these rules, amendments thereto, or repeals thereof, shall be made in accordance with the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
The appeals board acting as a whole may, by notice mailed to the director and the parties prior to the mailing of an administrative law judge’s decision on an appeal or petition under this division pending before any administrative law judge, on its own motion either:
Transfer the proceedings to another administrative law judge; or
Remove the proceedings to itself for review and decision.
If the appeals board removes any proceedings to itself for review and decision pursuant to this section, the appeals board may order the taking of additional evidence and may affirm, reverse, modify, or set aside any findings or action of the department from which the appeal or petition to the administrative law judge was taken in the proceedings. The appeals board shall promptly notify the department and the parties to the proceedings of its order or decision.
The appeals board acting as a whole may, by notice mailed to the director and the parties not later than 30 days after the mailing of an administrative law judge’s decision on an appeal or petition under this division to the administrative law judge, on its own motion either:
Set aside the decision of the administrative law judge and remand the proceedings to another administrative law judge for review and decision; or
Remove the proceedings to itself for review and decision.
If the appeals board removes any proceedings to itself for review and decision pursuant to this section, the appeals board may order the taking of additional evidence and may affirm, reverse, modify or set aside the decision of the administrative law judge. The appeals board shall promptly notify the department and the parties to the proceedings of its order or decision.
Notwithstanding any other provision of this division, no decision of an administrative law judge under this division shall be final if the appeals board pursuant to this section sets aside such decision or removes the proceedings to itself for review and decision.
ARTICLE 4. Interstate and Federal Cooperation [451. - 456.]
The administration of this division and of other state and federal unemployment compensation and public employment service laws will be promoted by cooperation between this State and such other states and the appropriate federal agencies in exchanging services, and making available facilities and information. The director may make investigations, secure and transmit information, make available services and facilities and exercise the other powers provided with respect to the administration of this division which he finds necessary or appropriate to facilitate the administration of any state or federal unemployment compensation or public employment service law, and may accept and utilize information, services and facilities made available to this State by an agency charged with the administration of any such other state or federal law.
To the extent permissible under the laws and Constitution of the United States, the director may enter into or cooperate in arrangements whereby facilities and services provided under the unemployment compensation law of any foreign government, may be utilized for the taking of claims and the payment of benefits under the Unemployment Insurance Law of this State or a similar law of such government.
To encourage cooperation between this state and other states in the enforcement of the unemployment insurance law of each state and to further coordinate the nationwide system of unemployment insurance in the United States and its territories:
The courts of this state shall recognize and enforce liabilities for unemployment contributions, penalties, interest, and benefit overpayments imposed by other states which extend a like comity to this state.
The Attorney General may commence action in any other jurisdiction by and in the name of the department to collect unemployment contributions, penalties, interest, and benefit overpayments legally due this state. The officials of other states which extend a like comity to this state may sue for the collection of such contributions, penalties, interest, and benefit overpayments in the courts of this state. A certificate by the Secretary of State under the Great Seal of the state that the officers of the department designated by the director have authority to collect the contributions, penalties, interest, and benefit overpayments is conclusive evidence of such authority.
The Attorney General may commence action in this state as agent for and on behalf of any other state to enforce judgments and liabilities for unemployment insurance contributions, penalties, interest and benefit overpayments due such state which extends a like comity to this state. The requesting state shall pay the court costs.
The director may enter into reciprocal arrangements with authorized agencies of other states or of the Federal Government, or both, whereby:
Services customarily performed in more than one state by an individual for a single employer shall be deemed to be services performed entirely within any one of the states (i) in which any part of the individual’s service is performed, or (ii) in which the individual has his residence, or (iii) in which the employer maintains a place of business, if there is in effect as to such services an election by the employing unit with the acquiescence of the individual, approved by the agency charged with the administration of such state’s unemployment compensation law pursuant to which all the services performed by such individual for such employer are deemed to be performed entirely within such state.
Services on vessels engaged in interstate commerce wherever performed shall be deemed performed within this State or any other state on the basis of the location of the operating office of the employer from which the operations of the vessel are ordinarily and regularly supervised, managed, directed, and controlled.
The director may enter into reciprocal arrangements with authorized agencies of other states or of the Federal Government, or both, whereby:
Potential rights to benefits accumulated under the unemployment compensation laws of one or more states or of the Federal Government, or both, may constitute the basis for the payment of benefits through a single appropriate agency under terms which the director finds will be fair and reasonable to all affected interests and which will not result in any substantial loss to the fund.
Wages or services in employment subject to an unemployment compensation law of another state or of the Federal Government shall be deemed to be wages in employment for employers for the purpose of determining an individual’s rights to unemployment compensation benefits under this part, and wages in employment for employers as defined in this part shall be deemed to be wages or services on the basis of which unemployment compensation under the law of another state or of the Federal Government is payable, but no such arrangement shall be entered into unless it contains provisions for reimbursements to the Unemployment Fund for such of the unemployment compensation benefits paid under this part upon the basis of such wages or services, and provisions for reimbursements from the Unemployment Fund for such of the compensation paid under such other law upon the basis of wages for employment as defined in this part as the director finds will be fair and reasonable to all affected interests. Reimbursements paid from the Unemployment Fund pursuant to this subdivision shall be deemed to be unemployment compensation benefits for the purposes of this part. The director may make to other state and federal agencies and receive from such other state or federal agencies reimbursements from or to the fund, in accordance with arrangements entered into pursuant to this subdivision.
This state shall participate in any arrangements for the payment of compensation on the basis of combining an individual’s wages and employment covered under this division with his wages and employment covered under the unemployment compensation law of other states which are approved by the Secretary of Labor in consultation with the state unemployment compensation agencies as reasonably calculated to assure the prompt and full payment of compensation in such situations. Any such arrangement shall include provisions for both of the following:
Applying the base period of a single state law to a claim involving the combining of an individual’s wages and employment covered under two or more state laws.
Avoiding duplicate use of wages and employment by reason of such combining.
Notwithstanding any other provision of this division, benefits shall not be denied or reduced to an individual solely because he files a claim in another state, or a contiguous country with which the United States has an agreement with respect to unemployment compensation, or because he resides in another state or such a contiguous country at the time he files a claim for unemployment compensation.
The director may enter into reciprocal arrangements with authorized agencies of other states or of the Federal Government, or both, whereby employer contributions due under this part with respect to wages for employment shall be deemed to have been paid to the Unemployment Fund of this State as of the date payment of such contributions was made under another state or federal unemployment compensation law. No arrangement shall be entered into pursuant to this section unless it contains provisions for such reimbursement to the fund of such contributions and the actual earnings thereon as the director finds will be fair and reasonable to all affected interests. The director may collect contributions in like manner for such agencies of other states and the Federal Government administering unemployment compensation laws and remit such contributions to such agencies under appropriate reciprocal arrangements.
CHAPTER 3. Scope or Coverage [601. - 832.]
ARTICLE 1. Employment [601. - 611.]
“Employment” means service, including service in interstate commerce, performed by an employee for wages or under any contract of hire, written or oral, express or implied.
For the purpose of this division only, “employment” includes any service in an artistic or literary capacity performed by an individual pursuant to a collective bargaining agreement between an employer and a labor organization in the motion picture, radio or television industry where the employer has the right to control and direct the services to be performed and the individual is defined as an employee under the terms of the collective bargaining agreement.
“Employment” includes an individual’s entire service, performed within, or both within and without, the state if one of the following is met:
The service is localized in the state.
The service is not localized in any state, but some of the service is performed in the state and one of the following is met:
The base of operations, or, if there is no base of operations, then the place from which that service is directed or controlled is in the state.
The base of operations or place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in the state.
For the purposes of subdivision (b), employment of an individual who is a motion picture production worker, as defined in paragraph (6) of subdivision (f) of Section 679, includes the individual’s entire service if their residence is in the state.
Service is localized within a state if either of the following apply:
The service is performed entirely within the state.
The service is performed both within and without the state, but the service performed without the state is incidental to the individual’s service within the state; for example, is temporary or transitory in nature, or consists of isolated transactions.
For purposes of this subdivision, the service outside the state of an individual who is a motion picture production worker, as defined in paragraph (6) of subdivision (f) of Section 679, is temporary or transitory if all of the following are met:
The worker is a resident of the state.
The worker is hired and dispatched from the state.
The worker intends to return to the state to seek reemployment at the conclusion of the assignment outside the state.
“Employment” includes an individual’s entire service, wherever performed within the United States or Canada, if such service is not covered under the unemployment compensation law of any other state or Canada, and the place from which the service is directed or controlled is in this state.
“Employment” includes an individual’s entire service, if such service is deemed performed in this State by virtue of an arrangement made pursuant to this division and does not include any service which by virtue of such an arrangement is deemed performed in another state.
Except as provided by Section 634.5, “employment” for the purposes of this part and Parts 3 (commencing with Section 3501) and 4 (commencing with Section 4001) includes all service performed by an individual (including blind and otherwise disabled individuals) for any public entity or Indian tribe, if the service is excluded from “employment” under the Federal Unemployment Tax Act solely by reason of Section 3306(c)(7) of Title 26 of the United States Code.
For purposes of this section, both of the following definitions apply:
“Public entity” means the State of California (including the Trustees of the California State University and Colleges, and the California Industries for the Blind), an instrumentality of this state (including the Regents of the University of California), a political subdivision of this state or any of its instrumentalities, a county, city, district (including the governing board of a school district or community college district, a county board of education, a county superintendent of schools, or a personnel commission of a school district or community college district that has a merit system pursuant to the Education Code), entities conducting fairs as identified in Sections 3101 to 3104, inclusive, of the Food and Agricultural Code, a public authority, public agency, or public corporation of this state, an instrumentality of more than one of the foregoing, and an instrumentality of any of the foregoing and one or more other states or political subdivisions.
“Indian tribe” means an Indian tribe described by Section 3306(u) of Title 26 of the United States Code.
Each individual employed to perform or to assist in performing the work of any individual employed by an employing unit shall be deemed to be employed by that employing unit for all the purposes of this division, whether or not he was hired or paid directly by the employing unit if the employing unit had actual or constructive knowledge of the work.
Whether an individual or entity is the employer of specific employees shall be determined pursuant to subdivision (b) of Section 621, except as provided in subdivisions (b) and (c).
As used in this section, a “temporary services employer” and a “leasing employer” is an employing unit that contracts with clients or customers to supply workers to perform services for the client or customer and performs all of the following functions:
Negotiates with clients or customers for such matters as time, place, type of work, working conditions, quality, and price of the services.
Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments.
Retains the authority to assign or reassign a worker to other clients or customers when a worker is determined unacceptable by a specific client or customer.
Assigns or reassigns the worker to perform services for a client or customer.
Sets the rate of pay of the worker, whether or not through negotiation.
Pays the worker from its own account or accounts.
Retains the right to hire and terminate workers.
If an individual or entity contracts to supply an employee to perform services for a customer or client, and is a leasing employer or a temporary services employer, the individual or entity is the employer of the employee who performs the services. If an individual or entity contracts to supply an employee to perform services for a client or customer and is not a leasing employer or a temporary services employer, the client or customer is the employer of the employee who performs the services. An individual or entity that contracts to supply an employee to perform services for a customer or client and pays wages to the employee for the services, but is not a leasing employer or a temporary services employer, pays the wages as the agent of the employer.
In circumstances which are in essence the loan of an employee from one employer to another employer wherein direction and control of the manner and means of performing the services changes to the employer to whom the employee is loaned, the loaning employer shall continue to be the employer of the employee if the loaning employer continues to pay remuneration to the employee, whether or not reimbursed by the other employer. If the employer to whom the employee is loaned pays remuneration to the employee for the services performed, that employer shall be considered the employer for the purposes of any remuneration paid to the employee by the employer, regardless of whether the loaning employer also pays remuneration to the employee.
If the services performed during one-half or more of any pay period by an employee for the person employing him constitute employment, all the services of the employee for that period shall be deemed to be employment; but if the services performed during more than one-half of any pay period by an employee for the person employing him do not constitute employment, then none of the services of the employee for that period shall be deemed to be employment.
As used in this section “pay period” means a period of not more than 31 consecutive days for which a payment of remuneration is ordinarily made to the employee by the person employing him.
“Employment”, except as provided by Section 634.5, includes service excluded from “employment” under the Federal Unemployment Tax Act solely by reason of paragraph (8) of Section 3306(c) of that act because it is service performed in the employ of a religious, charitable, educational, or other nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code of 1954 which is exempt from income tax under Section 501(a) of that code.
“Employment” includes service performed for an employing unit on or in connection with an American vessel operating on navigable waters within or within and without the United States or on or in connection with an American aircraft operating within or within and without the United States, if the employing unit maintains in this state an operating office from which the operations of the American vessel or American aircraft are ordinarily and regularly supervised, managed, directed, and controlled, and such services are included in “employment” under the Federal Unemployment Tax Act.
All of the provisions of this division shall be applicable to an employing unit and to service performed in “employment” under this section in the same manner and to the same extent as to all other employers, and the wage credits given to, and the payment of benefits to, any employee of an employing unit under this section shall be in the same amount, on the same terms, and subject to the same conditions as applied to employees of other employers under this division.
“Employment” shall include the service of an individual who is a citizen of the United States, performed outside the United States (except in Canada), after December 31, 1971, in the employ of an American employer as defined in Section 125.4 other than service that is deemed “employment” under Section 602 or 603 or the equivalent provisions of another state’s unemployment compensation law, if:
The employer’s principal place of business in the United States is located in this state; or
The employer has no place of business in the United States, but:
The employer is an individual who is a resident of this state; or
The employer is a corporation or limited liability company that is organized under the laws of this state; or
The employer is a partnership or a trust and the number of the partners or trustees who are residents of this state is greater than the number who are residents of any one other state; or
None of the criteria of subdivisions (a) and (b) of this section is met but the employer has elected coverage in this state or, the employer having failed to elect coverage in any state, the individual has filed a claim for benefits, based on such service, under this division.
“Employment” includes agricultural labor.
ARTICLE 1.5. Employee [621. - 623.]
“Employee” means all of the following:
Any officer of a corporation.
Any individual providing labor or services for remuneration has the status of an employee rather than an independent contractor unless the hiring entity demonstrates all of the following conditions:
The individual is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
The individual performs work that is outside the usual course of the hiring entity’s business.
The individual is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
As an agent-driver or commission-driver engaged in distributing meat products, vegetable products, fruit products, bakery products, beverages (other than milk), or laundry or drycleaning services, for their principal.
As a traveling or city salesperson, other than as an agent-driver or commission-driver, engaged upon a full-time basis in the solicitation on behalf of, and the transmission to, their principal (except for sideline sales activities on behalf of some other person) of orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments for merchandise for resale or supplies for use in their business operations.
As a home worker performing work, according to specifications furnished by the person for whom the services are performed, on materials or goods furnished by that person that are required to be returned to that person or a designee thereof.
Any individual whose services are in subject employment pursuant to an election for coverage under any provision of Article 4 (commencing with Section 701) of this chapter.
Any member of a limited liability company that is treated as a corporation for federal income tax purposes.
“Employee” also means any individual who is an employee, pursuant to Section 2750.5 of the Labor Code, of a person who holds a valid state contractor’s license pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code.
When subdivision (a) does not apply, “employee” shall also mean any individual who is an employee, pursuant to Section 2750.5 of the Labor Code, of a person who is required to obtain a valid state contractor’s license pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code.
“Services in his or her capacity as a director” includes either:
Presence at meetings of the board of directors, even though no further service is performed at the meeting.
Services customarily performed by directors in attending meetings of the board of directors such as prescribing, regulating, and guiding the policies and administration of the corporation or association.
“Services in his or her capacity as a director” does not include services performed by a director in addition to, or other than those described in subdivision (b) of this section. For example, services performed as an officer of the corporation or association, or as a member of a committee which executes the policies and administrative decisions adopted by the board of directors such as advisory, appraisal, auditing, credit, examining, executive, loan or similar committees are not “services in his or her capacity as a director”.
“Employee” does not include any member of a limited liability company that is treated as a partnership for federal income tax purposes.
ARTICLE 2. Excluded Services [629. - 657.]
“Employment” does not include domestic service in a private home, except that “employment” includes domestic service in a private home if performed for an employing unit or a person who paid in cash remuneration of one thousand dollars ($1,000) or more to individuals employed in the domestic service in any calendar quarter in the calendar year or the preceding calendar year.
For purposes of subdivision (a), “employment” does not include work performed by a domestic worker for whom an employment agency, as defined in paragraph (3) of subdivision (a) or subdivision (h) of Section 1812.501 of the Civil Code, procures, offers, refers, provides, or attempts to provide domestic work in a private home, if all of the factors set forth in Section 687.2 characterize the nature of the relationship between the employment agency and the domestic worker for whom the agency procures, offers, refers, provides, or attempts to provide domestic work.
Notwithstanding subparagraph (C) of paragraph (1) of subdivision (c) of Section 621 or Section 13004, “employment” does not include service as a transcriber of depositions, court proceedings, and hearings performed away from the office of the person, firm, or association obligated to produce a transcript of these proceedings.
“Employment” does not include service performed by a child under the age of 18 years in the employ of his father or mother, or service performed by an individual in the employ of his son, daughter, or spouse, except to the extent that the employer and the employee have, pursuant to Section 702.5, elected to make contributions to the Unemployment Compensation Disability Fund.
“Employment” does not include service performed in the employ of any other state or its political subdivisions or in the employ of the United States government or of any instrumentality of the United States, but if Congress permits the states to require any instrumentalities of the United States to make payments into a fund under a state unemployment compensation act, and to comply with state regulations thereunder, then, to the extent permitted by Congress, all of the provisions of this division shall be applicable to the instrumentalities and to services performed for the instrumentalities in the same manner, to the same extent, and on the same terms as to all other employers, employing units, individuals, and services.
If this state is not certified by the Secretary of Labor under Section 3304 of the Internal Revenue Code of 1986 for any year, then the payments required of the instrumentalities and their workers with respect to the year shall be refunded from the Unemployment Fund without interest.
For purposes of coverage under Part 2 (commencing with Section 2601) of Division 1, “employment” does not include services performed as an intermittent or adjunct instructor at a postsecondary educational institution which meets the requirements of Article 8 (commencing with Section 94900) of Chapter 7 of Part 59 of the Education Code if the intermittent or adjunct instructor and the employing unit enter a written contract with the following provisions:
That any federal or state income tax liability shall be the responsibility of the party providing the services.
That no disability insurance coverage is provided under the contract.
That the party performing the services certifies that he or she is doing so as a secondary occupation or as a supplemental source of income.
This section shall not apply to services performed under a collective bargaining agreement.
This section shall become operative on January 1, 1997.
For purposes of coverage under Part 2 (commencing with Section 2601), “employment” shall not include:
Services performed for any public entity, nonprofit or for profit entity, organization, or business by an inmate of a state prison under the jurisdiction of the Department of Corrections, by an individual who is otherwise in the custody of the Department of Corrections, or by an individual who is otherwise incarcerated in any of the institutions set forth in Section 2680.
Services performed for any public entity, nonprofit or for profit entity, organization, or business by a ward in the custody of the Department of the Youth Authority.
Notwithstanding any other provision of law, a provision excluding service from “employment” does not apply to an entity defined by Section 605 or to a nonprofit organization described by Section 608, except as provided by this section. With respect to an entity defined by Section 605 or a nonprofit organization described by Section 608, “employment” does not include service excluded under Sections 629, 631, 635, and 639 to 648, inclusive, or service performed in any of the following:
In the employ of either of the following:
A church or convention or association of churches.
An organization that is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches.
By a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry or by a member of a religious order in the exercise of duties required by the order.
In the employ of an entity defined by Section 605, if the service is performed by an individual in the exercise of his or her duties as any of the following:
An elected official.
A member of a legislative body or a member of the judiciary of a state or a political subdivision of a state.
A member of the tribal council of an Indian tribe as described by Section 3306(u) of Title 26 of the United States Code.
A member of a State National Guard or Air National Guard.
An employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency.
An employee in a position that, under or pursuant to state or tribal law, is designated as either of the following:
A major nontenured policymaking or advisory position.
A policymaking or advisory position, the performance of the duties of which ordinarily does not require more than eight hours per week.
Except as otherwise provided in subparagraph (B), an election official or election worker if the amount of remuneration reasonably expected to be received by the individual during the calendar year for services as an election official or election worker is less than one thousand dollars ($1,000).
This paragraph shall not take effect unless and until the service is excluded from service to which Section 3309(a)(1) of Title 26 of the United States Code applies by reason of exemption under Section 3309(b) of that act.
By an individual receiving rehabilitation or remunerative work in a facility conducted for the purpose of carrying out a program of either:
By an individual receiving work relief or work training as part of an unemployment work relief or work training program assisted or financed in whole or in part by any of the following:
A federal agency.
An agency of a state or a political subdivision thereof.
An Indian tribe, as described by Section 3306(u) of Title 26 of the United States Code.
By a ward or an inmate of a custodial or penal institution pursuant to Article 1 (commencing with Section 2700), Article 4 (commencing with Section 2760), and Article 5 (commencing with Section 2780) of Chapter 5 of, and Article 1 (commencing with Section 2800) of Chapter 6 of, Title 1 of Part 3 of the Penal Code, Section 4649 and Chapter 1 (commencing with Section 4951) of Part 4 of Division 4 of the Public Resources Code, and Sections 883, 884, and 1768 of the Welfare and Institutions Code.
By an individual under the age of 18 years in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution.
By an individual in the sale of newspapers or magazines to ultimate consumers, under an arrangement that includes the following conditions:
The newspapers or magazines are to be sold by the individual at a fixed price.
The individual’s compensation is based on retention of the excess of the price over the amount at which the newspapers or magazines are charged to the individual, whether or not he or she is guaranteed a minimum amount of compensation for the service or is entitled to be credited with the unsold newspapers or magazines that he or she returns.
As a participant in a national service program carried out using assistance provided under Section 12571 of Title 42 of the United States Code.
“Employment” does not include service under any unemployment compensation system established by a law of the United States.
“Employment” does not include services performed in the employ of either a candidate for public office or a committee as defined in Section 82013 of the Government Code, where such services are performed in connection with an election campaign.
“Employment” does not include service performed by any of the following:
The officers and director of a corporation who are the sole shareholders of the corporation and it is not subject to the Federal Unemployment Tax Act.
The officers and director of a corporation engaged in agriculture who are shareholders of the corporation and it is not subject to the Federal Unemployment Tax Act.
An officer of a corporation who is the sole shareholder, or the only shareholder other than his or her spouse, and the service is not subject to the Federal Unemployment Tax Act.
In a private corporation, any individual who is included within the meaning of “employee” pursuant to subdivision (a) of Section 621 and who is the sole shareholder, or the only shareholder other than his or her spouse, may file a statement electing to be excluded from disability insurance coverage for benefits and contributions under this division. The election shall be effective on the first day of the calendar quarter in which the statement is filed. The election shall be effective during the remainder, if any, of the calendar year in which the statement is filed and not less than the two succeeding complete calendar years, and in all subsequent calendar quarters while the statement is in effect.
“Employment” does not include domestic service in a local college club, or local chapter of a college fraternity or sorority, except that “employment” includes domestic service in a local college club, or local chapter of a college fraternity or sorority if performed for a club, chapter, or person who paid in cash remuneration of one thousand dollars ($1,000) or more to individuals employed in such domestic service in any calendar quarter in the calendar year or the preceding calendar year.
“Employment” does not include service not in the course of the employing unit’s trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for such service is fifty dollars ($50) or more and such service is performed by an individual who is regularly employed by such employing unit to perform such service. For the purposes of this subdivision, an individual shall be deemed to be regularly employed by an employing unit during a calendar quarter only if on each of some 24 days during that quarter or the preceding calendar quarter such individual performs for such employing unit for some portion of the day service not in the course of the employing unit’s trade or business.
“Employment” does not include service performed in any calendar quarter in the employ of any organization exempt from federal income tax under Section 501(a) of the Internal Revenue Code of 1954, as amended (other than an organization described in Section 401(a) of that code), or under Section 521 of the Internal Revenue Code of 1954, as amended, if the remuneration for such service is less than fifty dollars ($50).
“Employment” does not include service performed in the employ of a school, college, or university, if such service is performed:
By a student who is enrolled and is regularly attending classes at such school, college, or university, or
By the spouse of such a student, if such spouse is advised, at the time such spouse commences to perform such service, that:
The employment of such spouse to perform such service is provided under a program to provide financial assistance to such student by such school, college, or university, and
Such employment will not be covered by any program of unemployment insurance or disability compensation.
“Employment” does not include service performed by a full-time student employed by an organized camp, as defined in Section 18897 of the Health and Safety Code and Section 3306(c)(20) of Title 26 of the United States Code.
“Full-time student” for purposes of this section means either of the following:
The individual is enrolled as a full-time student of an educational institution.
The individual is between academic years or terms under both of the following criteria:
The individual was enrolled as a full-time student at an educational institution for the immediately preceding academic year or term.
There is a reasonable assurance that the individual will be so enrolled for the immediately succeeding academic year or term after the period described in subparagraph (A).
For purposes of determining whether an individual is a full-time student under this section the construction given to the corresponding definition of “full-time student” contained in Section 3306(q) of Title 26 of the United States Code shall apply.
“Employment” does not include service performed in the employ of a foreign government (including service as a consular or other officer or employee or a nondiplomatic representative).
“Employment” does not include service performed in the employ of an instrumentality wholly owned by a foreign government:
If the service is of a character similar to that performed in foreign countries by employees of the United States Government or of an instrumentality thereof; and
If the Secretary of State shall certify to the Secretary of the Treasury that the foreign government, with respect to whose instrumentality exemption is claimed, grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States Government and of instrumentalities thereof.
“Employment” does not include services performed in the employ of an international organization.
“Employment” does not include service performed as a student nurse in the employ of a hospital or a nurses’ training school by an individual who is enrolled and is regularly attending classes in a nurses’ training school chartered or approved pursuant to state law; and service performed as an intern in the employ of a hospital by an individual who has completed a four years’ course in a medical school chartered or approved pursuant to state law.
“Employment” does not include service performed by an individual under the age of 22 who is enrolled at a nonprofit or public educational institution which normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where its educational activities are carried on as a student in a full-time program, taken for credit at such institution, which combines academic instruction with work experience, if such service is an integral part of such program, and such institution has so certified to the employer, except that this section shall not apply to service performed in a program established for or on behalf of an employer or group of employers.
“Employment” does not include service performed in the employ of a hospital, if such service is performed by a patient of such hospital.
“Employment” does not include service performed on or in connection with a vessel or aircraft not an American vessel or an American aircraft, if the employee is employed on and in connection with such vessel or aircraft when outside the United States.
“Employment” does not include service performed by an individual if:
Such service is performed by an individual under the age of 18 in the delivery or distribution of newspapers, shopping news, or magazines, not including delivery or distribution to any point for subsequent delivery or distribution, unless such service is performed by an individual under the age of 18 whose principal occupation is regular full-time work and whose attendance at school is incidental to full-time employment.
Such service is performed by an individual in, and at the time of, the sale of newspapers or magazines to ultimate consumers, under an arrangement under which the newspapers or magazines are to be sold by him at a fixed price, his compensation being based on the retention of the excess of such price over the amount at which the newspapers or magazines are charged to him whether or not he is guaranteed a minimum amount of compensation for such service, or is entitled to be credited with the unsold newspapers or magazines turned back.
“Employment” does not include services performed as a real estate, mineral, oil and gas, or cemetery broker or as a real estate, cemetery or direct sales salesperson, or a yacht broker or salesman, by an individual if all of the following conditions are met:
The individual is licensed under the provisions of Chapter 19 (commencing with Section 9600) of Division 3 of, or Part 1 (commencing with Section 10000) of Division 4 of, the Business and Professions Code, Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code, or is engaged in the trade or business of primarily inperson demonstration and sales presentation of consumer products, including services or other intangibles, in the home or sales to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis, for resale by the buyer or any other person in the home or otherwise than from a retail or wholesale establishment.
Substantially all of the remuneration (whether or not paid in cash) for the services performed by that individual is directly related to sales or other output (including the performance of services) rather than to the number of hours worked by that individual.
The services performed by the individual are performed pursuant to a written contract between that individual and the person for whom the services are performed and the contract provides that the individual will not be treated as an employee with respect to those services for state tax purposes.
“Employment” does not include services performed by an individual as a golf caddy in caddying or carrying a golf player’s clubs.
“Employment” does not include service performed as an elected or appointed official in any calendar quarter in the employ of any nonprofit fraternal corporation or association which is not subject to the Federal Unemployment Tax Act if the remuneration for such service does not exceed one hundred dollars ($100) a month.
The provisions of this section shall be applicable with retrospective effect.
“Employment” does not include services performed in the employ of a baseball club pursuant to a contract or agreement under which the baseball player agrees to perform for expenses and a share of the profits of the club, rather than for a fixed salary.
“Employment” does not include service performed by a free-lance jockey or exercise boy who is regularly licensed by the California Horse Racing Board.
“Employment” does not include services performed by a professional athlete who is neither a citizen of nor a resident of the United States or any state when he comes to the State of California for occasional or incidental professional engagements.
“Employment” does not include professional services performed by a consultant working as an independent contractor.
For the purpose of this section, there shall be a rebuttable presumption that services provided by an individual engaged in work requiring specialized knowledge and skills attained through completion of recognized courses of instruction or experience are rendered as an independent contractor. These services shall be limited to those provided by attorneys, physicians, dentists, engineers, architects, accountants, chiropractors, and the various types of physical, chemical, natural, and biological scientists. Professional services shall not include services generally provided by persons who do not have a degree from a four-year institution of higher learning relating to the specialized knowledge and skills of the professional service being provided.
For the purposes of this section, the rebuttable presumption shall not apply to an individual who enters into a contract agreement with the recipient of the professional services which establishes an employer-employee relationship. However, the existence of a contract between a nonprofit, licensed, primary care clinic, as defined in subdivision (a) of Section 1204 of the Health and Safety Code, and a health care practitioner who is licensed as a physician and surgeon, osteopathic physician and surgeon, podiatrist, optometrist, chiropractor, or psychologist shall not constitute an employer-employee relationship if the contract stipulates that the professional services rendered to the clinic are by an independent contractor, not an employee. Independent contractors who conform to the provisions of this section or primary care clinics that contract with these individuals or organizations shall not be liable for any payments that may be required under an employer-employee relationship pursuant to this code.
The department shall adopt regulations by July 1, 1996, to establish clear criteria which specify under what conditions amateur athletic officials may be considered employees.
ARTICLE 3. Subject Employers [675. - 687.2.]
“Employer” means any employing unit, which for some portion of a day, has within the current calendar year or had within the preceding calendar year in employment one or more employees and pays wages for employment in excess of one hundred dollars ($100) during any calendar quarter.
“Employer” also means any employing unit, for which services are performed that are included in “employment” solely for the purposes of Part 2 (commencing with Section 2601) of this division, which for some portion of a day, has within the current calendar year or had within the preceding calendar year one or more employees performing such services, and pays wages for such service in excess of one hundred dollars ($100) during any calendar quarter.
“Employer” also means any employing unit for which service is performed in “employment” as defined by Section 605.
“Employer” means any employing unit which pursuant to a collective bargaining agreement between an employer and a labor organization in the motion picture, radio, or television industry, pays wages as provided in Section 926.5.
Notwithstanding Sections 606.5 and 678, for the purposes of this code, “employer” means any employing unit that is a motion picture payroll services company that pays and controls the payment of wages of a motion picture production worker for services either to a motion picture production company or to an allied motion picture services company, and files a timely statement of its intent to be the employer of motion picture production workers pursuant to subdivision (b).
Notwithstanding Sections 606.5 and 678 and paragraph (1), solely for the purpose of remitting employment taxes under this code, and any related obligations arising therefrom under this code, including, but not limited to, this division and Division 6 (commencing with Section 13000), a loan-out company is the employer of the employee-owners or members who are engaged by the loan-out company to provide services to a motion picture production company or an allied motion picture services company.
For purposes of this code, and consistent with paragraph (2), neither a loan-out company nor an individual whose services are provided by a loan-out company shall be considered an employee of the motion picture payroll services company.
Any employing unit meeting the requirements of a motion picture payroll services company that intends to be treated as an employer of motion picture production workers pursuant to subdivision (a) shall file a statement with the department that declares its intent to be the employer of motion picture production workers, pursuant to this section, within 15 days after first paying wages to the workers. The statement shall include identification of each affiliated entity.
Any employing unit operating as a motion picture payroll services company as of January 1, 2007, that intends to be treated as an employer of motion picture production workers pursuant to this section, shall file a statement with the department that declares its intent to be the employer of motion picture production workers, pursuant to this section, by January 15, 2007. The statement shall include identification of each affiliated entity.
Any motion picture payroll company that quits business shall:
Within 10 days of quitting business:
File with the director a final return and report of wages of its workers, as required by Section 1116.
File all statements required by this subdivision.
Forty-five days in advance of quitting business, notify each motion picture production company and allied motion picture services company, with respect to which they have been treated as the employer of the motion picture production workers, of its intent to quit business.
The director may prevent a motion picture payroll services company that fails to file a timely statement from being treated as an employer of motion picture production workers, for a period not to exceed the period for which the statement is required.
Any statement filed by a motion picture payroll services company pursuant to this subdivision shall be applied to each affiliated entity of the motion picture payroll services company in existence at the time the statement is filed.
For each rating period beginning on or after January 1, 2007, in which an employer operating as a motion picture payroll services company obtains or attempts to obtain a more favorable rate of contributions under this section in a manner that is 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. Contributions paid in excess of the maximum rate under this section shall not be credited to the employing unit’s reserve account.
Have its reserve account and rate of contributions determined in accordance with subdivision (e).
Notify the department of the entity being created or acquired and the nature of its affiliation to that entity.
When a motion picture payroll services company transfers all or part of its business or payroll to another motion picture payroll services company the reserve account attributable to the transferor shall be transferred to the transferee motion picture payroll services company, and the transferee’s rate of contribution shall be determined in accordance with Section 1052. The transferee shall notify the department within 15 days of the transfer of the business or payroll.
For purposes of this section:
“Affiliated entity” means any one or more motion picture payroll services company or companies that are united by factors of common ownership, management, or control as prescribed by Section 1061.
“Allied motion picture services company” means any person engaged in an industry closely allied with, and whose work is integral to, a motion picture production company in the development, production, or postproduction of a motion picture, excluding the distribution of the completed motion picture and any activity occurring thereafter, and who hires from the same pool of craft and guild or union workers, actors, or extras as a motion picture production company.
“Loan-out company” means a corporation, or limited liability company that is classified as a corporation for federal income tax purposes, the principal activity of which is the performance of personal services for a motion picture production company or allied motion picture services company, provided that those services are substantially performed by an employee of the corporation who owns, on any day during the taxable year, more than 10 percent of the outstanding stock of the corporation.
“Motion picture” means a motion picture of any type, including, but not limited to, a theatrical motion picture, a television production, a television commercial, or a music video, regardless of its theme or the technology used in its production or distribution.
“Motion picture payroll services company” means any employing unit that directly or through its affiliated entities meets all of the following criteria:
Contractually provides the services of motion picture production workers to a motion picture production company or to an allied motion picture services company, or provides payments to a loan-out company as directed by a motion picture production company or an allied motion picture services company.
Is a signatory to a collective bargaining agreement for one or more of its clients.
Controls the payment of wages to the motion picture production workers and pays those wages from its own account or accounts.
Is contractually obligated to pay wages to the motion picture production workers without regard to payment or reimbursement by the motion picture production company or allied motion picture services company.
At least 80 percent of the wages paid by the motion picture payroll services company each calendar year are paid to workers associated between contracts with motion picture production companies and motion picture payroll services companies.
If the director determines that any employing unit is operating as a motion picture payroll services company but is failing to comply with any of the provisions of subparagraph (A), the employing unit is subject to determination of the employer-employee relationship pursuant to this code. When the director’s ruling becomes final, the director may preclude the employing unit from being classified as a motion picture payroll services company pursuant to this section for up to three years from the date of the determination.
“Motion picture production company” means any employing unit engaged in the development, production, and postproduction of a motion picture, excluding the distribution of the completed motion picture and any activities occurring thereafter.
“Motion picture production worker” means an individual who provides services to a motion picture production company or allied motion picture services company and who, with regard to those services, is reported under this part as an employee by the motion picture payroll services company. An individual who has been reported as an employee by the motion picture payroll services company, without regard to the individual’s status as an employee or independent contractor, shall be the employee of the motion picture payroll services company for the purposes of this code throughout the contractual period with the motion picture payroll services company.
“Wages” shall have the same meaning given the term in Article 2 (commencing with Section 926) of Chapter 4, and shall include residual payments.
If the director determines that an entity does not meet any requirement of this section, the director shall give notice of its determination to that entity pursuant to Section 1206. The notice shall contain a statement of the facts and circumstances upon which the determination was made. The entity so noticed shall have the right to petition for review of the director’s determination within 30 days of the notice, as provided in Section 1222.
The director shall prescribe the form and manner of the statements and information required to be filed or reported by this section.
Notwithstanding any other provision of law, when motion picture production workers are employed by one or more affiliated entities of a motion picture payroll services company that has elected to be treated and is being treated as the employer of those motion picture production workers pursuant to Section 679, the motion picture payroll services company may apply to the director for approval of the extension of an existing voluntary plan or plans for the payment of disability benefits to all motion picture production workers employed by all of the affiliated entities of the motion picture payroll services company. The director shall approve the extension of the voluntary plan to all of the motion picture production workers of all of the affiliated entities if he or she finds all of the following exist:
The voluntary plan to be extended was in existence at the time of the election of the motion picture payroll services company to be treated as the employer of motion picture production workers pursuant to Section 679.
The plan has been made available to all of the motion picture production workers of the employer employed in this state.
If the plan provides for insurance, the form of the insurance policies to be issued has been approved by the Insurance Commissioner and the policies are to be issued by an admitted disability insurer.
The motion picture payroll services company has consented to the extension of the plan and has agreed to make the payroll deductions required, if any, and transmit the proceeds to the plan insurer, if any.
The plan provides for the inclusion of future employees in the manner described in subparagraph (A) of paragraph (2) of subdivision (b).
The plan will be in effect for a period of not less than one year and, thereafter, continuously, unless the director finds that the motion picture payroll services company or a majority of motion picture production workers employed in this state covered by the plan has given notice of withdrawal from the plan. The notice shall be filed in writing with the director and shall be effective only on the anniversary of the effective date of the plan next following the filing of the notice, but in any event not less than 30 days from the date of the filing of the notice.
Notwithstanding the provisions of subparagraph (A), the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or on the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal from the plan is transmitted to the director not less than 30 days prior to the operative date of that law or change. If the plan is not withdrawn on 30 days’ notice because of the enactment of a law increasing the benefit amounts provided by Sections 2653 and 2655 or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to that increase or change on the operative date of the increase or change.
The amount of deductions from the wages of an employee in effect for any plan shall not be increased on a date other than an anniversary date of the effective date of the plan, except to the extent that any increase in the deductions from the wages of an employee allowed by Section 3260 permits that amount to exceed the amount of deductions in effect. The amount of deductions, for the purpose of providing coverage under the plan, shall not exceed that which would be required by Sections 984 and 985 if the employee were not covered by the plan.
The approval of the extension of the plan will not result in a substantial selection of risks adverse to the Disability Fund.
The extension of a plan approved by the director pursuant to subdivision (a) shall be deemed to have also met the consent requirements of Section 3257 if both of the following requirements are met:
The plan met the consent requirements of Section 3257 when initially adopted.
The plan provides for both of the following:
Each employee to whom the plan is applicable shall be given written notice of his or her right to reject coverage under the plan and a written statement setting forth the essential features of the plan prior to or at the time of employment. The form of the notice and of the statement shall be approved by the director.
On or before January 31 of each calendar year, each employee shall be given written notice, in a form approved by the director, of his or her right to withdraw from the plan at the beginning of any calendar quarter upon giving reasonable notice in writing directed to the motion picture payroll services company.
“Employer” also means any employing unit which employs individuals to perform domestic service in a private home, local college club, or local chapter of a college fraternity or sorority and pays wages in cash of one thousand dollars ($1,000) or more for such service during any calendar quarter in the calendar year or the preceding calendar year.
Any employing unit which qualifies as an employer under this section shall not be treated as an employer with respect to wages paid for any service other than domestic service specified by this section unless such employing unit also qualifies as an employer with respect to such other service under Section 675, 676, 677, or 678.
“Employer” also means any employing unit which employs individuals to perform domestic service comprising in-home supportive services under Article 7 (commencing with Section 12300), Chapter 3, Part 3, Division 9 of the Welfare and Institutions Code and pays wages in cash of one thousand dollars ($1,000) or more for such service during any calendar quarter in the calendar year or the preceding calendar year, and is one of the following:
The recipient of such services, if the state or county makes or provides for direct payment to a provider chosen by the recipient or to the recipient of such services for the purchase of services, subject to the provisions of Section 12302.2 of the Welfare and Institutions Code.
The individual or entity with whom a county contracts to provide in-home supportive services.
Any county which hires and directs in-home supportive personnel in accordance with established county civil service requirements or merit system requirements for those counties not having civil service systems.
Solely for the purposes of Part 2 (commencing with Section 2601) of this division, “employer” also means any employing unit which employs individuals to perform domestic service in a private home, local college club, or local chapter of a college fraternity or sorority and pays wages in cash of seven hundred fifty dollars ($750) or more to individuals employed in such service during any calendar quarter in the calendar year or the preceding calendar year.
Any employing unit which qualifies as an employer under this section shall not be treated as an employer with respect to wages paid for any service other than domestic service specified by this section unless such employing unit also qualifies as an employer with respect to such other service under Section 675, 676, 677, or 678.
Solely for the purposes of Part 2 (commencing with Section 2601) of this division, “employer” also means any employing unit which employs individuals to perform domestic service comprising in-home supportive services under Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of the Welfare and Institutions Code and pays wages in cash of seven hundred fifty dollars ($750) or more to individuals employed in such service during any calendar quarter in the calendar year or preceding calendar year, and is one of the following:
The recipient of the services, if the state or county makes or provides for direct payment to a provider chosen by the recipient or to the recipient of the services for the purchase of services, subject to the provisions of Section 12302.2 of the Welfare and Institutions Code.
The individual or entity with which a county contracts to provide in-home supportive services.
Any county which hires and directs in-home supportive personnel in accordance with established county civil service requirements or merit system requirements for those counties not having civil service systems.
“Employer” also means any person contracting for the creation of a specially ordered or commissioned work of authorship when the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire, as defined in Section 101 of Title 17 of the United States Code, and the ordering or commissioning party obtains ownership of all of the rights comprised in the copyright in the work. The ordering or commissioning party shall be the employer of the author of the work for the purposes of this part.
Notwithstanding any other law, an employment agency, as defined in subparagraph (C) of paragraph (1) of subdivision (a) or subdivision (h) of Section 1812.501 of the Civil Code, shall not be deemed to be the employer of the domestic workers for whom it procures, offers, refers, provides, or attempts to provide work if all of the following factors exist:
There is a signed contract or agreement between the employment agency and the domestic worker that contains, at a minimum, provisions that specify all of the following:
That the employment agency shall assist the domestic worker in securing work.
How the employment agency’s referral fee shall be paid.
That the domestic worker is free to sign an agreement with other employment agencies and to perform domestic work for persons not referred by the employment agency.
The domestic worker informs the employment agency of any restrictions on hours, location, conditions, or type of work he or she will accept and the domestic worker is free to select or reject any work opportunity procured, offered, referred, or provided by the employment agency.
The domestic worker is free to renegotiate with the person hiring him or her the amount proposed to be paid for the work.
The domestic worker does not receive any training from the employment agency with respect to the performance of domestic work. However, an employment agency may provide a voluntary orientation session in which the relationship between the employment agency and the domestic worker, including the employment agency’s administrative and operating procedures, and the provisions of the contract or agreement between the employment agency and the domestic worker are explained.
The domestic worker performs domestic work without any direction, control, or supervision exercised by the employment agency with respect to the manner and means of performing the domestic work.
The following actions exercised by an employment agency shall not be considered to be the exercise of direction, control, or supervision:
Informing the domestic worker about the services to be provided and the conditions of work specified by the person seeking to hire a domestic worker.
Contacting the person who has hired the domestic worker to determine whether that person is satisfied with the agency’s referral service. This contact shall not be used to identify improvements needed in a worker’s performance and to then discipline or train the worker regarding the performance of domestic work.
Informing the domestic worker of the time during which new referrals are available.
Requesting the domestic worker to inform the employment agency if the domestic worker is unable to perform the work accepted.
The employment agency does not provide tools, supplies, or equipment necessary to perform the domestic work.
The domestic worker is not obligated to pay the employment agency’s referral fee, and the employment agency is not obligated to pay the domestic worker if the person for whom the services were performed fails or refuses to pay for the domestic work.
Payments for domestic services are made directly to either the domestic worker or to the employment agency. Payments made directly to the employment agency shall be deposited into a trust account until payment can be made to the domestic worker. Payments made to the domestic worker by the employment agency shall not be paid from any of the employment agency’s business accounts.
The relationship between a domestic worker and the person for whom the domestic worker performs services may only be terminated by either of those parties and not by the employment agency that referred the domestic worker. However, an employment agency may decline to make additional referrals to a particular domestic worker, and the domestic worker may decline to accept a particular referral.
ARTICLE 4. Elective Coverage [701. - 713.]
An employing unit, not otherwise subject to this division, which files with the director its written election to become an employer for not less than two calendar years, shall, with the written approval of the election by the director, become an employer subject to this division to the same extent as other employers as of the date stated in the approval.
Except as provided by Sections 702.1, 709, and 710, any employing unit for which services that do not constitute employment are performed, may file with the director a written election that all such services performed by individuals in its employ in one or more distinct establishments or places of business shall be deemed to constitute employment by an employer for all the purposes of this division for not less than two calendar years. Upon the written approval of the election by the director, such services shall be deemed to constitute employment subject to this division from and after the date stated in the approval.
As used in this section, “nonprofit organization” means any corporation, community chest, fund, or foundation for which services that constitute employment under Section 608 are performed and for which other services that do not constitute employment are performed, or any nonprofit organization described in Section 608 for which all services performed do not constitute employment.
No election filed by a nonprofit organization under Section 702 shall be effective for service performed after December 31, 1971. All elections for coverage filed by a nonprofit organization under Section 702 prior to January 1, 1972, shall be terminated effective December 31, 1971.
Any nonprofit organization for which any services that do not constitute employment are performed may, when requested by a written petition signed by a majority of its employees to be covered by the election, file with the director a written election that the services performed in one or more distinct establishments or places of business and to be covered by the election shall be deemed to constitute employment by an employer for all the purposes of this division for not less than two calendar years. If the director finds that a majority of the employees to be covered by the election have signed the petition, a nonprofit organization shall, upon the written approval of the director, become an employer with respect to such services subject to this division to the same extent as other employers, and services performed by its employees covered by the election, shall constitute employment subject to this division. Beginning at that time it shall withhold from the wages of employees covered by the election the contributions required for unemployment compensation disability benefits.
A nonprofit organization may exclude from coverage under an election pursuant to this section any service excluded under Section 634.5.
Notwithstanding the provisions of subdivision (d), a nonprofit organization shall not exclude from unemployment compensation disability coverage under an election pursuant to this section any service that is included in “employment” for the purposes of Part 2 (commencing with Section 2601) of this division.
In lieu of the contributions required of employers, each nonprofit organization that has elected coverage under this section may elect any method of financing coverage by an election under this section that is permitted under Section 803. Subdivision (c) of Section 801 shall apply to any such election under Section 803.
Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this section.
Any employing unit for which services that do not constitute employment under Section 631 are performed, may file with the director a written election, agreed to by both the employing unit and the individuals in its employ specified in Section 631, that all such services performed by such individuals in one or more distinct establishments or places of business shall be deemed to constitute employment by an employer for all the purposes of Part 2 (commencing with Section 2601) of this division. Upon the written approval of the election by the director, such services shall be deemed to constitute employment subject to such part from and after the date stated in the approval. Sections 704 and 707 shall apply to elections under this section.
Any employing unit who is an employer under this division may file with the director a written election to cover, for the purposes of Part 2 (commencing with Section 2601) only, services performed by any of the following:
All eligible employees who are a part of a labor organization, provided the election is the result of a negotiated agreement between the employer and the recognized employee organization.
All eligible employees in its employ in one or more distinct establishments or places of business who are not part of a labor organization, when the election is requested by a written petition signed by a majority of the eligible employees to be covered by the election.
“Eligible employee,” as used in this section, means an employee who is a California resident whose services are covered under the unemployment compensation laws of another state which does not have a disability insurance program, and who is an “employee,” as defined in Section 13004, for whom the employer complies with the personal income tax withholding provisions of Division 6 (commencing with Section 13000).
Upon the filing of an election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees who are subject to the election shall be deemed to constitute employment subject to that part. Sections 704, 707, 986, and 2903 shall apply to elections under this section.
Services not included within “employment” and performed entirely without this State, with respect to no part of which contributions are required and paid under an unemployment compensation law of any other state or of the Federal Government, shall be deemed to be employment if the individual performing such services is a resident of this State and the director approves the election of the employing unit for whom the services are performed that the entire service of such individual shall be deemed to be employment subject to this division. Such election shall be for the period, made in the manner, and subject to termination as provided in this article for other elections of coverage.
The self-employed individual is currently unable to perform his or her regular and customary work due to injury or illness.
The employing unit or self-employed individual is not normally and continuously engaged in a regular trade, business, or occupation.
The employing unit or self-employed individual intends to discontinue the regular trade, business or occupation within eight calendar quarters.
The regular trade, business, or occupation of the employing unit or self-employed individual is seasonal in its operations.
The major portion of the self-employed individual’s remuneration is not derived from his or her trade, business, or occupation.
The self-employed individual is unable to provide a copy of his or her Internal Revenue Service Schedule SE as reported on or before April 15 of the preceding year showing a net profit of at least four thousand six hundred dollars ($4,600) or to certify to an average net profit of at least one thousand one hundred fifty dollars ($1,150) per quarter since becoming self-employed or for the preceding four quarters, whichever period is less.
The employing unit or self-employed individual has failed to make a return or report, or to pay contributions within the time required by this division and there is an unpaid amount of contributions owing by the employing unit or self-employed individual.
A prior elective coverage agreement entered into pursuant to Section 708 or 708.5 has been terminated by the department under Section 704.1 or by means of a written application for termination as required by this division, and the individual has not completed a waiting period of 18 consecutive months from the date of termination.
The waiting period for reinstatement to the elective coverage program may be waived for any individual who becomes eligible for coverage after being terminated under paragraph (1), (2), (4), or (5) of subdivision (a) of Section 704.1, upon receipt by the department of an application for coverage to be effective the first day of the quarter in which the application is received.
The employing unit or any officer or agent of or person having charge of the affairs of the employing unit, or the self-employed individual has been convicted within the preceding eight consecutive calendar quarters of any violation under Chapter 10 (commencing with Section 2101). For the purposes of this subdivision, a plea or verdict of guilty or a conviction following a plea of nolo contendere is deemed to be a conviction irrespective of whether an order granting probation or other order is made suspending the imposition of the sentence or whether sentence is imposed but execution thereof is suspended.
For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2.
Notwithstanding any other provision of this division, the director may terminate any elective coverage agreement under this article if he or she finds that any of the following conditions exist:
The employing unit or self-employed individual is not normally and continuously engaged in a regular trade, business, or occupation.
The employing unit or self-employed individual has discontinued the regular trade, business, or occupation.
The regular trade, business, or occupation of the employing unit or self-employed individual is seasonal in its operations.
This paragraph shall not apply to any public entity.
The major portion of the self-employed individual’s remuneration is not derived from his or her trade, business, or occupation.
The self-employed individual reports a net profit of less than four thousand six hundred dollars ($4,600) on his or her Internal Revenue Service Schedule SE for a third consecutive year.
The employing unit or self-employed individual has failed to make a return or report, or to pay contributions within the time required by this division and there is an unpaid amount of contributions owing by the employing unit or self-employed individual, except when the elective coverage agreement has been in effect for less than two complete calendar years.
The employing unit or self-employed individual, or a representative thereof, is found by the director to have filed a false statement in order to be considered eligible for elective coverage.
The employing unit or any officer or agent of or person having charge of the affairs of the employing unit, or the self-employed individual is convicted of any violation pursuant to Chapter 10 (commencing with Section 2101). For the purposes of this paragraph, a plea or verdict of guilty or a conviction following a plea of nolo contendere is deemed to be a conviction irrespective of whether an order granting probation or other order is made suspending the imposition of the sentence or whether sentence is imposed but execution thereof is suspended.
The director shall give to the employing unit, or to the self-employed individual, a written notice pursuant to Section 1206 of the director’s termination of the elective coverage agreement under this section. The date of termination may be the end of the calendar quarter immediately preceding the existence of any condition specified in subdivision (a), or the end of any subsequent calendar quarter thereafter, as determined by the director.
Any termination of elective coverage shall not affect the liability of the employing unit or self-employed individual for any contributions due, owing, and unpaid to the department.
For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2.
“Normally and continuously engaged in a regular trade, business, or occupation” means both of the following:
Regularly performing services and engaging in an uninterrupted pattern of work that is customary for the individual’s trade, business, or occupation.
In the case of a self-employed individual or individual who is an employer is in a trade, business, or occupation that requires a valid and active license, that individual has been issued that license. An individual operating a business without a required license shall not be considered normally engaged in a trade, business, or occupation.
“Seasonal in its operations” means any of the following:
The trade, business, or occupation is not continuous or carried on throughout the year.
The operation of the trade, business, or occupation is temporarily or intermittently suspended for regularly recurring periods of time.
The performance of services in the trade, business, or occupation is regularly suspended due to weather, climate, or other conditions.
An elective coverage agreement approved by the director pursuant to any section of this article may be terminated as of January 1st of any calendar year only if the agreement has been in effect for two calendar years and if the employing unit or self-employed individual, on or before the 31st day of January of that year, has filed with the director a written application for termination.
The director may for good cause waive the requirement of Section 705 that a written application for termination shall be filed on or before the thirty-first day of January.
Every employing unit which files an election to become an employer pursuant to Section 701, 702, 702.1, 702.5, 703, 709, or 710, or an application for termination pursuant to Section 705, shall post and maintain printed notices of such election or application on his or her premises, as prescribed by authorized regulation. Individuals in the employ of any employing unit which files an election to become an employer shall be given a reasonable opportunity to file objections or to be heard in the matter prior to the director’s approval of the election.
Any individual who is an employer under this division or any two or more individuals who have so qualified may file with the director a written election that their services shall be deemed to be services performed by individuals in employment for an employer for all the purposes of this division. Upon the approval of the election by the director, the services of those individuals shall be deemed to constitute employment for an employer for all of the purposes of this division. Regardless of their actual earnings, for the purposes of computing benefit rights and contributions under this division, they shall be deemed to have received the following remuneration for each calendar quarter:
For purposes of unemployment insurance, the highest amount of wages required to be entitled to the maximum benefit amount provided in Section 1280.
For purposes of disability insurance, the highest amount of wages required to be entitled to the maximum benefit amount provided in Section 2655.
For disability insurance contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150) except when subparagraph (B) applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the amount of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If any quarterly income credit for the period from July 1, 1993, to June 30, 1994, inclusive, was reduced prior to January 1, 1995, the amended income credit shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on Section 2655. For purposes of this division, income credits shall be included in the term “wages.”
The self-employed individual shall not pay contributions for periods of any disability, including periods for which some services are performed while disabled. The self-employed individual shall file a quarterly report of wages and certify as to the period of disability in order to maintain eligibility for elective disability insurance coverage and benefits. During periods of disability, the self-employed individual shall reduce his or her quarterly contributions by dividing the quarterly contribution amount by 91 to compute the daily contribution amount, and the daily contribution amount shall be multiplied by the number of days disabled to compute the amount by which the quarterly contributions shall be reduced. The department shall reduce income credits utilizing the same calculation method.
Any individual who is an employer under this division or any two or more individuals who have so qualified may file with the director a written election that their services shall be deemed to be services performed by individuals in employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Upon the approval of the election by the director, the services of those individuals shall be deemed to constitute employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Regardless of their actual earnings, for the purposes of computing disability benefit rights and worker contributions, they shall be deemed to have received remuneration for each calendar quarter the highest amount of wages required to be entitled to the maximum benefit award provided in Section 2655. For contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150), except when subparagraph (B) of paragraph (2) of subdivision (a) applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. The quarterly contribution shall be reduced as set forth in subparagraph (B) of paragraph (2) of subdivision (a) if a disability occurred during the quarter for which payment is being made. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the amount of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If quarterly income credits were reduced prior to January 1, 1995, the amended income credits shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on Section 2655. For purposes of this division, income credits shall be included in the term “wages.”
Any individual applying for or continuing elective coverage under this section shall be requested to sign an annual statement authorizing the department to verify the net profit declared on his or her Internal Revenue Service Schedule SE. Failure of the individual to sign a statement authorizing the department to verify income shall result in the individual being assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes.
Any individual applying for elective coverage shall submit a copy of his or her Internal Revenue Service Schedule SE filed on or before April 15 of the preceding year with his or her application for elective coverage in order to establish first-year contributions and benefits in excess of the minimum required to qualify for elective coverage.
Any self-employed individual continuing elective coverage who fails to file an Internal Revenue Service Schedule SE by April 15 of each calendar year is required to remit contributions based upon the last year the self-employed individual filed an Internal Revenue Service Schedule SE.
Any self-employed individual who has not yet filed an Internal Revenue Service Schedule SE shall be assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes.
Contributions required under this division are payable on and after the date stated in the approval of the director. The director may levy assessments under this division for any amount due when an elective coverage agreement has been in effect for less than two complete calendar years. Chapter 7 (commencing with Section 1701), relating to the collection of amount due, shall apply to this section.
No benefits shall be paid to any individual based upon remuneration deemed to have been received pursuant to this section unless all contributions due with respect to all remuneration deemed to have been received by the individual pursuant to this section have been paid to the department.
No benefits shall be paid to any individual based on elective coverage income credits in his or her base period if his or her elective coverage agreement has been terminated under paragraph (6) of subdivision (a) of Section 704.1.
Notwithstanding subdivision (b) of Section 2627, no benefits shall be paid to any individual covered under this section, with respect to periods of disability commencing on or after January 1, 1994, until he or she has been unemployed and disabled for a waiting period of seven consecutive days during each disability benefit period.
Notwithstanding Section 2653, with respect to periods of disability commencing on or after January 1, 1994, the maximum amount of benefits payable to an individual covered under this section during any one disability benefit period shall be 39 times his or her weekly benefit amount, but in no case shall the total amount of benefits payable be more than the total wages credited to the individual during his or her disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2.
Any individual who is self-employed, who is not an employer as defined in any provision of Article 3 (commencing with Section 675), of Chapter 3 of this part, and who receives the major part of his or her remuneration from the trade, business, or occupation in which he or she is self-employed, may file with the director a written election that his or her services in connection with his or her trade, business, or occupation shall be deemed to be services performed by an individual in employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Upon the approval of the election by the director, the services of that self-employed individual in connection with his or her trade, business, or occupation shall be deemed to constitute employment for an employer for the purposes of Part 2 only of this division. Regardless of his or her actual earnings, for the purpose of computing disability benefit rights and worker contributions, he or she shall be deemed to have received remuneration for each calendar quarter the highest amount of wages required to be entitled to the maximum benefit award provided in Section 2655. For contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150), except when subparagraph (B) of paragraph (2) of subdivision (a) of Section 708 applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. The quarterly contribution shall be reduced as set forth in subparagraph (B) of paragraph (2) of subdivision (a) of Section 708 if a disability occurred during the quarter for which payment is being made. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, were reduced prior to January 1, 1995, the amended income credits shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on the provisions of Section 2655. For purposes of this division, income credits shall be included in the term “wages.”
Any individual applying for or continuing elective coverage under this section shall be requested to sign an annual statement authorizing the department to verify the net profit declared on his or her Internal Revenue Service Schedule SE. Failure of the individual to sign a statement authorizing the department to verify income shall result in the individual being assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes.
Any individual applying for elective coverage shall submit a copy of his or her Internal Revenue Service Schedule SE filed on or before April 15 of the preceding year with his or her application for elective coverage in order to establish first-year contributions and benefits in excess of the minimum required to qualify for elective coverage.
Any self-employed individual continuing elective coverage who fails to file an Internal Revenue Service Schedule SE by April 15 of each calendar year is required to remit contributions based upon the last year the self-employed individual filed an Internal Revenue Service Schedule SE.
Any self-employed individual who has not yet filed an Internal Revenue Service Schedule SE shall be assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes.
Worker contributions required under this division are payable on and after the date stated in the approval of the director. The director may levy assessments under this division for any amount due when an elective coverage agreement has been in effect for less than two complete calendar years. Chapter 7 (commencing with Section 1701), relating to the collection of amounts due, shall apply to this section.
No benefits shall be paid to any individual based on elective coverage income credits in his or her base period if his or her elective coverage agreement has been terminated under paragraph (6) of subdivision (a) of Section 704.1.
No benefits shall be paid to any individual based upon remuneration deemed to have been received pursuant to this section unless all contributions due with respect to all remuneration deemed to have been received by that individual pursuant to this section have been paid to the department.
Notwithstanding subdivision (b) of Section 2627, no benefits shall be paid to any individual covered under this section, with respect to periods of disability commencing on or after January 1, 1994, until he or she has been unemployed and disabled for a waiting period of seven consecutive days during each disability benefit period.
Notwithstanding Section 2653, with respect to periods of disability commencing on or after January 1, 1994, the maximum amount of benefits payable to an individual covered under this section during any one disability benefit period shall be 39 times his or her weekly benefit amount, but in no case shall the total amount of benefits payable be more than the total wages credited to the individual during his or her disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2.
Any local public entity located in this state specified in paragraph (3) of subdivision (a) of Section 135 or Indian tribe specified in paragraph (6) of subdivision (a) of Section 135 may elect to become an employer subject to Part 2 (commencing with Section 2601) of this division with respect to all its employees, including those with civil service or tenure positions, and may file its written election with the director. That election may be made on its own motion by the appropriate governing board of the local public entity or Indian tribe making the election, or may be made by the governing board pursuant to a petition signed by a majority of the employees (including those with civil service or tenure positions) requesting the governing board to file an election with the director. Upon the filing of an election, the filing local public entity or Indian tribe shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees, including those with civil service or tenure positions, shall constitute employment subject to that part. Beginning at that time, it shall withhold from the wages of employees the contributions required for unemployment compensation disability benefits.
Any public entity or Indian tribe for which services that do constitute employment under Section 605 are performed and for which other services that do not constitute employment are performed may elect to become an employer subject to this part and Parts 3 (commencing with Section 3501) and 4 (commencing with Section 4001) of this division for not less than two calendar years with respect to those other services and to have those other services performed by its employees constitute employment subject to this part and Parts 3 and 4 for that period. Upon the filing of an election the filing public entity or Indian tribe shall, upon approval by the director, become an employer subject to this part and Parts 3 and 4 with respect to the services covered to the same extent as other employers, and those services performed by its employees, including those with civil service or tenure positions, shall constitute employment subject to this part and Parts 3 and 4 effective on the first day of the calendar quarter following the quarter in which the election is filed.
The public entity or Indian tribe may exclude from coverage under an election pursuant to this section any service excluded under Section 634.5.
Any public entity or Indian tribe that has elected coverage under this section may elect any method of financing coverage otherwise permitted under Section 803 or Article 6 (commencing with Section 821), but the same method of financing coverage shall apply to all coverage by the public entity. An Indian tribe may make separate elections for itself and for each subdivision, subsidiary, or business enterprise wholly owned by that Indian tribe. Subdivision (b) of Section 802 shall apply to any election under Section 803, except that any election under Section 803 shall be terminated on the effective date of the termination of an election for coverage under this section.
The director may require from the public entity or Indian tribe employment, financial, statistical, or other information and reports, properly verified, as may be deemed necessary by the director to carry out his or her duties under this division, which shall be filed with the director at the time and in the manner prescribed by him or her.
The director may tabulate and publish information obtained pursuant to this section in statistical form and may divulge the name of the public entity or Indian tribe.
The public entity or Indian tribe shall keep work records as prescribed by the director for the proper administration of this division.
Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this section.
Notwithstanding the provisions of Section 709, any public school employer, as defined in Section 3540.1 of the Government Code, may elect to become an employer subject to Part 2 (commencing with Section 2601) of this division, with respect to all employees who are a part of an appropriate unit established pursuant to the provisions of Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code, provided such election is the result of a negotiated agreement between the public school employer and the certified employee organization, as such terms are defined in Section 3540.1 of the Government Code. The public school employer may elect to provide coverage to its management and confidential employees, as such terms are defined in Section 3540.1 of the Government Code, and to employees not a part of an appropriate unit, but such election shall not be contingent upon coverage of other employees of the public school employer.
Upon filing of such an election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) of this division to the same extent as other employers, and services performed by its employees, including those with civil service or tenure positions, shall constitute employment subject to such part. Beginning at that time, the public school employer shall withhold from the wages of employees the contributions required for unemployment compensation disability benefits.
Notwithstanding Section 709, any public agency, as defined in Section 3501 of the Government Code, may elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who are a part of an appropriate unit established pursuant to Chapter 10 (commencing with Section 3500) of Division 4 of Title 1 of the Government Code, provided the election is the result of a negotiated agreement between the public agency and the recognized employee organization, as those terms are defined in Section 3501 of the Government Code. The public agency employer also may elect to provide coverage to its management and confidential employees and to its employees who are not a part of an appropriate unit, but the election shall not be contingent upon coverage of other employees of the public agency employer.
Upon filing of such an election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees who are subject to an election under this section shall constitute employment subject to that part.
Sections 986 and 2903 shall apply to an employer making an election pursuant to this section.
Notwithstanding Section 709, an Indian tribe as described by Section 3306(u) of Title 26 of the United States Code, including tribes not covered by the Tribal-State Gaming Compact, may elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who meet either of the following conditions:
Are employed in one or more distinct establishments or places of business.
Are a part of an employee bargaining unit provided the election is the result of a negotiated agreement between the Indian tribe and the recognized employee organization. The Indian tribe also may elect to provide coverage to its management and confidential employees and to its employees who are not a part of an employee bargaining unit, but the election by the bargaining unit shall not be contingent upon coverage of other employees of the Indian tribe.
Upon filing of an election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees who are subject to an election under this section shall constitute employment subject to that part. Sections 986 and 2903 apply to an employer making an election pursuant to this section.
This section does not affect the requirement that Indian tribes covered by the Tribal-State Gaming Compact be subject to Part 2 (commencing with Section 2601).
The State of California, as defined as an employer in Section 3513 of the Government Code, may elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who are part of an appropriate unit established pursuant to Chapter 10 (commencing with Section 3512) of Division 4 of Title 1 of the Government Code, provided the election is the result of a negotiated agreement between the State of California and the recognized employee organization, as those terms are defined in Section 3513 of the Government Code. The State of California may elect to provide coverage to its management and confidential employees and to its employees who are not part of an appropriate unit, provided that the election is not contingent upon coverage of other employees of the State of California.
Upon filing of the election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees including those with civil service or tenure positions who are subject to an election under this section shall constitute employment subject to that part.
The Trustees of the California State University, as defined as an employer in Section 3562 of the Government Code, shall elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who are part of an appropriate unit established pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 of the Government Code, provided the election is the result of a negotiated agreement between the Trustees of the California State University and a recognized employee organization of the university, as those terms are defined in Section 3562 of the Government Code, or is approved through an election held by a recognized employee organization of the university in accordance with the election procedures set forth in subdivision (d) of this section.
The Trustees of the California State University may also elect to provide coverage to its management and confidential employees and to its employees who are not a part of an appropriate unit, provided that the election is not contingent upon coverage of other employees of the Trustees of the California State University.
Upon filing of the election, the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees, including those with civil service or tenure positions, who are subject to an election under this section shall constitute employment subject to that part.
Upon an affirmative vote of the governing body of the employee organization, that governing body shall order that an election shall be conducted by secret ballot, placing on the ballot the question of whether the employees of that appropriate bargaining unit do or do not desire that the Trustees of the California State University shall become the employer of the employees of that appropriate bargaining unit for the purposes of being subject to Part 2 (commencing with Section 2601).
The recognized employee organization of the California State University shall certify the results of the election on the basis of which ballot choice receives a majority of the valid votes cast. There shall be printed on the ballot two choices, one which specifies the desire to be covered by state disability insurance and one which specifies the desire to continue to be covered by nonindustrial disability insurance.
The ballot shall present the questions in a manner that stipulates that, if the election determination is in favor of the employees’ desire to be covered by state disability insurance, this determination is intended to supplant the nonindustrial disability insurance program provided for in Article 1.2 (commencing with Section 89529.15) of Chapter 5 of Part 55 of the Education Code, after two calendar quarters have elapsed following the effective date of the state disability insurance coverage.
Notwithstanding Section 709, a community college district established pursuant to Part 43 (commencing with Section 70900) of Division 7 of the Education Code may elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who are part of an appropriate unit established pursuant to Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code, if the election is the result of a negotiated agreement between the community college district and the certified employee organization, as that term is defined in subdivision (b) of Section 3540.1 of the Government Code. The community college district employer may also elect to provide coverage to its management and confidential employees and to its employees who are not part of an appropriate unit, but the election shall not be contingent upon coverage of other employees of the community college district employer.
Notwithstanding paragraph (1), a community college district established pursuant to Part 43 (commencing with Section 70900) of Division 7 of the Education Code that employs an academic employee, as defined in Section 87001 of the Education Code, may elect to provide coverage to permanent, part-time, or temporary academic employees, including permanent, part-time, temporary, or substitute faculty or instructors, but the election shall not be contingent upon coverage of other academic employees of the community college district employer.
Upon the filing of an election pursuant to subdivision (a), the filing entity shall, upon approval by the director, become an employer subject to Part 2 (commencing with Section 2601) to the same extent as other employers, and services performed by its employees who are subject to an election under this section shall constitute employment subject to that part.
No election filed by any public entity, as defined by Section 605, under any provision of this division shall be effective for service performed after December 31, 1977, and included in “employment” pursuant to Section 605, except that elections approved under subdivision (b) of former Section 710 as in effect prior to January 1, 1978, shall continue in effect as of such date with respect to disability insurance coverage for those employee classifications that are exempt from civil service or merit system status who perform work equivalent to those employees of the building trades crafts that are covered by collective-bargaining agreements with respect to wages, hours, fringe benefits, and other terms and conditions of employment. No election filed by any nonprofit organization under any provision of this division shall be effective for service performed after December 31, 1977, and included in “employment” pursuant to Section 608. All such elections for coverage filed prior to January 1, 1978, shall be terminated effective December 31, 1977, except as otherwise provided by this section and except that elections to reimburse benefits shall continue in effect, subject to Section 803, unless terminated by the public entity or nonprofit organization, and it shall remain liable for its proportionate share of the additional cost of benefits paid, or of the cost of benefits (including extended duration benefits and federal-state extended benefits) paid and charged to its account in the manner provided by Section 1026 which are based on wages paid for services during the period of any election for reimbursement of benefits.
To the extent permitted by federal law, no contributions shall be due from any nonprofit organization organized before 1960 which received a retroactive determination after April 1, 1981, and before April 1, 1982, that it has been a nonprofit organization from the date it was organized, which made contributions with respect to service performed in its employ prior to January 1, 1982, and which elected a method of financing and elected to use prior contributions until the additional cost of benefits reimbursable by or the cost of benefits paid and reimbursable by the nonprofit organization together with the benefits charged and chargeable to the reserve account of the nonprofit organization as the result of its prior elective coverage agreement exceed the contributions made by the nonprofit organization and credited to its reserve account pursuant to its prior elective coverage agreement.
This section shall apply only to organizations which make the elections described in this section within 120 days of the time they are legally able to do so because of a change in federal law.
To the extent permitted by federal law, no contributions shall be due from any nonprofit organization which first became compulsorily subject to this part on January 1, 1978, by reason of the enactment of the federal “Unemployment Compensation Amendments of 1976” (Public Law 94-566) and the amendment to Section 634.5 by the 1978 portion of the 1977–78 Regular Session, which elects a method of financing under Section 803 when such election first becomes available, but not later than April 1, 1978, and which also elects to use contributions paid pursuant to an elective coverage agreement of such nonprofit organization in effect prior to January 1, 1978, until the cost of benefits paid and reimbursable by the nonprofit organization together with the benefits charged and chargeable to the reserve account of the nonprofit organization as the result of its prior elective coverage agreement exceed the contributions made by the nonprofit organization and credited to its reserve account pursuant to its prior elective coverage agreement.
ARTICLE 5. Elections for Financing Unemployment Insurance Coverage [801. - 806.]
As used in this section, “nonprofit organization” means any corporation, community chest, fund, or foundation for which services are performed that constitute employment by compulsory coverage under Section 608.
A nonprofit organization may, in lieu of the contributions required of employers, elect to finance its liability for unemployment compensation benefits, extended duration benefits, and federal-state extended benefits coverage under this division by any method of financing coverage that is permitted under Section 803.
Any election under Section 803 of a method for financing coverage under this section shall, upon the written approval of the director, take effect with respect to services performed from and after the first day of the calendar quarter in which the election is filed with the director, and shall continue in effect for not less than five full calendar years. Thereafter the election under Section 803 may be terminated as of January 1 of any calendar year only if the nonprofit organization, on or before the 31st day of January of that year, has filed with the director a written application for termination. The director may for good cause waive the requirement that a written application for termination shall be filed on or before the 31st day of January. In no event shall the director approve any method of financing coverage by an election under Section 803 that would establish any different method of financing coverage for any calendar quarter where an election for coverage made by a nonprofit organization under Section 702.1 elects a method of financing coverage permitted under Section 803.
To the extent permitted by federal law, a nonprofit organization which elects reimbursement financing pursuant to this section and which has a favorable reserve account on the date the election takes effect shall not be liable for the reimbursement of benefits pursuant to the election to the extent that the cost of benefits does not exceed the amount in the reserve account. Notwithstanding Section 1029, the reserve account shall not be canceled and the cost of benefits otherwise chargeable to the organization shall be charged to the reserve account until it is exhausted.
Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this section.
To the extent permitted by federal law, a nonprofit organization which before the operative date of this section elected reimbursement financing pursuant to Section 801 and which has a favorable reserve account on the operative date of this section shall not be liable for the reimbursement of benefits pursuant to the election to the extent that the cost of benefits does not exceed the amount in the reserve account. Notwithstanding Section 1029, the reserve account shall not be canceled and the cost of benefits otherwise chargeable to the organization shall be charged to the reserve account until it is exhausted.
The State of California, any other public entity (as defined by Section 605), or any Indian tribe as described by Section 3306(u) of Title 26 of the United States Code, or any subdivision, subsidiary, or business enterprise wholly owned by that Indian tribe, for which services are performed that do constitute employment under Section 605 may, in lieu of the contributions required of employers, elect to finance its liability for unemployment compensation benefits, extended duration benefits, and federal-state extended benefits with respect to those services by any method of financing coverage that is permitted under Section 803.
An election under Section 803 for financing coverage under this section shall take effect with respect to services performed from and after the first day of the calendar quarter in which the election is filed with the director, and shall continue in effect for not less than two full calendar years, unless the election is canceled by the director pursuant to paragraph (2) of subdivision (h) of Section 803. Thereafter the election under Section 803 may be terminated as of January 1 of any calendar year only if the state or other public entity or Indian tribe, on or before the 31st day of January of that year, has filed with the director a written application for termination. The director may for good cause waive the requirement that a written application for termination shall be filed on or before the 31st day of January. Financing coverage by an election under Section 803 is not valid if it would establish any different method of financing coverage for any calendar quarter where an election for coverage has also been made by the state or other public entity or Indian tribe under any provision of Article 4 (commencing with Section 701) of this chapter.
The director may require from the state and other public entity and Indian tribe, including an agent thereof, employment, financial, statistical, or other information and reports, properly verified, as may be deemed necessary by the director to carry out his or her duties under this division, which shall be filed with the director at the time and in the manner prescribed by him or her.
The director may tabulate and publish information obtained pursuant to this section in statistical form and may divulge the name of the state or other public entity or Indian tribe.
The state and other public entity and Indian tribe, including an agent thereof, shall keep any work records as may be prescribed by the director for the proper administration of this division.
Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations apply to any matter arising pursuant to this section.
In lieu of the contributions required of employers, an entity may elect any one of the following:
To pay into the Unemployment Fund the cost of benefits, including extended duration benefits and federal-state extended benefits, paid based on base period wages with respect to employment for the entity and charged to its account in the manner provided by Section 1026, pursuant to authorized regulations that shall prescribe the rate or amount, time, manner, and method of payment or advance payment or providing a good and sufficient bond to guarantee payment of contributions.
Two or more entities may, pursuant to authorized regulations, file an application with the director for the establishment of a joint account for the purpose of determining the rate of contributions they shall pay into the Unemployment Fund to reimburse the fund for benefits paid with respect to employment for those entities. The members of the joint account may share the cost of benefits, including extended duration benefits and federal-state extended benefits, paid based on the base period wages with respect to employment for those members and charged to the joint account in the manner provided by Section 1026. The director shall prescribe authorized regulations for the establishment, maintenance, and dissolution of joint accounts, and for the rate or amount, time, manner, and method of payment or advance payment or providing a good and sufficient bond to guarantee payment of contributions by the members of joint accounts, on the cost of benefits charged in the manner provided by Section 1026.
Sections 1030, 1031, 1032, and 1032.5, and any provision of this division for the noncharging of benefits to the account of an employer, do not apply to an election under subdivision (b). The cost of benefits charged to an entity under this section shall include, but not be limited to, benefits or payments improperly paid in excess of a weekly benefit amount, or in excess of a maximum benefit amount, or otherwise in excess of the amount that should have been paid, due to any computational or other error of any type by the Employment Development Department or the Department of Benefit Payments, whether or not the error could be anticipated.
The cost of benefits charged to an entity under this section shall include credits of benefit overpayments actually collected by the department, unless the department determines that the payment was made because the entity, or an agent of the entity, was at fault for failing to respond timely or adequately to requests of the department for information relating to the individual claim for unemployment compensation benefits. The department shall make this determination when the entity or agent fails to respond timely or adequately in two instances relating to the individual claim for unemployment compensation benefits. This subdivision shall apply to benefit overpayments established on or after October 22, 2013.
In making the payments prescribed by subdivision (b), there shall be paid or credited to the Unemployment Fund, either in advance or by way of reimbursement, as may be determined by the director, any sums he or she estimates the Unemployment Fund will be entitled to receive from each entity for each calendar quarter, reduced or increased by any sum by which he or she finds that his or her estimates for any prior calendar quarter were greater or less than the amounts which should have been paid to the fund. The estimates may be made upon the basis of statistical sampling, or any other method as may be determined by the director.
Upon making that determination, the director shall give notice of the determination, pursuant to Section 1206, to the entity. The director may cancel any contributions or portion thereof that he or she finds has been erroneously determined.
The director shall charge to any special fund, that is responsible for the salary of any employee of an entity, the amount determined by the director for which the fund is liable pursuant to this section. The contributions due from the entity shall be paid from the liable special fund, the General Fund, or other liable fund to the Unemployment Fund by the Controller or other officer or person responsible for disbursements on behalf of the entity within 30 days of the date of mailing of the director’s notice of determination to the entity. The director for good cause may extend for not to exceed 60 days the time for paying without penalty the amount determined and required to be paid. Contributions are due upon the date of mailing of the notice of determination and are delinquent if not paid on or before the 30th day following the date of mailing of the notice.
An entity that fails to pay the contributions required within the time required shall be liable for interest on the contributions at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code from and after the date of delinquency until paid, and an entity that without good cause fails to pay contributions required within the time required shall pay a penalty of 10 percent of the amount of the contributions. If the entity fails to pay the contributions required on or before the delinquency date, the director may assess the entity for the amount required by the notice of determination. This subdivision does not apply to employers electing financing under Section 821, for amounts due after December 31, 1992.
Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to the assessment of contributions, and Chapter 7 (commencing with Section 1701) of Part 1, with respect to the collection of contributions, apply to the assessments provided by this section. Sections 1177 to 1184, inclusive, relating to refunds and overpayments, apply to amounts paid to the Unemployment Fund pursuant to this section. Sections 1222, 1223, 1224, 1241, and 1242 apply to matters arising under this section.
The director may terminate the election of an entity for financing under this section if the entity is delinquent in the payment of advances or reimbursements required by the director under this section. After a termination, the entity may again make an election pursuant to this section, but only if it is not delinquent in the payment of contributions and not delinquent in the payment of advances or reimbursements required by the director under this section.
In the case of an Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code), the director shall terminate all elections for the tribe and all subdivisions, subsidiaries, and business enterprises wholly owned by that tribe if the tribe or any subdivision, subsidiary, or business enterprise wholly owned by that tribe is more than 90 days delinquent in the payment of contributions, bonds, advances, reimbursements, or applicable penalties or interest required under this code, after notice to the tribe. After a termination, the Indian tribe may again make an election pursuant to this section, but only if it is not delinquent in the payment of contributions, bonds, advances, reimbursements, or applicable penalties or interest required under this code.
Notwithstanding any other provision of this section, an entity shall not be liable for that portion of any extended duration benefits or federal-state extended benefits that is reimbursed or reimbursable by the federal government to the State of California.
After the termination of an election under this section, the entity shall remain liable for its proportionate share of the cost of benefits paid and charged to its account in the manner provided by Section 1026, which are based on wages paid for services during the period of the election. That liability may be charged against any remaining balance of a prior reserve account used by the entity pursuant to Section 712 or 713. Any portion of the remaining balance shall be included in the reserve account of the entity following a termination of an election under this section which occurs prior to the expiration of a period of three consecutive years commencing with the effective date of the election. For purposes of Section 982, the period of an election under Section 803 shall, to the extent permitted by federal law, be included as a period during which a reserve account has been subject to benefit charges.
Notwithstanding any other provision of this article, if an entity acquires or succeeds to another entity in any manner, the method of reimbursement financing, in lieu of contributions required of employers, elected by the acquiring entity shall apply to all service performed in the employ of the acquiring entity. The acquiring entity shall be liable for the reimbursement of all benefits chargeable to the entity acquired under any method of reimbursement financing elected by the entity acquired, except that this provision shall not apply to the acquisition of, or succession to, less than a total entity if the remainder of the entity partially acquired or succeeded to remains in existence. “Entity” as used in this section means any entity as defined by subdivision (a) of Section 803.
Notwithstanding any other provision of this article, a nonprofit organization which elected reimbursement financing under Section 803 and which has acquired a previously accumulated favorable reserve account under Section 712 or 713 shall be liable for the reimbursement of benefits pursuant to such election for any benefits chargeable to the reserve account and based upon wages paid prior to such election, to the extent that such benefits exceed the previously accumulated favorable reserve account.
The director shall notify the United States Internal Revenue Service and the United States Department of Labor of the failure of any Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) to make a payment or post a bond as required under subdivision (b) of Section 803 within 90 days of the delinquency date of a notice to the tribe specifying the amount due under that subdivision. If the amount due is subsequently paid by the Indian tribe, the director shall notify the United States Internal Revenue Service and the United States Department of Labor of the satisfaction of the liability.
An unregistered organization described in Section 608, and which has been determined by the Internal Revenue Service to be exempt under Section 501(a) as an organization described in Section 501(c)(3) of the Internal Revenue Code, may elect reimbursement financing under Section 801 when the director finds that it has good cause for failing to register as an employer under this division. The election under Section 801 shall be from the time the organization became an employer. The organization shall, upon election, be liable for reimbursement of the cost of benefits chargeable to the organization from the time it became an employer. Payment of the cost of benefits shall be as provided in Section 803 except that benefits paid more than 30 days prior to the date of election under Section 801 shall accrue interest as provided in Section 1113. The election under Section 801 shall be subject to all provisions of Section 803.
The department shall implement subdivision (a) according to the following schedule:
For the State of California, by July 1, 1986.
For all public entities with more than 100 employees, by October 1, 1986.
For all other local public entities, by January 1, 1987.
ARTICLE 6. Financing Unemployment Insurance Coverage for Public School Employees [821. - 832.]
Each school employer may, in lieu of the contributions required of employers, elect to pay into the Unemployment Fund the cost of benefits, including extended duration benefits and federal-state extended benefits, paid based on base period wages with respect to employment for an employing unit and charged to its account in the manner provided by Section 1026, pursuant to authorized regulations that shall prescribe the rate or amount, time, manner, and method of payment or advance payment or providing a good and sufficient bond to guarantee payment of contributions. The provisions of this article shall apply to school employers who have elected financing under this section.
Sections 1030, 1031, 1032, and 1032.5, and any provision of this division for the noncharging of benefits to the account of an employer, shall not apply to an employing unit under subdivision (a). The cost of benefits charged to a school employer under this section shall include, but not be limited to, benefits or payments improperly paid in excess of a weekly benefit amount, or in excess of a maximum benefit amount, or otherwise in excess of the amount that should have been paid, due to any computational or other error of any type by the Employment Development Department or the Department of Benefit Payments, whether or not the error could be anticipated.
The cost of benefits charged to a school employer under this section shall include credits of benefit overpayments actually collected by the department, unless the department determines that the payment was made because the school employer, or an agent of the school employer, was at fault for failing to respond timely or adequately to requests of the department for information relating to the individual claim for unemployment compensation benefits. The department shall make this determination when the school employer or agent fails to respond timely or adequately in two instances relating to the individual claim for unemployment compensation benefits. This subdivision shall apply to benefit overpayments established on or after October 22, 2013.
In making the payments prescribed by subdivision (a), there shall be paid or credited to the Unemployment Fund, either in advance or by way of reimbursement, as may be determined by the director, any sums he or she estimates the Unemployment Fund will be entitled to receive from each employing unit for each calendar quarter, reduced or increased by any sum by which he or she finds that his or her estimates for any prior calendar quarter were greater or less than the amounts that should have been paid to the fund. These estimates may be made upon the basis of a statistical sampling, or other method as may be determined by the director.
Upon making the determination, the director shall mail notice of the determination, pursuant to Section 1206, to the employing unit.
The director may cancel any contributions or portion thereof that he or she finds have been erroneously determined. The contributions due from the employing units shall be paid, transferred, or credited from the School Employees Fund established in the State Treasury by Section 822 to the Unemployment Fund by the State Treasurer, State Controller, or other officer or person responsible for disbursements on behalf of the employing unit within 30 days of the date of mailing of the director’s notice of determination to the employing unit.
Each employing unit shall send a copy of any and all notices, billings, or correspondence not normally routed to the administrator and the Superintendent of Public Instruction, regarding unemployment insurance for the school employees, to the administrator, the Superintendent of Public Instruction, and the county superintendent of schools, or agent thereof, with timely documentation of charges or determination. Article 8 (commencing with Section 1126) of Chapter 4 with respect to the assessment of contributions, and Chapter 7 (commencing with Section 1701) with respect to the collection of contributions, shall apply to the assessments provided by this article. Sections 1177 to 1184, inclusive, relating to refunds and overpayments, shall apply to amounts paid to the Unemployment Fund pursuant to this section. Sections 1222, 1223, 1224, 1241, and 1242 shall apply to matters arising under this section.
Notwithstanding any other provision of this section, no employing unit shall be liable for that portion of any extended duration benefits or federal-state extended benefits that is reimbursed or reimbursable by the federal government to the state.
To the extent permitted by federal law, including Section 121(e) of Public Law 94-566, any school employer that elects a method of financing under this article shall not be liable to reimburse the cost of benefits paid to any individual whose base period wages include wages for services performed prior to January 1, 1978, if the benefits are reimbursable by the federal government under Section 121 of Public Law 94-566 and to the extent that the individual would not have been eligible for the benefits had this state not provided for benefits payable based on services performed prior to January 1, 1978.
The administrator and the Superintendent of Public Instruction shall adopt rules and regulations for the administration of their respective functions under this article in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Regulations of the administrator shall be subject to Article 1 (commencing with Section 301) of Chapter 2 of Part 1 of Division 1. Rules and regulations of the Superintendent of Public Instruction shall not be subject to the provisions of Article 1 (commencing with Section 301) of Chapter 2 of Part 1 of Division 1.
Any election for financing coverage under this section shall take effect with respect to services performed from and after the first day of the calendar quarter in which the election is filed with the director, and shall continue in effect for not less than two full calendar years. Thereafter, the election under this section may be terminated as of January 1 of any calendar year only if the school employer, on or before the 31st day of January of that year, has filed with the director a written application for termination. The director may for good cause waive the requirement that a written application for termination shall be filed on or before the 31st day of January. School employers shall be prohibited from making a subsequent reelection under this section for 10 years from the date of termination of an election under this section. An election for financing coverage under this section is deemed to have been filed by every school employer effective as of January 1, 1976, is deemed to have been in effect for two calendar years prior to January 1, 1978, and may be terminated as of January 1, 1978, or as of January 1, 1980, or any later January 1 pursuant to this section. Upon the termination of any election under this section, the school employer shall be and remain liable for all benefits paid based upon wages paid by the school employer during the period of an election under this section.
As used in this article, “administrator” means the Director of Employment Development.
As used in this article, “employing unit” and “school employer” means the governing board of any school district or community college district, any county board of education, any county superintendent of schools, or any personnel commission of a school district or community college district which has a merit system pursuant to any provision of the Education Code, or any instrumentality of the foregoing, or any instrumentality of more than one of the foregoing, which employs one or more employees.
The provisions of Article 3 (commencing with Section 1326) of Chapter 5 of this part relating to filing, determination, and payments of unemployment compensation benefit claims, and all other provisions of this part not inconsistent with this article, shall apply to all claims and matters arising under this article.
There is hereby established in the State Treasury the “School Employees Fund.” The School Employees Fund is the successor of the “Classified School Employees Fund.” Moneys received pursuant to Section 823, together with any charges, notices, fees, interest, penalties, assessments, or other revenue, shall be deposited in this fund. All moneys in the fund are hereby appropriated to the administrator without regard to fiscal year for carrying out the purposes of this article, for administrative costs, for making refunds, and for investment through the Surplus Money Investment Fund, with any interest or earnings credited to the School Employees Fund. Funds to be used for administrative costs shall be budgeted and expended in accordance with existing state law.
Notwithstanding any other law, the Controller may use the moneys in the School Employees Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the School Employees Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the School Employees Fund was created.
For the purpose of payment by each school employer of all or part of the charges for unemployment compensation benefits, fees, assessments, interest, penalties, billings, notices, and other expenses of unemployment insurance for school employees pursuant to this part, moneys budgeted pursuant to subdivisions (b) and (c) shall be remitted by the school employer or on the school employer’s behalf by the county auditor to the Treasurer pursuant to this article, and shall be deposited in the School Employees Fund.
For each fiscal year, except as provided in subdivision (c), each school employer shall budget and remit on or before the last day of the calendar month following the close of each calendar quarter to the Treasurer for deposit in the School Employees Fund in the State Treasury an amount determined by multiplying the contribution rate for the fiscal year by the total wages, including taxable wages as well as wages which would be taxable except for the limitation on taxable wages provided under Section 930, but excluding, to the extent permitted by federal law, wages paid to any individual to the extent that federal law provides for reimbursement to the State of California for all benefits paid from the Unemployment Fund to the individual based on the wages.
The administrator shall, not later than March 31 each year, notify all school employers participating in the School Employees Fund of the contribution rate for the succeeding fiscal year.
The contribution rate for the fiscal year beginning July 1, 1988, and for each subsequent fiscal year shall be two times the amount disbursed for claims management fees, unemployment insurance benefit charges, and School Employees Fund administrative expenditures from the School Employees Fund during the 12-month period ending December 31 and immediately preceding the fiscal year for which the rate is to be effective, less the amount in the School Employees Fund on that December 31, with the resulting figure divided by total wages as described in paragraph (1) for the 12-month period ending June 30 and immediately preceding that December 31, and then rounded to the nearest one-hundredth of 1 percent. In no event shall the contribution rate be less than five one-hundredths of 1 percent.
If the administrator finds that the ability of the School Employees Fund to meet its estimated obligations promptly when due will become endangered, the administrator shall increase the contribution rate otherwise provided by this section to a level estimated to be needed to protect the solvency of the fund, except that the rate shall not be increased to more than three-tenths of 1 percent. If the administrator finds that the School Employees Fund balance is in excess of an adequate reserve to meet its estimated obligations promptly when due, the administrator shall, after consultation with the fund’s School Advisory Committee, decrease the contribution rate otherwise provided by this section, except that the rate shall not be decreased to less than one-tenth of 1 percent. The administrator shall notify all school employers participating in the fund of any increased or decreased contribution rate under this authority.
This section shall become operative on January 1, 2024.
The administrator of the School Employees Fund shall, based on the total number of covered employees reflected on reports received by March 31, 1978, and by November 30, 1978, and each year thereafter by November 30, make a transfer from available interest earnings pursuant to investments authorized by Section 822 to the Superintendent of Public Instruction or Chancellor of the California Community Colleges to support an Unemployment Insurance Management System and appeals program as set forth in Section 1330 of the Education Code. Such transfers shall be equal to two dollars ($2) per covered employee, less administrative costs of the Superintendent of Public Instruction and the Chancellor of the California Community Colleges, and shall be made by April 30, 1978, and by December 31, 1978, and each year thereafter by December 31, to the Superintendent of Public Instruction or Chancellor of the California Community Colleges, as appropriate, and expended only for the purposes set forth in Section 1330 of the Education Code.
Whenever the unencumbered balance of interest deposited in or earned by the School Employees Fund, after deducting administrative expenses paid or encumbered, exceeds two million dollars ($2,000,000) as of the close of each fiscal year, the unencumbered balance shall be credited as of the close of that fiscal year to the account of each school employer which has a positive balance in the fund, in the proportion that each positive account balance bears to the total of all positive account balances.
Each school employer shall be responsible for a quarterly local experience charge as set forth below, together with the charges or penalties set by the administrator for administrative indiscretions, including tardiness and error, as well as all costs for benefits and administration resulting from failure to properly cover an employee. The reimbursement for charges shall be delinquent 30 days from the date of notice and if not paid within the time required, the school employer shall pay a penalty of 10 percent of the unpaid amount, plus interest at the adjusted annual rate established pursuant to Section 19521 of the Revenue and Taxation Code from and after the date of delinquency until paid. The local experience charge to be levied against each school employer shall be computed as follows:
Local Experience Charge
The local experience charge rate shall be 10 percent for the first three complete fiscal years of participation in the School Employees Fund.
The local experience charge rate for the fourth fiscal year, and each succeeding fiscal year, shall be determined by dividing the reserve balance at the end of the fiscal year which began 24 months prior to the fiscal year for which the rate is being calculated by the benefits paid for that same prior fiscal year.
The factor derived is the employer’s reserve ratio. If, as of the computation date, the school employer’s reserve ratio equals or exceeds that which appears on any line in column 1 of the following table, but is less than that which appears in column 2 of that table, the local experience charge rate shall be the figure appearing on that same line in column 3 of that table.
The rate determined in subdivision (a) or (b) shall be multiplied by the employer’s quarterly benefit charges to compute the local experience charges.
The administrator shall, not later than March 31 of each year, notify each school employer participating in the School Employees Fund of their local experience charge rate for the succeeding fiscal year.
The total amount of the local experience charge computed for each school employer pursuant to Section 828 shall be the amount that the school employer, county superintendent of schools, or empowered entity shall, on behalf of the employers under that jurisdiction, reimburse the School Employees Fund in the State Treasury. However, this amount shall not exceed 1.7 percent of the actual annual wages paid by a school employer in the immediately preceding calendar year as indicated in the four quarterly reports to the department.
There is hereby created a School Employer Advisory Committee of five persons. The committee shall consist of one person appointed by each of the following: the State Superintendent of Public Instruction, Chancellor of the California Community Colleges, Association of School Administrators, California School Business Officials, and the California School Board Association.
All such members shall serve at the pleasure of the appointing power and their only compensation shall be per diem expenses for attending meetings, which shall be a cost of administration of the School Employees Fund. The advisory committee shall select a chairperson and meet at least semiannually with the administrator to consider and recommend improvements concerning the administration of this article.
The administrator shall at least annually calculate, as of the close of and for the immediately preceding fiscal year, the experiences of school employers relative to usage of the Unemployment Fund. The calculations shall include tabulations on the experience of each school employer in relation to the expenditures from and the income to the School Employees Fund from the wages paid by the employer. All school employers shall be listed and ranked by ratio of use. The report shall contain comments and recommendations on improvements to the administration, enforcement, and financing of the provisions relative to this article. The report by the administrator on the above shall be made each year to the affected school employer and governing board thereof prior to March 31.
The administrator shall develop experience relationships on all benefits paid to employees via the School Employees Fund and on school employers’ experience related to use and exposure. Data shall relate to numbers of employees and types of programs and shall be calculated as of the close of and for the immediately preceding fiscal year. A report by the administrator on the above shall be made each year to the Legislature prior to March 31 containing comments and recommendations on improvement to administration, enforcement and financing of the provisions relative thereto.
CHAPTER 4. Contributions and Reports [901. - 1243.]
ARTICLE 1. Definitions [901. - 906.]
The definitions set forth in this article are applicable to this chapter only.
“Computation date” means the close of business on June 30th, of each calendar year for the purpose of establishing contribution rates for the next succeeding calendar year.
“Rating period” means the full calendar year next succeeding any computation date.
“Net balance of reserve” means the excess, if any, of credits required to be made to any employer’s account over the charges against that account as of any computation date.
“Average base pay roll” means the quotient obtained by dividing by three the total amount of taxable wages paid by an employer during the most recent period of three consecutive calendar years immediately preceding the computation date.
“Contributions paid on his own behalf” means:
All contributions paid under this part to the Unemployment Fund on behalf of an employer with respect to wages paid by him on or before the computation date for any rating period, which have been paid on or before the end of the calendar month next succeeding such computation date.
Any additional amount of contributions paid under this part to the Unemployment Fund on behalf of an employer with respect to wages paid by him on or before the computation date for any rating period, which have been assessed pursuant to Section 1036 and have been paid before the delinquent date for the calendar quarter in which he is given notice of the assessment pursuant to Section 1036.
Any additional contributions paid pursuant to Section 976.5.
ARTICLE 2. “Wages,” the Basis of the Contribution [926. - 940.]
Except as otherwise provided in this article “wages” means all remuneration payable to an employee for personal services, whether by private agreement or consent or by force of statute, including commissions and bonuses, and the reasonable cash value of all remuneration payable to an employee in any medium other than cash.
“Wages” also means all remuneration payable for personal services, as specified in Section 926, when the legal obligation for the payment of such wages is assumed by an employer specified in Section 678, and the first or prior employer for whom the personal services were originally performed is relieved of the legal obligation for the payment of such remuneration.
“Wages” also means all tips which are received while performing services which constitute employment and included in a written statement furnished to the employer pursuant to Section 6053(a) of the Internal Revenue Code.
The changes in law made in this section by Chapter 1461 of the Statutes of 1985 shall apply with respect to wages earned on and after January 1, 1986, in conformity with the provisions of federal law.
Unless otherwise specifically provided, the definitions and qualifications of deferred compensation plans shall be determined for purposes of this part in accordance with Subchapter D (commencing with Section 401) of Chapter 1 of Subtitle A of the Internal Revenue Code. When applying the Internal Revenue Code for the purposes of this part, any reference to regulations of the Internal Revenue Service shall not apply if the Employment Development Department has adopted and issued regulations on this subject. In the absence of regulations issued by the Employment Development Department, regulations issued under the Internal Revenue Code shall govern the interpretation of this part.
“Wages” also includes all of the following:
Any employer contributions under a qualified cash or deferred arrangement, as defined by Section 401(k) of the Internal Revenue Code, to the extent the amount is excluded from the gross income of the employee under Section 402(e)(3) of the Internal Revenue Code.
Any amount treated as an employer contribution under a state pickup plan as defined by Section 414(h)(2) of the Internal Revenue Code, only if the payments are made pursuant to a salary reduction arrangement.
Any amount deferred under a nonqualified deferred compensation plan shall be taken into account, for purposes of this article, on the later of the following:
When the services are performed.
When there is no substantial risk of forfeiture of the right to the amount.
Any amount taken into account as “wages” by reason of subdivision (c), and the income attributable thereto, shall be taxed only once and shall not thereafter be treated as “wages” for purposes of this article.
For the purposes of this section, the term “nonqualified deferred compensation plan” means any plan or arrangement for deferral of compensation other than a plan described under Section 934.
“Wages” includes compensation, that is deductible under Section 162 of the Internal Revenue Code, paid to a member of a limited liability company filing a federal corporate income tax return.
“Wages” does not include the actual amount of any required or necessary business expense incurred by an individual in connection with his employment, or, in lieu of the actual amount of such expenses, the reasonably estimated amount allowed therefor pursuant to authorized regulations.
“Wages” does not include remuneration in excess of seven thousand dollars ($7,000) paid to an individual by an employer during any calendar year, with respect to employment.
For the purpose of determining whether an employer has paid remuneration with respect to employment in excess of the limitation prescribed by Section 930 to an individual during any calendar year, the remuneration shall be deemed to include any remuneration paid to the individual by the employer for services constituting employment under the unemployment compensation law of another state which the employer has reported to the other state as wages for contribution purposes. As used in this section, “remuneration” does not include the remuneration of the type described in Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, and 938.3 when paid by the employer in another state.
If an employer during any calendar year acquires substantially all the property used in a trade or business of another employer, or used in a separate unit of a trade or business of the other employer, and immediately after the acquisition employs in his or her trade or business an individual who immediately prior to the acquisition was employed in the trade or business of the employer from whom the property was acquired, then, for the purpose of determining whether the acquiring employer has paid remuneration with respect to employment in excess of the limitation prescribed by Section 930, or the limitation prescribed by Section 985, to the individual during the calendar year, any remuneration with respect to employment paid to the individual by the employer from whom the property was acquired during the calendar year and prior to the acquisition shall be considered as having been paid by the acquiring employer. As used in this section, “remuneration” does not include the remuneration referred to in Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, and 938.3.
“Wages” does not include the amount of any payment, including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any payment, made to or on behalf of an employee or any of his or her dependents under a plan or system established by an employer which makes provision for his or her employees generally, or for his or her employees generally and their dependents, or for a class or classes of his or her employees, or for a class or classes of his or her employees and their dependents, on account of any of the following:
Sickness or accident disability, but in the case of payments made to an employee or any of his or her dependents, this subdivision shall exclude from “wages” only those payments which are received under a workers’ compensation law.
Medical or hospitalization expenses in connection with sickness or accident disability.
Death.
Except for Part 2 (commencing with Section 2601) of this division and Division 6 (commencing with Section 13000), any third party which makes a payment included in the term “wages” solely by reason of subdivision (a) of Section 931 shall be the employer with respect to those wages unless the third-party payer notifies the last employer, who is a member of the plan and for whom the services were performed, within 15 days of payment, and provides all of the following information to that last employer:
The name and social security account number of the recipients of the wages paid pursuant to subdivision (a) of Section 931.
The amount of gross wages paid pursuant to subdivision (a) of Section 931.
The special rule prescribed by this subdivision applies to the payment of sick pay made by a third-party payer, such as an insurer, under a contract of insurance pursuant to a multiple employer plan that is obligated to make payments for sick pay to employees of participating employers. If the third-party payer provides the plan with the notification required by subdivision (a) within the time required, the plan, not the third-party payer, shall be treated as the employer under subdivision (a). If within six business days after receipt of the notification the plan similarly notifies the last employer for whom the services are performed, and who is a plan member, that employer, not the plan, shall be required to report and pay the contributions due with respect to the wages.
When an employer receives the notification prescribed in subdivision (a) or (b), the wages described therein shall be deemed paid when the notice is received.
The director shall not make an assessment pursuant to Section 1126, 1127, or 1137 to assess employee contributions required by Sections 984 and 13020 on third-party sick pay as described in subdivision (a) for the period from January 1, 1987, through the date on which this subdivision became effective.
Except as provided by Section 1176 and Section 19301 of the Revenue and Taxation Code, no refunds may be made for employee contributions required by Sections 984 and 13020 paid on third-party sick pay as described in subdivision (a) for the period from January 1, 1987, through the date on which this subdivision became effective.
“Wages” does not include any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability made by an employer to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employer.
“Wages” does not include any payment made to, or on behalf of, an employee or his or her beneficiary:
From or to a trust described in Section 401(a) of the Internal Revenue Code which is exempt from tax under Section 501(a) of that code at the time of the payment, unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.
Under or to an annuity plan which, at the time of the payment, is a plan described in Section 403(a) of the Internal Revenue Code.
Under a simplified employee pension, as defined in Section 408(k)(1) of the Internal Revenue Code, other than any contributions described in Section 408(k)(6) of the Internal Revenue Code.
Under a simple retirement account, as described in Section 408(p) of the Internal Revenue Code, other than any elective contributions under Section 408(p)(2)(A)(i) of the Internal Revenue Code.
Under or to an annuity contract described in Section 403(b) of the Internal Revenue Code, other than a payment for the purchase of the contract which is made by reason of a salary reduction agreement, whether evidenced by a written instrument or otherwise.
Under or to an exempt governmental deferred compensation plan, as defined in Section 3121(v)(3) of the Internal Revenue Code.
To supplement pension benefits under a plan or trust described in any of the foregoing provisions of this section to take into account some portion or all of the increase in the cost of living, as determined by the Secretary of Labor, since retirement, but only if the supplemental payments are under a plan which is treated as a welfare plan under Section 3(2)(B)(ii) of the Employee Retirement Income Security Act of 1974.
“Wages” does not include the payment by an employer, without deduction from the remuneration of the employee, of the tax imposed upon an employee under Section 3101 of the Internal Revenue Code with respect to remuneration paid to an employee for domestic service in a private home of the employer or for agricultural labor, as defined in subsection (g) of Section 3121 of the Internal Revenue Code.
“Wages” does not include remuneration paid in any medium other than cash to an employee for service not in the course of the employer’s trade or business, except that this section shall not apply to remuneration paid for domestic service in a private home or in a local college club or local chapter of a college fraternity or sorority.
“Wages” does not include the payment to, or on behalf of, an employee for moving expenses, if at the time of the payment it is reasonable to believe that a corresponding deduction from income is allowable to the employee under Section 217 of the Internal Revenue Code.
“Wages” does not include any payment or series of payments by an employer to an employee or any of his or her dependents which is paid:
Upon or after the termination of an employee’s employment relationship because of death or retirement for disability, and
Under a plan established by the employer which makes provision for his or her employees generally or a class or classes of his or her employees, or for the employees or class or classes of employees and their dependents.
This section shall not apply to any payment or series of payments which would have been paid if the employee’s employment relationship had not been terminated as prescribed by this section.
“Wages” does not include any payment made, or benefit furnished to, or for the benefit of, an employee, for any of the following:
An educational assistance program if, at the time of payment or the furnishing, it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under Section 127 of the Internal Revenue Code.
A dependent care assistance program if, at the time of payment or the furnishing, it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under Section 129 of the Internal Revenue Code.
Any benefit provided to or on behalf of an employee if at the time the benefit is provided it is reasonable to believe that the employee will be able to exclude the benefit from income under Section 74(c), 117, or 132 of the Internal Revenue Code.
Any benefit under a cafeteria plan, as described in Section 125 of the Internal Revenue Code, if the benefit is excludable from wages pursuant to any other provision of this article, except Section 930.
“Wages” does not include any payment made, or benefit furnished to, or for the benefit of, an employee under Section 105(b) of the Internal Revenue Code, relating to amounts expended for medical care, as amended by Section 1004(d)(1) of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152).
“Wages” does not include any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.
“Wages,” does not include any payment made by an employer to a survivor, or the estate of a former employee, after the calendar year in which the employee died.
Types of payments excluded from the definition of wages by Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, 938.3, and 938.7 shall be excluded from the definition of wages only during the time that the respective type or types of payments set forth in those sections are similarly excluded from the definition of wages contained in the Federal Unemployment Tax Act.
For the purposes of this section, of Sections 977 and 977.5 to the extent specified by those sections, and of Sections 1026, 1088, 1280, 1281, 1282, 2652, 2654, 2655, and 2657, “wages” means taxable wages as well as wages which would be taxable except for the limitations on taxable wages provided under Sections 930 and 985.
ARTICLE 3. Contribution Rates [976. - 995.]
Employer contributions to the Unemployment Fund shall accrue and become payable by every employer, except an employer as defined by Section 676, for each calendar year with respect to wages paid for employment. The contributions are due and shall be paid to the department for the Unemployment Fund by each employer in accordance with this division and shall not be deducted in whole or in part from the wages of individuals in his employ.
Except as provided in subdivision (b), in addition to other contributions required by this division, every employer, except an employer to which subdivision (c) is applicable, may submit a voluntary unemployment insurance contribution for the purpose of redetermining its unemployment insurance contribution rate. No redetermination of a contribution rate shall be made unless the voluntary contribution is submitted as required in subdivision (c) of Section 1110. No redetermination shall reduce an employer’s unemployment insurance contribution rate by more than three rates as provided in Section 977.
This section does not apply to any of the following:
An employer not eligible for a contribution rate other than that provided pursuant to Section 982 or subdivision (c) of Section 977.
An employer with a negative reserve account balance on the computation date.
An employer who was notified prior to September 1 of any unpaid amount owed to the department which is not the subject of a timely petition for reassessment pending before the appeals board on September 30 preceding the year to which a contribution rate is applicable.
In addition to other contributions required by this division, every employer, except an employer defined by Section 676, 684, or 685, and except an employer that has elected an alternate method of financing its liability for unemployment compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3, shall pay into the Employment Training Fund contributions at the rate of 0.1 percent of wages specified in Section 930. The contributions shall be collected in the same manner and at the same time as any contributions required under Sections 977 and 977.5.
Section 976.6 does not apply to any employer who has a negative reserve account balance on the computation date.
Subdivision (a) does not apply to an employer assigned the maximum rate pursuant to subdivision (c) of Section 977.
Except as provided in subdivision (c), if, as of the computation date, the employer’s net balance of reserve equals or exceeds that percentage of his or her average base payroll which appears on any line in column 1 of the following table, but is less than that percentage of his or her average base payroll which appears on the same line in column 2 of that table, his or her 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.
Whenever the balance in the Unemployment Fund on September 30 of any calendar year is greater than 1.8 percent of the wages (as defined by Section 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.
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 defined by Section 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.
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 defined by Section 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.
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 defined by Section 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.
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 defined by Section 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.
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 defined by Section 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.
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 defined by Section 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.
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.
Whenever the balance in the Unemployment Fund on September 30 of any calendar year 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, 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.
On or before January 10 of each calendar year, the director shall prepare a statement based on records of the department declaring which of the employer tax schedules contained in Section 977 shall be in effect for that calendar year and whether the emergency solvency surcharge pursuant to Section 977.5 shall be added. The statement shall be a public record and shall be final and binding for that calendar year. The statement shall include the official tabulation of wages in subject employment made by the department for the purpose of Sections 977 and 977.5, a summary of the data upon which that tabulation was based, and the sources from which those data were obtained, and shall further include a summary of the data upon which the computation of the balance in the Unemployment Fund was based, and their source. The director’s action under Sections 977, 977.5, and this section shall not constitute an authorized regulation.
Any amount credited to this state’s account in the Unemployment Trust Fund pursuant to Section 903 of the federal Social Security Act, as amended, which has been appropriated for expenses of administration other than for capital assets, whether or not that amount has been withdrawn from that fund.
Any unexpended advance from the federal unemployment account in the Unemployment Trust Fund received in accordance with Section 323 of this division and Title XII of the federal Social Security Act, as amended.
Any amount paid in advance into the Unemployment Fund by an employer under any type of coverage pursuant to which reimbursement of benefits is permitted or required in lieu of the contributions required of employers.
Any amount paid in advance into the Unemployment Fund by the federal government under any federal law that requires or permits this state to pay benefits from the Unemployment Fund and provides for advances by the federal government for reimbursement of all or part of those benefits.
In determining the balance in the Unemployment Fund for the purpose of Sections 977 and 977.5, there shall also be excluded any estimated or other contributions not legally due and payable with respect to the final calendar quarter of the calendar year, except any payment of contributions made under Sections 976.5 and 1137 and except any payment of contributions by employers terminating business during any calendar quarter.
The unreimbursed balance of all benefits paid from the Unemployment Fund to claimants when those benefits are based upon wages in employment under any type of coverage pursuant to which reimbursement of benefits is permitted or required in lieu of the contributions required of employers, whether or not the director has certified the benefits to the employer as due or payable.
The unreimbursed balance of all benefits paid from the Unemployment Fund to claimants when, and to the extent that, the benefits are subject to reimbursement by the federal government under any federal law that requires or permits this state to pay benefits from the Unemployment Fund and provides for reimbursement by the federal government of all or part of those benefits.
Except as provided in subdivision (b), no employer shall be eligible for a contribution rate of more or less than 3.4 percent for any rating period unless his or her reserve account has been subject to benefit charges during the period of 12 complete consecutive calendar quarters ending on the computation date for that rating period and he or she is qualified under Sections 977 and 977.5.
No new employer shall be eligible for a contribution rate of more or less than 3.4 percent unless his or her reserve account has been subject to benefit charges during the period of 12 complete consecutive calendar months ending on the computation date and the new employer is qualified under Sections 977 and 977.5.
For the purposes of this section “new employer” means any of the following:
An employer who first qualifies as an employer after the 1969 calendar year, and whose account is continuously subject to benefit charges from the date of first chargeability, except that a successor employer under Section 1051 is not a new employer if the successor applies for or obtains the transfer of the reserve account or part thereof of a predecessor who is not a new employer.
An employer whose entire reserve account has been transferred to a successor under Article 5 (commencing with Section 1051) of Chapter 4 of this part.
An employer whose reserve account has been canceled pursuant to Section 1029.
Section 905 applies to a new employer, except that for the purposes of this section “average base payroll” means:
The contribution rate of an employer, for any period prior to January 1, 1988, shall not be changed, other than by the provisions of Sections 977 and 977.5, when the director makes a determination, pursuant to Section 135.1 or 135.2, because of arrangements entered into or business activities conducted between January 1, 1984, and January 1, 1986.
This section does not apply to an employer assigned the maximum rate pursuant to subdivision (c) of Section 977.
Each worker shall pay worker contributions at the rate determined by the director pursuant to this section with respect to wages, as defined by Sections 926, 927, and 985. On or before October 31 of each calendar year, the director shall prepare a statement, which shall be a public record, declaring the rate of worker contributions for the calendar year and shall notify promptly all employers of employees covered for disability insurance of the rate.
Except as provided in paragraph (3), the rate of worker contributions for calendar year 1987 and for each subsequent calendar year shall be 1.30 times the amount disbursed from the Disability Fund during the 12-month period ending September 30 and immediately preceding the calendar year for which the rate is to be effective, less the amount in the Disability Fund on that September 30, with the resulting figure divided by total wages paid pursuant to Sections 926, 927, and 985 during the same 12-month period, and then rounded to the nearest one-tenth of 1 percent.
The director shall increase the rate of worker contributions by .08 percent for the 2004 and 2005 calendar years to cover the initial cost of family temporary disability insurance benefits provided in Chapter 7 (commencing with Section 3300) of Part 2.
The rate of worker contributions shall not exceed 1.5 percent or be less than 0.1 percent. The rate of worker contributions shall not decrease from the rate in the previous year by more than two-tenths of 1 percent.
Worker contributions required under Sections 708 and 708.5 shall be at a rate determined by the director to reimburse the Disability Fund for unemployment compensation disability benefits paid and estimated to be paid to all employers and self-employed individuals covered by those sections. On or before November 30th of each calendar year, the director shall prepare a statement, which shall be a public record, declaring the rate of contributions for the succeeding calendar year for all employers and self-employed individuals covered under Sections 708 and 708.5 and shall notify promptly the employers and self-employed individuals of the rate. The rate shall be determined by dividing the estimated benefits and administrative costs paid in the prior year by the product of the annual remuneration deemed to have been received under Sections 708 and 708.5 and the estimated number of persons who were covered at any time in the prior year. The resulting rate shall be rounded to the next higher one-hundredth percentage point. The rate may also be reduced or increased by a factor estimated to maintain as nearly as practicable a cumulative zero balance in the funds contributed pursuant to Sections 708 and 708.5. Estimates made pursuant to this subdivision may be made on the basis of statistical sampling, or another method determined by the director.
The director’s action in determining a rate under this section shall not constitute an authorized regulation.
Notwithstanding subdivision (a), and except as provided in paragraph (2), the director may, at the director’s discretion, increase or decrease, by not to exceed 0.1 percent, the rate of worker contributions determined pursuant to subdivision (a), up to a maximum worker contribution rate of 1.5 percent, if the director determines the adjustment is necessary to reimburse the Disability Fund for disability benefits paid or estimated to be paid to individuals covered by this section or to prevent the accumulation of funds in excess of those needed to maintain an adequate fund balance.
Notwithstanding paragraph (1), for the 2004, 2005, and 2006 calendar years, the director may not decrease the rate of worker contributions, regardless of whether the director determines that a decrease is necessary to prevent the accumulation of funds in excess of those needed to maintain the adequacy of the Disability Fund during program implementation.
The amendment to this section by the act adding this subdivision shall become operative on July 1, 2019.
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.
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.
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.
The director’s action in determining a rate under this section shall not constitute an authorized regulation.
Section 984 shall not apply to that part of the remuneration which, after remuneration with respect to employment equal to four times the maximum weekly benefit for each calendar year specified in Section 2655 multiplied by 13 and divided by 55 percent has been paid to an individual by an employer, is paid to the individual by the employer.
This section shall not apply with respect to wages paid on or after January 1, 2024.
Notwithstanding any provision of law in this state to the contrary, each employer shall:
Except as provided in subdivision (a)(2) of this section, withhold in trust the amount of his workers’ contributions from their wages at the time the wages are paid, shall show the deduction on his payroll records, and shall furnish each worker with a statement in writing showing the amount which has been deducted, in such form and at such times as may be prescribed.
Hold in trust the amount of his workers’ contributions, at the time their wages are paid, where he undertakes or agrees to pay without deduction from the wages of his workers the amount of worker contributions required of his workers under this division.
Each employer shall transmit all such contributions withheld or held in trust to the department for the Disability Fund, in addition to his own contributions for the Unemployment Fund, pursuant to authorized regulations.
Each employer shall be liable for any and all contributions required to be made by his workers on account of wages which he has paid to them regardless of whether or not he has deducted the contributions from the workers’ wages at the time they were paid, but no employer shall be liable for worker contributions required on behalf of himself or of any of his employees with respect to wages paid while there is in effect at the time the wages were paid a rule or regulation or interpretation of the director or of the department that such wages were not subject to such contributions.
If the worker contributions required in any one month to be made because of the receipt of cash tips and cash gratuities exceed the wages of the worker under the control of the employer, the worker may furnish the employer, on or before the 10th day of the following month, or, if the amounts are estimated, on or before the last day of the month following the calendar quarter, an amount equal to the excess.
If the worker contributions required by Section 984 with respect to cash tips and cash gratuities exceed the amount of worker contributions that can be collected by the employer from the wages of the worker, the excess shall be paid by the worker, except as provided by Section 1088.6. The worker shall pay the excess to the department within 30 days from his or her receipt of the written statement furnished by his or her employer pursuant to Section 1088.6. If the worker fails to pay the excess within the time required by this subdivision, the director may make an assessment for the excess and shall give the worker a written notice of the assessment. Article 8 (commencing with Section 1126) with respect to the assessment of contributions and Chapter 7 (commencing with Section 1701) with respect to the collection of contributions shall apply to the recovery of amounts under this subdivision.
The current disability benefit period.
One year from the beginning date of any disability benefit period that begins during the three-year period next succeeding the service of notice of the assessment.
In case of the insolvency or bankruptcy of an employer, contributions by workers, payable as provided in this article, shall not be considered any part of the employer’s assets and shall be paid to the director prior to the payment of any other claim against the employer.
The annual tax rate or contribution rate which under this division is determined to apply to any particular employee or any particular employer, or group of employees or group of employers, shall be made public and available for public inspection but in no case shall the amount of tax paid by any employee or employer, or group of employees or group of employers, be disclosed to the public.
In the payment of any contributions, a fractional part of a cent shall be disregarded unless it amounts to one-half cent ($0.005) or more, in which case it shall be increased to one cent ($0.01).
Any contributions paid to the Unemployment Fund or Disability Fund either with respect to wages on which contributions previously have been paid in error and without negligence on the part of the employing unit to another state having an unemployment compensation law, or with respect to wages on which contributions computed under the Federal Unemployment Tax Act previously have been paid in error and without negligence on the part of the employing unit to an agency of the federal government, shall be deemed for the purposes of this division to have been paid to the department at the time of the erroneous payment to the other state or to the federal agency, if payment is made to the department by the employing unit within 30 days after the employing unit is given notice pursuant to Section 1206 by the director of the determination that payment shall be made to the department. The 30-day period for payment may be extended by the director for good cause for a period not to exceed an additional 90 days.
Any contributions paid to the Unemployment Fund or Disability Fund with respect to wages on which contributions computed under this division previously have been paid in error and without negligence on the part of the employing unit to an admitted disability insurer, to trustees administering a voluntary plan for the employing unit, to a self-insured plan of the employing unit, to another agency of this state, or to an agency of the federal government shall be deemed, solely to the extent of the amount of contributions previously paid in error and without negligence, for the purposes of this division to have been paid to the department at the time of the erroneous payment to the admitted disability insurer, to trustees administering a voluntary plan for the employing unit, to a self-insured plan of the employing unit, to another agency of this state, or to the federal agency, if payment is made to the department by the employing unit within 30 days after the employing unit is given notice pursuant to Section 1206 by the director of the determination that payment shall be made to the department. The 30-day period for payment may be extended by the director for good cause for a period not to exceed an additional 90 days. As used in this subdivision “paid” includes credits made to a self-insured plan of the employing unit. With respect to payments by an employing unit to an admitted disability insurer, to trustees administering a voluntary plan for the employing unit, or to a self-insured plan of the employing unit, this subdivision shall apply only if one or more of the following conditions are met:
At the time of payment the employing unit has or prior to the time of payment had an approved voluntary plan with the recipient of the payment.
Prior to the time of payment the employing unit had applied to the department for a voluntary plan which was subsequently approved by the department.
At the time of payment the employing unit is a subsidiary or affiliate of an employing unit having an approved voluntary plan.
At the time of payment the employing unit believed that a voluntary plan had been acquired pursuant to Section 3254.5.
If payment is not made within the 30-day period or within the period for which an extension is granted, this section shall not apply and Article 7 (commencing with Section 1110), Article 8 (commencing with Section 1126), and Chapter 7 (commencing with Section 1701), with respect to the payment of reported contributions, and the assessment and collection of contributions shall apply.
During such time as the Federal Unemployment Tax Act is amended so that employers are allowed, against the tax imposed by Section 3301 of that act, credits amounting to 100 percent of such tax on account of contributions paid under this division, then the additional amount of contributions provided for by Section 993 shall be required to be paid into the Unemployment Fund.
Every employer who is subject to the tax provided for by Section 3301 of the Federal Unemployment Tax Act, shall, subject to Section 992, pay into the Unemployment Fund in addition to the amounts required by other provisions of this division an amount equal to five-tenths of 1 percent, or such other percentage as applies for a calendar year pursuant to Section 6157 of the Internal Revenue Code of 1954, of all wages paid by him or her in employment and included in the measure of the contributions allowed as the credit against the tax imposed by Section 3301 of the Federal Unemployment Tax Act.
The department shall submit to the Legislature in January and May of each year a report on the status of the Unemployment Fund and the Unemployment Compensation Disability Fund. Each report shall include both actual and forecasted information on the fund balances, receipts, disbursements, claim data, tax rates, and employment levels.
ARTICLE 4. Reserve Accounts [1025. - 1037.]
The director shall keep separate records of the amounts paid into the fund by each employer in his or her own behalf, or chargeable to him or her as benefits; but nothing in this division shall be construed to grant any employer or his or her employees prior claims or rights to the amount contributed by him or her to the fund, either on his or her own account or on behalf of his or her employees. The amount of employer contributions, advances, or reimbursements under Article 5 (commencing with Section 801) of Chapter 3 of this part or Section 821, and all other amounts payable to the fund, shall be pooled and available to pay unemployment compensation benefits to any employee entitled thereto, regardless of the source of contributions or any other amounts.
The director shall maintain a separate reserve account for each employer, and shall credit each reserve account with all the contributions paid on his or her behalf.
Unemployment compensation benefits paid to an unemployed individual during any benefit year shall be charged against the reserve account of his or her employer during his or her base period. If the individual performed services in employment for more than one employer during his or her base period, unemployment compensation benefits paid to him or her shall be charged against the respective reserve accounts of the employers in the proportion that the total wages paid to the individual in employment for each employer bears to the total wages paid to the individual in employment for all employers during the base period.
The director shall credit the interest earned by the Unemployment Fund to each positive reserve employer account in proportion to the amount the account bears to the total of all positive reserve accounts.
Benefit overpayments collected in the four quarters prior to the computation date.
Positive balances in reserve accounts canceled pursuant to Section 1029.
Other nontax income.
The increase in the total of all negative reserve account balances as computed by subtracting the total of all negative reserve account balances on July 31 of each year prior to the cancellations required by Section 1027.5 from the total of all negative reserve account balances on the prior July 31 after the cancellations required by Section 1027.5, except as provided by Section 1144.
Benefit overpayments established in the four quarters prior to the computation date.
Other items of expense and benefit charges not included in active employer reserve accounts.
Notwithstanding any other provision of this code, an employer’s reserve account shall not be relieved of charges relating to a benefit overpayment if the department determines that the payment was made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to requests of the department for information relating to the individual claim for unemployment compensation benefits. The department shall make this determination when the employer or agent fails to respond timely or adequately in two instances relating to the individual claim for unemployment compensation benefits. This section shall apply to benefit overpayments established on or after October 22, 2013.
Notwithstanding subdivision (b) of Section 1026 or any other law, for the duration of all federal unemployment benefit programs specifically created to respond to the COVID-19 pandemic, unemployment compensation benefits paid to an unemployed individual shall not be charged against the reserve account of a tax-rated employer, unless the employer or an agent of the employer was at fault as set forth in Section 1026.1.
This section shall become inoperative on January 1, 2021, unless the director determines that noncharging provisions are otherwise extended by federal law.
On the computation date in 1966, the portion of each negative reserve balance which has not previously been charged to the balancing account shall be transferred to that account and the employer’s reserve account thereupon canceled. The computation on such date for calendar year 1967 shall be based upon the status of the employer’s account prior to such transfer and cancellation subject to the requirements of Section 982. The computation for each calendar year beginning with calendar year 1968 shall be in accordance with the requirements of Section 982 and an employer whose reserve account has been canceled under this section shall be considered as first becoming a subject employer on July 1, 1966.
On the computation date each year, the amount each employer’s net balance of reserve is more negative than 21 percent of the employer’s average base payroll shall be canceled from his or her reserve balance.
The amendment made to this section by Chapter 1296 of the Statutes of 1984 shall be deemed to have become operative on June 30, 1984, and the amendment shall be given retroactive effect to that date.
On the computation date of June 30, 1983, the amount each employer’s net balance of reserve was more negative than 12 percent of the employer’s average base payroll shall be canceled from his or her reserve balance.
The charge of unemployment compensation benefits to an employer’s account required by Section 1026 shall be made in such manner as to include as of each computation date all unemployment compensation benefit payments made on or before the computation date. In computing the charge to employers’ accounts, a fractional part of a dollar shall be disregarded unless it amounts to one-half dollar ($0.50) or more, in which case it shall be increased to one dollar ($1).
Whenever an employer ceases to pay wages in employment, the reserve account of the employer, unless it has been transferred under Article 5 (commencing with Section 1051), shall be canceled on the records of the department after a period of three consecutive years has elapsed following the latest calendar quarter in which the employer paid wages in employment.
Whenever a period of three consecutive years has elapsed, commencing with the effective date of an election by any entity to finance benefits pursuant to Section 803, any portion of the reserve account of the entity that has not been subject to use pursuant to Section 712 or 713, unless that portion has been reacquired by the entity by termination of the election under Section 803 prior to the expiration of the three-year period, shall be canceled on the records of the department. Section 982 shall apply to that entity.
Upon the termination of an election by a school employer to finance benefits pursuant to Article 6 (commencing with Section 821) of Chapter 3, any favorable balance in the account of the school employer under the election shall be canceled on the records of the department.
An employer that is entitled under Section 1327 to receive notice of the filing of a new or additional claim may, within 10 days after mailing of the notice, submit to the department any facts within its possession disclosing whether the claimant left the employer’s employ voluntarily and without good cause or left under one of the following circumstances:
The claimant was discharged from the employment for misconduct connected with their work.
The claimant’s discharge or quitting from their most recent employer was the result of an irresistible compulsion to use or consume intoxicants, including alcoholic beverages.
The claimant was a student employed on a temporary basis and whose employment began within, and ended with their leaving to return to school at the close of, their vacation period.
The claimant left the employer’s employ to accompany their spouse or domestic partner to a place or to join their spouse at a place from which it is impractical to commute to the employment, and to which a transfer of the claimant by the employer is not available.
The claimant left the employer’s employ to protect their family or themselves from domestic violence abuse.
The claimant left the employer’s employ to take a substantially better job.
The period during which the employer may submit these facts may be extended by the director for good cause.
A base period employer that is not entitled under Section 1327 to receive notice of the filing of a new or additional claim and is entitled under Section 1329 to receive notice of computation may, within 15 days after mailing of the notice of computation, submit to the department any facts within its possession disclosing whether the claimant left the employer’s employ voluntarily and without good cause or left under one of the following circumstances:
The claimant was discharged from the employment for misconduct connected with their work.
The claimant was a student employed on a temporary basis and whose employment began within, and ended with their leaving to return to school at the close of, their vacation period.
The claimant left the employer’s employ to accompany their spouse or domestic partner to a place or join their spouse at a place from which it is impractical to commute to the employment, and to which a transfer of the claimant by the employer is not available.
The claimant left the employer’s employ to protect their family or themselves from domestic violence abuse.
The claimant left the employer’s employ to take a substantially better job.
The period during which the employer may submit these facts may be extended by the director for good cause.
The department shall consider these facts together with any information in its possession. If the employer is entitled to a ruling under subdivision (b) or to a determination under Section 1328, the department shall promptly notify the employer of its ruling as to the cause of the termination of the claimant’s employment. The employer may appeal from a ruling or reconsidered ruling to an administrative law judge within 30 days after service of notice of the ruling or reconsidered ruling. The 30-day period may be extended for good cause, which includes, but is not limited to, mistake, inadvertence, surprise, or excusable neglect. The director is an interested party to an appeal. The department may for good cause reconsider a ruling or reconsidered ruling within either five days after the date an appeal to an administrative law judge is filed or, if an appeal is not filed, within 30 days after service of notice of the ruling or reconsidered ruling. However, a ruling or reconsidered ruling that relates to a determination that is reconsidered pursuant to subdivision (a) of Section 1332 may also be reconsidered by the department within the time provided for reconsideration of that determination.
For purposes of this section only, if the claimant voluntarily leaves the employer’s employ without notification to the employer of the reasons for the leaving, and if the employer submits all of the facts within its possession concerning the leaving within the applicable time period referred to in this section, the leaving is presumed to be without good cause.
An individual whose employment is terminated under the compulsory retirement provisions of a collective bargaining agreement to which the employer is a party shall not be deemed to have voluntarily left their employment without good cause.
For purposes of this section, “spouse” includes a person to whom marriage is imminent, and “domestic partner” includes a person to whom a domestic partnership, as described in Section 297 of the Family Code, is imminent.
This section shall become operative on July 1, 2015.
If the employment of an individual is terminated due to his absence from work for a period in excess of 24 hours because of his incarceration and he is convicted of the offense for which he was incarcerated or of any lesser included offense, he shall be deemed to have left his work voluntarily without good cause for the purposes of Sections 1030, 3701, and 4701. A plea or verdict of guilty irrespective of whether an order granting probation or other order is made suspending the imposition of the sentence or whether sentence is imposed but execution thereof is suspended, or a conviction following a plea of nolo contendere, is deemed to be a conviction within the meaning of this section.
Notwithstanding any other provision of this division, any ruling made prior to a conviction or other final disposition of the criminal complaint or accusation by the court as to whether an individual who is terminated due to his absence from work because of incarceration voluntarily leaves without good cause may, if no appeal has been taken from the ruling, for good cause be reconsidered by the department during the benefit year or extended duration period or extended benefit period to which the ruling relates. Notice of any reconsidered ruling shall be given to the employer which received notice under Section 1030 or 3701 or 4701, and the employer may appeal therefrom in the manner prescribed in Section 1328 or 3655 or 4655.
If it is ruled under Section 1030 or 1328 that the claimant left the employer’s employ voluntarily and without good cause, or left under one of the following circumstances, benefits paid to the claimant subsequent to the termination of employment that are based upon wages earned from the employer prior to the date of the termination of employment shall not be charged to the account of the employer, except as provided by Section 1026 or if the department determines pursuant to Section 1026.1 that the employer’s reserve account should not be credited, unless the employer failed to furnish the information specified in Section 1030 within the time limit prescribed in that section or unless that ruling is reversed by a reconsidered ruling:
The claimant was discharged by reason of misconduct connected with his or her work.
The claimant was a student employed on a temporary basis and whose employment began within, and ended with his or her leaving to return to school at the close of, his or her vacation period.
The claimant left the employer’s employ to accompany his or her spouse or domestic partner to a place or to join him or her at a place from which it is impractical to commute to the employment, and to which a transfer of the claimant by the employer is not available.
The claimant left the employer’s employ to protect his or her family or himself or herself from domestic violence abuse.
The claimant left the employer’s employ to take a substantially better job.
The claimant’s discharge or quitting from his or her most recent employer was the result of an irresistible compulsion to use or consume intoxicants including alcoholic beverages.
For purposes of this section “spouse” includes a person to whom marriage is imminent, and “domestic partner” includes a person to whom a domestic partnership, as described in Section 297 of the Family Code, is imminent.
Any base period employer may, within 15 days after mailing of a notice of computation under subdivision (a) of Section 1329, submit to the department facts within its possession disclosing that the individual claiming benefits is rendering services for that employer in less than full-time work, and that the individual has continuously, commencing in or prior to the beginning of the base period, rendered services for that employer in such less than full-time work.
The department shall consider facts submitted under subdivision (a) of this section together with any information in its possession and promptly notify the employer of its ruling. If the department finds that an individual is, under Section 1252, unemployed in any week on the basis of the individual having less than full-time work, and that the employer submitting facts under this section is a base period employer for whom the individual has continuously, commencing in or prior to the beginning of the base period, rendered services in such less than full-time work, that employer’s account shall not be charged, except as provided by Section 1026 or if the department determines pursuant to Section 1026.1 that the employer’s reserve account should not be credited, for benefits paid the individual in any week in which such wages are payable by that employer to the individual. The employer may appeal from a ruling or reconsidered ruling to an administrative law judge within 30 days after service of notice of the ruling or reconsidered ruling. The 30-day period may be extended for good cause, which shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect. The director shall be an interested party to any appeal. The department may for good cause reconsider any ruling or reconsidered ruling within either five days after an appeal to an administrative law judge is filed or, if no appeal is filed, within 30 days after service of the notice of the ruling or reconsidered ruling.
This section shall become operative on July 1, 2015.
The director shall not less frequently than once each year furnish each employer with an itemized statement of the charges to the reserve account, and a statement of the reserve account showing the credits and charges, the net balance of the reserve account and the contribution rate for the applicable rating period.
The employer, within 60 days after the date of mailing of any statement of charges or credits and charges to the reserve account, or within an additional period not exceeding 60 days which may for good cause be granted by the director, may file with the director a written protest on any item shown thereon. The protest shall set forth the specific grounds on which it is made. No protest may be made on the ground that a claimant was ineligible for a benefit payment where the employer was notified as required by this division and any authorized regulation of the filing of a claim for the benefits or of a determination of the claimant’s eligibility therefor and the employer failed to file a timely appeal on the benefit claim, or a final decision of an administrative law judge or of the appeals board affirmed the payment of the benefits. Except as to corrections made by the director as provided in Section 1036, the contribution rate and other items shown on any such statement of charges or statement of account shall be final unless a protest is filed within the time prescribed in this section.
The employer, within 30 days after the last working day of March, may file a protest on the grounds that the director did not allow voluntary unemployment insurance contributions to the reserve account in accordance with Section 976.5.
The director shall give notice, pursuant to Section 1206, to the employer of the correction of any error which the director finds in any statement of account or statement of charges. Except in the case where fraud, intent to evade, misrepresentation, or willful nondisclosure is found, the notice of correction shall be issued prior to the expiration of the rating period to which a statement relates.
Any additional amount of contributions resulting from an increased contribution rate caused by the correction of any error that the director finds in any statement of reserve account or statement of charges shall be assessed within 180 days from the postmarked date of the notice of correction. These assessments shall be issued in accordance with Article 8 (commencing with Section 1126). However, these assessments shall become final on the last day of the calendar month following the calendar quarter in which the assessment is issued.
Any overpaid amount of contributions resulting from a reduced rate caused by the correction of an error that the director finds on any statement of reserve account or statement of charges shall be refunded within 180 days of the postmarked date of the notice of correction. These refunds shall be issued in accordance with Article 9 (commencing with Section 1176).
If a protest involving the contribution rate is pending when any contribution to which such rate relates is due, the employer shall pay the contribution at the rate shown in the statement furnished by the director. Such a protest, however, shall constitute a claim for refund under Article 9 of this chapter, and if a final determination on the protest reduces the contribution rate the amount of overpayment shall be promptly credited or refunded as provided in that article.
ARTICLE 5. Transfer of Reserve Accounts [1051. - 1061.]
Whenever any employing unit acquires the organization, trade, or business, or substantially all of the assets thereof, or a distinct and severable portion of such organization, trade, or business, of any employer, excepting any assets retained by the employer incident to the liquidation of his obligations (whether or not the acquiring employing unit was an “employing unit” within the meaning of Section 135 prior to such acquisition), and continues such organization, trade, or business, or such distinct and severable portion thereof without substantial reduction of personnel resulting from such acquisition, an application may be made within 90 days of such acquisition for transfer of reserve account. The application shall contain the name and address of the predecessor, the date of acquisition, the name of the successor, the number of employees prior to and subsequent to the date of acquisition, and, in case of severable portions, such pay roll data as may be required by the department to determine the proper amount to be transferred.
To the extent permitted by federal law, Sections 1051, 1052, and 1053 are applicable to acquisitions by a nonprofit organization which has elected reimbursement financing pursuant to Section 801 and the director shall transfer the reserve account of the predecessor employer to the successor nonprofit organization. Notwithstanding Section 1029, the reserve account shall not be canceled and the cost of benefits otherwise chargeable to the organization shall be charged to the reserve account until it is exhausted.
Upon receipt of the application the separate account, actual contribution and benefit experience and payrolls of the predecessor or that part thereof, as determined by authorized regulations, which pertains to the organization, trade, or business, or portion thereof acquired, shall be transferred to the successor employer for the purpose of determining its rate of contribution after the acquisition with the same effect for that purpose as if the operations of the predecessor had at all times been carried on by the successor. The separate account shall be transferred by the director to the successor employer and, as of the date of the acquisition, shall become the separate account or part of the separate account, as the case may be, of the successor employer, and the benefits thereafter chargeable to the predecessor employer on account of employment relating to the transferred organization, trade, or business or transferred portion thereof prior to the date of the acquisition shall be charged to the separate account. This section shall not apply to any acquisition which is determined by the director to have been made for the purpose of obtaining a more favorable rate of contributions under Section 977.
Sections 1051 and 1052 are applicable to applications for transfer of reserve accounts made after the 90-day period beginning with the date of acquisition but prior to the cancellation of the reserve account pursuant to Section 1029 if the reserve account has not been reacquired by the predecessor on re-entering business or, in the case of distinct and severable portions, if the predecessor did not continue in business, but any amendment of the contribution rate shall be made as of the first day of the calendar quarter next succeeding the date of the application.
The provisions of this article requiring a specific application for transfer of reserve account shall not apply to any successor who through error or inadvertence continued to file contribution reports and pay contributions for the account and at the rate determined by the department to apply to the predecessor employer, but such reporting and payment shall be deemed to be in lieu of the application and shall be given the same effect as though a specific application had been filed during the 90-day period beginning with the date of acquisition.
In the event of a denial or granting of an application for transfer of reserve account, the director shall give notice pursuant to Section 1206 to the employing unit making such application, and to the predecessor employing unit to whose reserve account the application relates, if such predecessor employing unit has continued in business as an employer.
The director may prescribe regulations for the establishment, maintenance, and dissolution of joint accounts by two or more employers and shall, in accordance with such regulations, upon application by two or more employers to establish such account or to merge their several individual accounts in a joint account, maintain such joint account, as if it constituted a single employer’s account.
Upon dissolution of a joint venture each participating employer may within 90 days apply for the transfer of his proportionate share of the reserve account. Upon receipt of the application the separate account, actual contribution and benefit experience and pay rolls of such joint venture shall be apportioned among the employers making such application in the same proportion that assets are distributed among the participating employers, and the portion thereof of each shall be transferred to each such employer for the purpose of determining its rate of contribution after the dissolution with the same effect for such purpose as if the applicable portion of the operations of such joint venture had at all times been carried on by such employer. Such portion of such separate account shall be transferred by the director to each such employer and as of the date of such dissolution shall become the separate account or part of the separate account, as the case may be, of such employer. The benefits thereafter chargeable to such joint venture on account of employment relating to such joint venture prior to the date of such dissolution shall be charged to the separate accounts of such employers in proportion to their participation in the joint venture. Any such joint venture shall promptly notify the director of its dissolution.
As used in this section only, “employer” includes the successor of an employer and any subsequent successor employer or employers.
As used in this article the term “joint venture” means a separate employing unit which has been organized by two or more employers to accomplish a contract or project or series of contracts or projects and which is wholly owned by such employers. As used in this section only, “employer” means any individual or type of organization, including any partnership, joint venture, association, trust, estate, joint stock company, insurance company, corporation whether domestic or foreign, and the receiver, trustee in bankruptcy, trustee or successor thereof, and the legal representative of a deceased person.
A change in contribution rate caused by a transfer under this article of all or a portion of the separate account, actual contribution and benefit experience and pay rolls shall not become effective earlier than the beginning of the calendar quarter next succeeding the effective date of the transfer.
For purposes of this article, the reserve account attributable to a transferred business shall also be transferred to, and combined with, the reserve account attributable to the employer to whom that business is transferred, if both of the following are satisfied:
An employer transfers all or part of its business or payroll to another employer.
At the time of transfer, both employers are under common ownership, management, or control.
This section shall be applied to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.
ARTICLE 6. Records, Reports and Contribution Payments [1085. - 1098.]
Every employing unit shall keep a true and accurate work record of:
All his workers and their status, i.e., employed, on layoff or leave of absence.
The wages paid by him to each worker.
Such other information as the director deems necessary to proper administration of this division.
Each employing unit within 15 days after becoming an employer as defined in this part shall register with the department on a form prescribed by the department.
Notwithstanding subdivision (a), an Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) that employed one or more workers on or after December 21, 2000, and prior to the operative date of the statute adding this subdivision at the 2001 portion of the 2001–02 Regular Session of the Legislature that has not registered with the department by the operative date of the statute, shall register with the department within 15 days of that operative date.
The subject date for employers who register with the department under the provisions of paragraph (1) shall be December 21, 2000, or the date that employer first hired an employee, whichever is later.
Any officer or employee of the Sales and Use Tax Division of the Board of Equalization who is authorized to accept an application for a seller’s permit under Section 6066 of the Revenue and Taxation Code or authorized to register a retailer under Section 6226 of the Revenue and Taxation Code is a duly authorized agent of the Employment Development Department for purposes of accepting registration of employers as required in this part.
The department shall reimburse the Board of Equalization for any additional costs incurred by reason of services by any of its officers or employees to the department pursuant to this section.
Each employer shall file with the director within the time required by subdivision (a) or (d) of Section 1110 for payment of employer contributions, a report of contributions, a quarterly return, and a report of wages paid to the employer’s workers in the form and containing any information as the director prescribes. An electronic funds transfer of contributions pursuant to subdivision (f) of Section 1110 shall satisfy the requirement for a report of contributions. The quarterly return shall include the total amount of wages, employer contributions required under Sections 976 and 976.6, worker contributions required under Section 984, the amounts required to be withheld under Section 13020, or withheld under Section 13028, and any other information as the director shall prescribe. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028.
In order to enhance efforts to reduce tax fraud and to reduce the personal income tax reporting burden, effective January 1, 1997, the report of wages shall also include the full first name of the employee and total wages, as defined in Section 13009, paid to each employee. This paragraph shall apply to reports of wages for all periods ending on or before December 31, 1999.
For all periods beginning on or after January 1, 2000, the report of wages shall also include total wages subject to personal income tax, as defined in Section 13009.5, paid to each employee.
Each employer shall file with the director within the time required by subdivision (b) or (d) of Section 1110 for payment of worker contributions, a report of contributions containing the employer’s business name, address, and account number, the total amount of worker contributions due, and any other information as the director shall prescribe. The director shall prescribe the form for the report of contributions. An electronic funds transfer of contributions pursuant to subdivision (f) of Section 1110 shall satisfy the requirement for a report of contributions.
In addition to the report of contributions, quarterly return, and report of wages required by employers under subdivision (a), an individual who has elected coverage under subdivision (a) of Section 708 is also required to file a separate report of contributions, and quarterly return, subject to Part 2 (commencing with Section 2601).
For purposes of making a report of wages under subdivision (a), employers that are required under Section 6011 of the Internal Revenue Code and authorized regulations thereunder to file magnetic media returns, shall, within 90 days of becoming subject to this requirement, do one of the following:
File any subsequent reports of wages electronically.
Establish to the satisfaction of the director that there is a lack of automation, a severe economic hardship, a current exemption from submitting magnetic media or electronic information returns for federal purposes, or other good cause for not complying with this subdivision. Approved waivers shall be valid for one year or longer, at the discretion of the director.
The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
Notwithstanding subdivision (e), effective January 1, 2017, an employer with 10 or more employees shall file the report of contributions, quarterly return, and report of wages electronically.
Notwithstanding subdivision (e), effective January 1, 2018, all employers shall file the report of contributions, quarterly return, and report of wages electronically.
Notwithstanding paragraphs (1) and (2), an employer may request a waiver from the electronic filing requirements 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.
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.
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.
This section shall not apply to any department, agency, or instrumentality of the United States.
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.
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.
The report shall contain the following:
The name, address, and social security number of the employees.
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.
The first date the employee worked.
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.
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.
On and after January 1, 2013, and before January 1, 2019, information collected pursuant to this section may be used for the following purposes:
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.
Locating individuals for purposes of establishing paternity and establishing, modifying, and enforcing child support obligations.
Administration of employment security and workers’ compensation programs.
Providing employer or employee information to the Franchise Tax Board and the State Board of Equalization for the purpose of tax or fee enforcement.
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.
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.
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:
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.
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.
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.
On and after January 1, 2019, information collected pursuant to this section may be used for the following purposes:
Administration of this code.
Locating individuals for purposes of establishing paternity and establishing, modifying, and enforcing child support obligations.
Administration of employment security and workers’ compensation programs.
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.
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.
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:
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.
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.
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.
For purposes of this section, “employer” includes a labor union hiring hall.
This section shall become operative on July 1, 1998.
Each employer, pursuant to authorized regulations, shall furnish a written statement to the worker showing the excess of the worker contributions required with respect to wages included in Section 927 and subdivision (n) of Section 13009 over the worker contributions withheld pursuant to Sections 984 and 13020, and shall file a copy of this statement with the director. If the employer fails to furnish the statement, as required by this section and authorized regulations, he or she shall be liable for the excess of the worker contributions.
Effective January 1, 2001, any service-recipient, as defined in subdivision (b), who makes or is required to make a return to the Internal Revenue Service, in accordance with subdivision (a) of Section 6041A of the Internal Revenue Code (relating to payments made to a service-provider as compensation for services) shall file with the department information as required under subdivision (c).
For purposes of this section:
“Service-recipient” means any individual, person, corporation, association, or partnership, or agent thereof, doing business in this state, deriving trade or business income from sources within this state, or in any manner in the course of a trade or business subject to the laws of this state. “Service-recipient” also includes the State of California or any political subdivision thereof, including the Regents of the University of California, any charter city, or any political body not a subdivision or agency of the state, and any person, employee, department, or agent thereof.
“Service-provider” means an individual who is not an employee of the service-recipient for California purposes and who received compensation or executes a contract for services performed for that service-recipient within or without the state.
Each service-recipient shall report all of the following information to the department, within 20 days of the earlier of first making payments that in the aggregate equal or exceed six hundred dollars ($600) in any year to a service-provider, or entering into a contract or contracts with a service-provider providing for payments that in the aggregate equal or exceed six hundred dollars ($600) in any year:
The service-recipient’s federal employer identification number, California state employer account number, social security number, or other identifying number as required by the Employment Development Department in consultation with the Franchise Tax Board.
The date the contract is executed, or if no contract, the date payments in the aggregate first equal or exceed six hundred dollars ($600).
The total dollar amount of the contract, if any, and the contract expiration date.
The department shall retain information collected pursuant to this section until November 1 following the tax year in which the contract is executed, or if no contract, the tax year in which the aggregate payments first equal or exceed six hundred dollars ($600).
For each failure to fully comply with subdivision (c), 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 service recipient and service provider not to supply the required report or to supply a false or incomplete report.
Information obtained by the department pursuant to this section may be released only for purposes of establishing, modifying, or enforcing child support obligations under Section 17400 of the Family Code and for child support collection purposes authorized under Article 5 (commencing with Section 19271) of Chapter 5 of Part 10.2 of the Revenue and Taxation Code, or to the Franchise Tax Board for tax enforcement purposes or for the administration of this code.
This section shall become operative on January 1, 2001.
Commencing with the first calendar quarter of calendar year 2026, a motion picture payroll services company shall file with the director, within the same time required by subdivision (a) of Section 1110 for payment of employer contributions, a report of payments made to a loan-out company pursuant to subdivision (b).
The report shall include all of the following information:
The total amount of payments made to the loan-out company.
The business name, address, and telephone number of the loan-out company.
The federal employer identification number, California employer account number, or other identifying number of the loan-out corporation, as required by the Employment Development Department, in consultation with the Franchise Tax Board.
The full name, address, and social security number of any individual whose services were provided through the loan-out company.
The name, address, and federal employer identification number, California employer account number, or other identifying number of the motion picture payroll services company, as required by the Employment Development Department, in consultation with the Franchise Tax Board.
Any other information as the director shall prescribe.
The Franchise Tax Board may access the information filed with the department pursuant to this section.
A lack of access to the information required to be reported under this section does not relieve any obligation on a motion picture payroll services company to continue to timely pay a loan-out company all payments due.
For each failure to fully comply with subdivisions (a), (b), and (d), unless the failure is due to good cause, the department may assess a penalty of twenty-four dollars ($24), or, if the failure is willful or fraudulent, the department may assess a penalty of four hundred ninety dollars ($490).
A failure to fully comply with subdivisions (a) and (b) shall be deemed to be for good cause pursuant to paragraph (1) if a motion picture payroll services company has requested that a loan-out company provide information required by subdivision (b) and the loan-out company does not provide the requested information, or provides incorrect or incomplete information.
For purposes of this section, the definitions in Section 679 shall apply, as applicable.
Each employer shall post and maintain in places readily accessible to individuals in their service such printed statements concerning benefit rights and other matters as may be prescribed by authorized regulations. Each employer shall, pursuant to authorized regulations, supply each individual at the time they become unemployed with copies of printed statements or materials relating to claims for benefits. Each employer shall immediately notify each employee of any change in their relationship with the employer. Failure to comply with this section by an employer shall constitute a misdemeanor. Such printed statements shall be supplied by the director to each employer without cost to them.
This section shall become operative on January 1, 2029.
Every assignee, receiver, trustee in bankruptcy, or other representative of an insolvent employing unit, and every administrator or executor of the estate of a deceased employing unit, shall within 30 days after assuming office send notice in writing of the name and address of the employing unit, his own name and address, and such other information as may be required by the director.
Within four months after the mailing of the notice required of every administrator or executor of the estate of a deceased employing unit under subdivision (a), the director shall file or present his claim for contributions, penalty, and interest based upon wages paid by the employing unit during his lifetime. The administrator or executor of the estate of a deceased employing unit shall succeed to all the rights and obligations of the deceased employing unit under this division.
Every employing unit shall furnish to the director, administrative law judge, or deputy, upon demand, a sworn statement of the matters contained in the records required by Section 1085. If such records are kept pursuant to contract with a financial institution as defined in Section 7465 of the Government Code, the employing unit shall also furnish to the director or the director’s authorized representative an authorization for disclosure of such account or accounts. The authorization for disclosure shall be that provided for in Section 7473 of the Government Code. Such records shall be open to inspection and shall be subject to being copied by the director or his authorized representative at any time during the business hours of the employing unit. Any claimant or his authorized representative at a hearing before a deputy or administrative law judge or the appeals board shall be supplied with information from such records to the extent necessary for the proper presentation of his claim.
In the event any employer shall fail to keep and furnish to the director, upon notice, any required records or reports necessary for a full determination, decision on appeal, or other proper disposition of any claim for benefits in any proceeding under this division, within such reasonable time as the director may by rule, regulation, or procedure prescribe, it shall be conclusively presumed that the claimant is entitled to the maximum total amount of benefits payable under this division unless it is established by other evidence which the director deems sufficient that a lesser total amount of benefits is properly due and owing to the claimant. If so established by other evidence upon default of the employer, after notice, such lesser total amount of benefits thus determined shall be conclusive. In all cases in which such presumptions shall apply, if the claimant has earned wages in employment for more than one employer during his base period, the accounts of the employer or employers who have properly kept and furnished the required records or reports shall not be charged with benefits in an amount exceeding that which such accounts would have been charged had the claimant been entitled only to benefits determined by the total of the wages earned and the number of calendar quarters worked for them and all benefits paid in excess thereof shall be charged solely against the accounts of the employer or employers who have failed to keep or furnish the required records or reports.
Except as otherwise specifically provided in this code, the information obtained in the administration of this code is confidential, not open to the public, and shall be for the exclusive use and information of the director in discharge of his or her duties.
The information released to authorized entities pursuant to other provisions of the code shall not be admissible in evidence in any action or special proceeding, other than one arising out of the provisions of this code or one described in Section 1095.
The information may be tabulated and published in statistical form for use by federal, state, and local governmental departments and agencies, and the public, except that the name of the employing unit or of any worker shall never be divulged in the course of the tabulation or publication.
Any employee or his or her representative may receive his or her wage information upon written request by the employee. The information shall be provided without charge.
Any person who knowingly accesses, uses, or discloses any confidential information without authorization is in violation of this section and is guilty of a misdemeanor.
The director shall permit the use of any information in the director’s possession to the extent necessary for any of the following purposes, and may require reimbursement for all direct costs incurred in providing any and all information specified in this section, except information specified in subdivisions (a) to (e), inclusive:
To enable the director or the director’s representative to carry out their responsibilities under this code.
To properly present a claim for benefits.
To acquaint a worker or their authorized agent with the worker’s existing or prospective right to benefits.
To furnish an employer or their authorized agent with information to enable the employer to fully discharge their obligations or safeguard their rights under this division or Division 3 (commencing with Section 9000).
To enable an employer to receive a reduction in contribution rate.
To enable federal, state, or local governmental departments or agencies, subject to federal law, to verify or determine the eligibility or entitlement of an applicant for, or a recipient of, public social services provided pursuant to Division 9 (commencing with Section 10000) of the Welfare and Institutions Code, or Part A of Subchapter IV of the federal Social Security Act (42 U.S.C. Sec. 601 et seq.), and state or federal subsidies offered through the California Health Benefit Exchange provided pursuant to Title 22 (commencing with Section 100500) of the Government Code, when the verification or determination is directly connected with, and limited to, the administration of public social services.
To enable county administrators of general relief or assistance, or their representatives, to determine entitlement to locally provided general relief or assistance, when the determination is directly connected with, and limited to, the administration of general relief or assistance.
To enable state or local governmental departments or agencies to seek criminal, civil, or administrative remedies in connection with the unlawful application for, or receipt of, relief provided under Division 9 (commencing with Section 10000) of the Welfare and Institutions Code or to enable the collection of expenditures for medical assistance services pursuant to Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.
To provide any law enforcement agency with the name, address, telephone number, birth date, social security number, physical description, and names and addresses of present and past employers, of any victim, suspect, missing person, potential witness, or person for whom a felony arrest warrant has been issued, when a request for this information is made by any investigator or peace officer as defined by Sections 830.1 and 830.2 of the Penal Code, or by any federal law enforcement officer to whom the Attorney General has delegated authority to enforce federal search warrants, as defined under Sections 60.2 and 60.3 of Title 28 of the Code of Federal Regulations, as amended, and when the requesting officer has been designated by the head of the law enforcement agency and requests this information in the course of and as a part of an investigation into the commission of a crime when there is a reasonable suspicion that the crime is a felony and that the information would lead to relevant evidence. The information provided pursuant to this subdivision shall be provided to the extent permitted by federal law and regulations, and to the extent the information is available and accessible within the constraints and configurations of existing department records. Any person who receives any information under this subdivision shall make a written report of the information to the law enforcement agency that employs the person, for filing under the normal procedures of that agency.
This subdivision shall not be construed to authorize the release to any law enforcement agency of a general list identifying individuals applying for or receiving benefits.
The department shall maintain records pursuant to this subdivision only for periods required under regulations or statutes enacted for the administration of its programs.
This subdivision shall not be construed as limiting the information provided to law enforcement agencies to that pertaining only to applicants for, or recipients of, benefits.
The department shall notify all applicants for benefits that release of confidential information from their records will not be protected should there be a felony arrest warrant issued against the applicant or in the event of an investigation by a law enforcement agency into the commission of a felony.
To provide public employee retirement systems in California with information relating to the earnings of any person who has applied for or is receiving a disability income, disability allowance, or disability retirement allowance, from a public employee retirement system. The earnings information shall be released only upon written request from the governing board specifying that the person has applied for or is receiving a disability allowance or disability retirement allowance from its retirement system. The request may be made by the chief executive officer of the system or by an employee of the system so authorized and identified by name and title by the chief executive officer in writing.
To enable the Division of Labor Standards Enforcement in the Department of Industrial Relations to seek criminal, civil, or administrative remedies in connection with the failure to pay, or the unlawful payment of, wages pursuant to Chapter 1 (commencing with Section 200) of Part 1 of Division 2 of, and Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of, the Labor Code.
To enable federal, state, or local governmental departments or agencies to administer child support enforcement programs under Part D of Title IV of the federal Social Security Act (42 U.S.C. Sec. 651 et seq.).
To provide federal, state, or local governmental departments or agencies with wage and claim information in its possession that will assist those departments and agencies in the administration of the Victims of Crime Program or in the location of victims of crime who, by state mandate or court order, are entitled to restitution that has been or can be recovered.
To provide federal, state, or local governmental departments or agencies with information concerning any individuals who are or have been:
Directed by state mandate or court order to pay restitution, fines, penalties, assessments, or fees as a result of a violation of law.
Delinquent or in default on guaranteed student loans or who owe repayment of funds received through other financial assistance programs administered by those agencies. The information released by the director for the purposes of this paragraph shall not include unemployment insurance benefit information.
To provide an authorized governmental agency with any and all relevant information that relates to any specific workers’ compensation insurance fraud investigation. The information shall be provided to the extent permitted by federal law and regulations. For purposes of this subdivision, “authorized governmental agency” means the district attorney of any county, the office of the Attorney General, the Contractors State License Board, the Department of Industrial Relations, and the Department of Insurance. An authorized governmental agency may disclose this information to the State Bar of California, the Medical Board of California, or any other licensing board or department whose licensee is the subject of a workers’ compensation insurance fraud investigation. This subdivision shall not prevent any authorized governmental agency from reporting to any board or department the suspected misconduct of any licensee of that body.
To enable the Director of Consumer Affairs, or the director’s representative, to access unemployment insurance quarterly wage data on a case-by-case basis to verify information on school administrators, school staff, and students provided by those schools who are being investigated for possible violations of Chapter 8 (commencing with Section 94800) of Part 59 of Division 10 of Title 3 of the Education Code.
To provide employment tax information to the tax officials of Mexico, if a reciprocal agreement exists. For purposes of this subdivision, “reciprocal agreement” means a formal agreement to exchange information between national taxing officials of Mexico and taxing authorities of the State Board of Equalization, the Franchise Tax Board, and the Employment Development Department. Furthermore, the reciprocal agreement shall be limited to the exchange of information that is essential for tax administration purposes only. Taxing authorities of the State of California shall be granted tax information only on California residents. Taxing authorities of Mexico shall be granted tax information only on Mexican nationals.
To enable city and county planning agencies to develop economic forecasts for planning purposes. The information shall be limited to businesses within the jurisdiction of the city or county whose planning agency is requesting the information, and shall not include information regarding individual employees.
To provide the State Department of Developmental Services with wage and employer information that will assist in the collection of moneys owed by the recipient, parent, or any other legally liable individual for services and supports provided pursuant to Chapter 9 (commencing with Section 4775) of Division 4.5 of, and Chapter 2 (commencing with Section 7200) and Chapter 3 (commencing with Section 7500) of Division 7 of, the Welfare and Institutions Code.
To provide the State Board of Equalization with employment tax information that will assist in the administration of tax programs. The information shall be limited to the exchange of employment tax information essential for tax administration purposes to the extent permitted by federal law and regulations.
This section shall not be construed to authorize or permit the use of information obtained in the administration of this code by any private collection agency.
The total amount of the assessment.
To enable the Contractors State License Board to verify the employment history of an individual applying for licensure pursuant to Section 7068 of the Business and Professions Code.
To provide any peace officer with the Division of Investigation in the Department of Consumer Affairs information pursuant to subdivision (i) when the requesting peace officer has been designated by the Chief of the Division of Investigation and requests this information in the course of and as part of an investigation into the commission of a crime or other unlawful act when there is reasonable suspicion to believe that the crime or act may be connected to the information requested and would lead to relevant information regarding the crime or unlawful act.
To enable the Labor Commissioner of the Division of Labor Standards Enforcement in the Department of Industrial Relations to identify, pursuant to Section 90.3 of the Labor Code, unlawfully uninsured employers. The information shall be provided to the extent permitted by federal law and regulations.
To enable the Chancellor of the California Community Colleges, in accordance with the requirements of Section 84754.5 of the Education Code, to obtain quarterly wage data, commencing January 1, 1993, on students who have attended one or more community colleges, to assess the impact of education on the employment and earnings of students, to conduct the annual evaluation of district-level and individual college performance in achieving priority educational outcomes, and to submit the required reports to the Legislature and the Governor. The information shall be provided to the extent permitted by federal statutes and regulations.
(aa) To enable the Public Employees’ Retirement System to seek criminal, civil, or administrative remedies in connection with the unlawful application for, or receipt of, benefits provided under Part 3 (commencing with Section 20000) of Division 5 of Title 2 of the Government Code.
(ab) To enable the State Department of Education, the University of California, the California State University, and the Chancellor of the California Community Colleges, pursuant to the requirements prescribed by the federal American Recovery and Reinvestment Act of 2009 (Public Law 111-5), to obtain quarterly wage data, commencing July 1, 2010, on students who have attended their respective systems to assess the impact of education on the employment and earnings of those students, to conduct the annual analysis of district-level and individual district or postsecondary education system performance in achieving priority educational outcomes, and to submit the required reports to the Legislature and the Governor. The information shall be provided to the extent permitted by federal statutes and regulations.
(ac) To provide the Agricultural Labor Relations Board with employee, wage, and employer information, for use in the investigation or enforcement of the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code). The information shall be provided to the extent permitted by federal statutes and regulations.
(ad) (1) To enable the State Department of Health Care Services, the California Health Benefit Exchange, the Managed Risk Medical Insurance Board, and county departments and agencies to obtain information regarding employee wages, California employer names and account numbers, employer reports of wages and number of employees, and disability insurance and unemployment insurance claim information, for the purpose of:
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, and the Medi-Cal Access Program provided pursuant to Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code, when the verification or determination is directly connected with, and limited to, the administration of the state health subsidy programs referenced in this subparagraph.
Verifying or determining the eligibility of an applicant for, or a recipient of, state or 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), when the verification or determination is directly connected with, and limited to, the administration of the California Health Benefit Exchange.
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, when the verification or determination is directly connected with, and limited to, the administration of the Small Business Health Options Program.
The information provided under this subdivision shall be subject to the requirements of, and provided to the extent permitted by, federal law and regulations, including Part 603 of Title 20 of the Code of Federal Regulations.
(ae) To provide any peace officer with the Investigations Division of the Department of Motor Vehicles with information pursuant to subdivision (i), when the requesting peace officer has been designated by the Chief of the Investigations Division and requests this information in the course of, and as part of, an investigation into identity theft, counterfeiting, document fraud, or consumer fraud, and there is reasonable suspicion that the crime is a felony and that the information would lead to relevant evidence regarding the identity theft, counterfeiting, document fraud, or consumer fraud. The information provided pursuant to this subdivision shall be provided to the extent permitted by federal law and regulations, and to the extent the information is available and accessible within the constraints and configurations of existing department records. Any person who receives any information under this subdivision shall make a written report of the information to the Investigations Division of the Department of Motor Vehicles, for filing under the normal procedures of that division.
(af) Until January 1, 2020, to enable the Department of Finance to prepare and submit the report required by Section 13084 of the Government Code that identifies all employers in California that employ 100 or more employees who receive benefits from the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). The information used for this purpose shall be limited to information obtained pursuant to Section 11026.5 of the Welfare and Institutions Code and from the administration of personal income tax wage withholding pursuant to Division 6 (commencing with Section 13000) and the disability insurance program and may be disclosed to the Department of Finance only for the purpose of preparing and submitting the report and only to the extent not prohibited by federal law.
(ag) To provide, to the extent permitted by federal law and regulations, the Student Aid Commission with wage information in order to verify the employment status of an individual applying for a Cal Grant C award pursuant to subdivision (c) of Section 69439 of the Education Code.
(ah) To enable the Department of Corrections and Rehabilitation to obtain quarterly wage data of former inmates who have been incarcerated within the prison system in order to assess the impact of rehabilitation services or the lack of these services on the employment and earnings of these former inmates. Quarterly data for a former inmate’s employment status and wage history shall be provided for a period of one year, three years, and five years following release. The data shall only be used for the purpose of tracking outcomes for former inmates in order to assess the effectiveness of rehabilitation strategies on the wages and employment histories of those formerly incarcerated. The information shall be provided to the department to the extent not prohibited by federal law.
(ai) To enable federal, state, or local government departments or agencies, or their contracted agencies, subject to federal law, including the confidentiality, disclosure, and other requirements set forth in Part 603 of Title 20 of the Code of Federal Regulations, to evaluate, research, or forecast the effectiveness of public social services programs administered pursuant to Division 9 (commencing with Section 10000) of the Welfare and Institutions Code, or Part A of Subchapter IV of Chapter 7 of the federal Social Security Act (42 U.S.C. Sec. 601 et seq.), when the evaluation, research, or forecast is directly connected with, and limited to, the administration of the public social services programs.
(aj) (1) To enable the California Workforce Development Board, the Chancellor of the California Community Colleges, the Superintendent of Public Instruction, the Department of Rehabilitation, the State Department of Social Services, the Bureau for Private Postsecondary Education, the Department of Industrial Relations, the Division of Apprenticeship Standards, the Department of Corrections and Rehabilitation, the California Correctional Training and Rehabilitation Authority, the Employment Training Panel, and a chief elected official, as that term is defined in Section 3102(9) of Title 29 of the United States Code, to access any relevant quarterly wage data necessary for the evaluation and reporting of their respective program performance outcomes as required and permitted by various local, state, and federal laws pertaining to performance measurement and program evaluation, including responsibilities arising under Sections 14013, 14033, and 14042 of this code and Sections 2032 and 2038 of the Streets and Highways Code; the federal Workforce Innovation and Opportunity Act (Public Law 113-128); the workforce metrics dashboard pursuant to paragraph (1) of subdivision (i) of Section 14013; the Adult Education Block Grant Program consortia performance metrics pursuant to Section 84920 of the Education Code; the economic and workforce development program performance measures pursuant to Section 88650 of the Education Code; and the California Community Colleges Economic and Workforce Development Program performance measures established in Part 52.5 (commencing with Section 88600) of Division 7 of Title 3 of the Education Code. Disclosures under this subdivision shall comply with federal and state privacy laws that require the informed consent from program participants of city and county departments or agencies that administer public workforce development programs for the evaluation, research, or forecast of their programs regardless of local, state, or federal funding source.
Consistent with this subdivision, develop the minimum requirements for granting a request for disclosure of information authorized by this subdivision regardless of local, state, or federal funding source.
Develop a standard application for submitting a request for disclosure of information authorized by this subdivision.
Approve or deny a request for disclosure of information authorized by this subdivision, or request additional information, within 20 business days of receiving the standard application. The entity submitting the application shall respond to any request by the department for additional information within 20 business days of receipt of the department’s request. Within 30 calendar days of receiving any additional information, the department shall provide a final approval or denial of the request for disclosure of information authorized by this subdivision. Any approval, denial, or request for additional information shall be in writing. Denials shall identify the reason or category of reasons for the denial.
Make publicly available on the department’s internet website all of the following:
The minimum requirements for granting a request for disclosure of information authorized by this subdivision, as developed pursuant to subparagraph (A).
The standard application developed pursuant to subparagraph (B).
The timeframe for information request determinations by the department, as specified in subparagraph (C).
Contact information for assistance with requests for disclosures of information authorized by this subdivision.
Any denials for requests of disclosure of information authorized by this subdivision, including the reason or category of reasons for the denial.
(ak) (1) To provide any peace officer with the Enforcement Branch of the Department of Insurance with both of the following:
The information provided pursuant to this subdivision shall be provided to the extent permitted by federal statutes and regulations.
(al) To provide the CalSavers Retirement Savings Board with employer tax information for use in the administration of, and to facilitate compliance with, the CalSavers Retirement Savings Trust Act (Title 21 (commencing with Section 100000) of the Government Code). The information should be limited to the tax information the director deems appropriate, and shall be provided to the extent permitted by federal laws and regulations.
(am) (1) To enable the Joint Enforcement Strike Force as established by Section 329, and the Labor Enforcement Task Force, as established pursuant to Assembly Bill 1464 of the 2011–12 Regular Session (Chapter 21 of the Statutes of 2012), to carry out their duties.
Notify an employer that an employee has been determined eligible for advance payments of the premium tax credit and cost-sharing reductions and has enrolled in a qualified health plan through the California Health Benefit Exchange, as required pursuant to Section 155.310(h) of Title 45 of the Code of Federal Regulations. The information shall include available employer contact information, including addresses, email addresses, and telephone numbers.
Upon the request of either the California Health Benefit Exchange or the State Department of Health Care Services, the department shall also provide to the relevant state agency information on new applicants for unemployment insurance, state disability insurance, and paid family leave. The California Health Benefit Exchange and the State Department of Health Care Services shall at all times request from the department the minimum amount of information necessary from the information listed in paragraph (1) of subdivision (a) of Section 100503.9 of the Government Code, to accomplish the purposes of Section 100503.9 of the Government Code. The information shall be sent in a manner that is encrypted or otherwise complies with government data security best practices, as specified by the California Health Benefit Exchange. This information shall only be used for the purposes of outreach and marketing.
This subdivision shall become operative no later than September 1, 2023.
(as) To enable the office of the Chancellor of the California State University, the office of the Chancellor of the California Community Colleges, and the office of the President of the University of California to access any relevant quarterly wage data necessary for students who have attended their respective systems to assess the impact of education on the employment and earnings of those students and demonstrate compliance with the federal and state Workforce Pell Grant requirements pursuant to Public Law 119-21 to determine Workforce Pell Grant program eligibility. Disclosures and redisclosures under this subdivision shall be provided to the extent permitted by federal laws and regulations.
The director shall permit the use of any information in their possession to the extent necessary to enable the Behavioral Health Services Oversight and Accountability Commission to receive quarterly wage data of individuals with a mental health disorder or a substance use disorder, or both, served by the California public mental health and substance use disorder system for the purpose of monitoring and evaluating employment outcomes to determine the effectiveness of those services.
The director may require reimbursement for all direct costs incurred in providing any information specified in this section.
The information shall be provided to the extent permitted under applicable federal statute and regulation.
This section shall become operative on January 1, 2025, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.
Where a number of workers are normally employed in employment in the course of a year by several employers, such employers, with the approval of the director, may appoint an agent. The agent may maintain records and prepare and file returns and reports required under this division with respect to such workers, including returns and reports of wages paid to the workers, and may pay the employers’ and workers’ contributions levied under this division with respect to wages paid to such workers and perform such other acts on behalf of such employers as the director may authorize all in the same manner as though the agent were the employer of the workers.
The manner of crediting to each employer the employment experience of the group of employers who have appointed an agent pursuant to Section 1096, for the purpose of any classification of employers made pursuant to this division for the determinations of future rates of employers’ contributions, may be prescribed by authorized regulations. Employers who operate or do business in more than one place may, with the approval of the director, appoint a separate agent in each such place.
ARTICLE 7. Payment of Reported Contributions [1110. - 1119.]
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), 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.
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.
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.
An 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.
Contributions due pursuant to this section may be submitted by electronic funds transfer. Contributions submitted by electronic funds transfer shall be deemed complete in accordance with paragraph (4) of subdivision (e) of Section 13021.
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.
Notwithstanding subdivision (f), effective on and after January 1, 2018, all employers shall remit the contributions and withholdings by electronic funds transfer.
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.
For purposes of this section, “electronic funds transfer” shall have the same meaning as in Section 13021.5.
Notwithstanding any other provision of law, the director shall allocate any payment to the department relating to liability for contributions, withheld personal income tax, penalty and interest, in accordance with any designation made by the payer at or before the time the payment is made to the department.
Notwithstanding any other provision of law, if a payer, at or before the time a payment is made to the department, does not designate an obligation to which the payment is to be applied, the director shall allocate the payment in the following order of priority:
Penalties and interest due under this division, and penalties and interest due based upon withheld personal income tax.
The director may apply the following standards in making any allocation under this section:
Notwithstanding the provisions of Section 1110, whenever the liability of an employer for contributions under this division arises under the terms of a written contract in which such employer has agreed, for the benefit of another party to such contract, to assume ultimate liability for contributions under this division in the event of the default in payment thereof by any other employer affected by such contract, such contributions shall not become delinquent and no penalties or interest prescribed by this chapter shall commence to accrue with respect to such contracting employer, until after the 30th day following the date of mailing or service of notice upon him, by the director, of the default of any such other employer.
The director for good cause may extend for not to exceed 60 days the time for making a return or report or paying without penalty any amount required to be paid under this division. Any employer to whom an extension is granted and who pays the amount required within the period for which the extension is granted shall pay, in addition to the contributions, interest at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code from the date on which the payment would have been delinquent without the extension until the date of payment.
If the Governor declares a state of emergency, the director may extend the time requirements for filing returns or reports pursuant to Section 1088 and the time requirement for payment of employer and worker contributions pursuant to Section 1110. The extension granted by the director pursuant to this section shall apply only to employers prevented by the conditions giving rise to the state of emergency from timely filing their returns or reports, or from timely payment of the taxes due.
Any employer who without good cause fails to pay any contributions required of him or her or of his or her workers, except amounts assessed under Article 8 (commencing with Section 1126), within the time required shall pay a penalty of 15 percent of the amount of those contributions.
Any employer required to remit payments electronically who without good cause remits those amounts by means other than electronic shall pay a penalty of 15 percent of the amount of those contributions.
Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to remit payments electronically, excluding employers previously required to remit payments by electronic funds transfer under Section 13021, who remits those amounts within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
An employer who is required to file a quarterly return electronically pursuant to Section 1088 and without good cause fails to file a quarterly return electronically shall pay a penalty of fifty dollars ($50), in addition to any other penalties imposed by this code.
Notwithstanding subdivision (a), on and after January 1, 2017, and before January 1, 2019, an employer required to file a quarterly return electronically who files a quarterly return within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (a).
Any employer who without good cause fails to file the return and reports required by subdivision (a) of Section 1088 and subdivision (a) of Section 13021 within 60 days of the time required under subdivision (a) of Section 1110 shall pay a penalty of 15 percent of the amount of contributions and personal income tax withholding required by this report. This penalty shall be in addition to the penalties required by Sections 1112 and 1126.
For purposes of subdivision (a), the amount of contributions and personal income tax required by the report of contributions shall be reduced by the amount of any contributions and personal income tax paid on or before the prescribed payment dates.
The changes made to this section by the act adding this subdivision shall apply on and after July 1, 2014.
Any employer who fails to pay any contributions required of him or of his workers, except amounts assessed under Article 8 (commencing with Section 1126), within the time required shall become liable for interest on such contributions at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code from and after the date of delinquency until paid.
An employer who, through an error caused by excusable neglect, makes an underpayment of the amount due on a report of contributions pursuant to subdivision (b) of Section 1088 shall not be liable for penalty or interest under Sections 1112, 1113, 1127 or 1129 if proper adjustment is made at the time of the filing of the quarterly report of contributions and quarterly return, for the same calendar quarter under subdivision (a) of Section 1088 and an explanation of the error is attached to the report or return.
Any employer who, without good cause, fails to file within 15 days after service by the director of notice pursuant to Section 1206 of a specific written demand therefor, a report of wages of each of his or her workers required by this division, shall pay in addition to other amounts required, for each unreported wage item a penalty of twenty dollars ($20).
Any employer required by this division to file a report of wages of each of his or her workers on magnetic media or other electronic means as prescribed by subdivision (e) or (h) of Section 1088, who, without good cause, instead files a report of wages by means other than electronic, shall pay, in addition to other amounts required, for each wage item a penalty of twenty dollars ($20).
Notwithstanding subdivision (b), on and after January 1, 2017, and before January 1, 2019, an employer required to file a report of wages, excluding employers previously required to file a report of wages under subdivision (e) of Section 1088, who files a report of wages within the time required by means that are not electronic shall not be subject to the penalty described in subdivision (b).
The changes made to this section by Chapter 28 of the Statutes of 2014 shall apply on and after July 1, 2014.
If the director finds that the collection of any contributions will be jeopardized in any case where an employing unit is insolvent, or is delinquent in a substantial amount of contributions due under this division, or is about to discontinue business at any of its known places of business, or the business is of a temporary or seasonal nature, the director may, upon giving the employing unit 10 days’ notice pursuant to Section 1206:
Require payment of contributions with respect to wages paid from the beginning date of the calendar quarter in which notice is given to the date designated in the notice.
Require payment of contributions for reporting periods less than calendar quarters.
As used in this section “reporting period” means that period less than a calendar quarter which is established by the director.
Contributions required under subdivision (a)(1) of this section are due and payable on the date designated in the notice and shall become delinquent if not paid within 10 days of the due date.
Contributions required under subdivision (a)(2) of this section are due and payable on the first day of the reporting period following the close of each reporting period and shall become delinquent if not paid within 10 days of the due date.
The employing unit shall file within the time required for payment of contributions under this section a report or return as required by Section 1088, in the form and containing the information that the director prescribes.
Every employing unit except a domestic or foreign corporation or a domestic or foreign limited liability company shall, within 10 days of quitting business, file with the director a final return and report of wages of its workers, in such form and containing such information as the director prescribes.
Every domestic corporation and domestic limited liability company shall, within 10 days of quitting business or within 10 days of the commencement of proceedings to wind up its affairs and voluntarily dissolve, whichever expires the earlier, file with the director a return and a report of wages of its workers, in such form and containing such information as the director prescribes.
Every foreign corporation and foreign limited liability company shall, within 10 days of quitting business or within 10 days of the surrender of its right to engage in business of this state in accordance with Section 2112 and subdivision (d) of Section 2114 of the Corporations Code for foreign corporations or Section 17708.08 of the Corporations Code for foreign limited liability companies, whichever expires the earlier, file with the director a final return and report of wages of its workers, in such form and containing such information as the director prescribes.
As used in this section, “quitting business” does not include any change in the form or membership of an employing unit if before and after such change 50 percent or more of the control of management is held by the same individual, or is held by an individual before death and after the individual’s death by the individual’s estate or heirs.
Contributions with respect to a return required under subdivision (a) are due and payable on the first day of the applicable 10-day period established pursuant to subdivision (a) and shall become delinquent if not paid within 10 days of the due date.
The director for good cause may extend for not to exceed 30 days the time for making a return or paying without penalty or interest any amount required to be paid under this section.
If any employer fails to file the annual reconciliation return described in subdivision (e) of Section 1088 or subdivision (j) of Section 13021 on or before 30 days after notice has been given to the employer of his or her failure to file, unless the failure is due to good cause, the employer, in addition to any other penalties imposed by this code, shall pay a penalty of one thousand dollars ($1,000), or 5 percent of the employer and worker contributions required to be reconciled by subdivision (e) of Section 1088, whichever is less.
The director shall notify the United States Internal Revenue Service and the United States Department of Labor of the failure of an Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) to make a payment of an amount required to be paid under this article within 90 days of the date of a notice specifying the amount due. If the amount due is subsequently paid by the Indian tribe, the director shall notify the United States Internal Revenue Service and the United States Department of Labor of the satisfaction of the liability.
ARTICLE 8. Assessments [1126. - 1145.]
If any employing unit fails to make a return or report as required under this division, the director shall make an estimate based upon any information in his or her possession or that may come into his or her possession of the amount of wages paid for employment in the period or periods for which no return or report was filed and upon the basis of the estimate shall compute and assess the amounts of employer and worker contributions payable by the employing unit, adding thereto a penalty of 15 percent of the amount of contributions.
The changes made to this section by the act adding this subdivision shall apply on and after July 1, 2014.
If any employing unit fails to register with the department as required under Section 1086, and the failure is due to intentional disregard or intent to evade this division or authorized regulations, a penalty of one hundred dollars ($100) per nonreported employee shall be added to an assessment issued in accordance with Section 1126.
For purposes of this section, the number of nonreported employees shall be defined as the highest number of employees determined by the department to have been engaged by the employer during any single calendar quarter included in the assessment under Section 1126.
If the director is not satisfied with any return or report made by any employing unit of the amount of employer or worker contributions, he or she may compute the amount required to be paid upon the basis of facts contained in the return or reports or may make an estimate upon the basis of any information in his or her possession or that may come into his or her possession and make an assessment of the amount of the deficiency. If any part of the deficiency is due to negligence or intentional disregard of this division or authorized regulations, a penalty of 15 percent of the amount of the deficiency shall be added to the assessment.
The changes made to this section by the act adding this subdivision shall apply on and after July 1, 2014.
If the director determines that an individual or entity that is reporting employee wages pursuant to Section 1088 or other applicable sections is not the correct employer of the employees whose wages are reported, the director shall determine the correct employer and, subject to this section, shall apply the provisions of this code to the correct employer.
Upon a determination made under subdivision (a), the director shall give notice of the determination pursuant to Section 1206 to both of the following:
To the individual or entity reporting employee wages of the determination that the individual or entity is not the correct employer of the reported employees.
To the individual or entity determined to be the correct employer of those reported employees.
The notice shall contain a statement of the facts and circumstances upon which the determination was based. An individual or entity so noticed shall have the right to petition for review of the determination within 30 days of the notice, as provided in Section 1222.
During the pendency of a petition for review pursuant to subdivision (b), the individual or entity responsible for reporting employee wages pursuant to Section 1088 or other applicable sections shall be determined as follows:
When a director’s determination that an individual or entity is the correct employer of employees whose wages have been reported by another individual becomes final:
If the failure of the employing unit to file a return or report within the time required by this division and authorized regulations or if any part of the deficiency for which an assessment is made is due to fraud or an intent to evade this division or authorized regulations, a penalty of 50 percent of the amount of contributions assessed shall be added to the assessment. This penalty is in addition to the penalties provided pursuant to Sections 1126 and 1127.
An additional penalty of 50 percent of the amount of contributions assessed shall be added to any assessment that includes a penalty under subdivision (a), if the employer paid wages and failed to provide information returns as required under Section 13050 of this code or Section 6041A of the Internal Revenue Code. This penalty shall be in addition to any penalties under Section 1126 or 1127.
If the director finds that an individual or business entity has exchanged money on behalf of an employer and the employer used the cash proceeds from the exchange to conceal the payment of wages with an intent to evade a provision of this code, the director shall assess a penalty against the individual or business entity in an amount equal to 100 percent of any assessed contributions that were based on the concealed wages. An employing unit subject to a penalty under Section 1128 shall not be assessed a penalty under this section for the same violation.
For purposes of this section, “business entity” means a partnership, corporation, association, limited liability company, or Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code).
The penalty applies only when there is evidence that the individual or business entity who exchanged money knew that the employer intended to use the cash proceeds from the exchange to conceal the payment of wages and thereby avoid the payment of contributions or taxes required by this code.
The amount of each assessment shall bear interest at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code from and after the last day of the month following the close of the calendar quarter, or from and after the 15th day of the month following the close of the calendar month, for which the contributions should have been returned until the date of payment.
One or more assessments may be made for the amount due for one or for more than one period and overpayments may be offset against underpayments.
The director shall give to the employing unit against whom an assessment is made a written notice of the assessment pursuant to Section 1206.
Except in the case of failure without good cause to file a return or report, fraud or intent to evade any provision of this division or authorized regulations, every notice of assessment shall be made within three years after the last day of the month following the close of the calendar quarter during which the contribution liability included in the assessment accrued or within three years after the deficient return or report is filed, or was due, whichever period expires the later. An employing unit may waive this limitation period or may consent to its extension.
In case of failure without good cause to file a return or report, every notice of assessment shall be made within eight years after the last day of the month following the close of the calendar quarter during which the contribution liability included in the assessment accrued. An employing unit may waive this limitation period or may consent to its extension.
The changes made to this section by the act adding this subdivision shall apply on and after July 1, 2014.
If the director finds that an assessment or portion thereof has been erroneously made, he may cancel the assessment or portion thereof in the following cases:
Where no petition for reassessment has been filed.
Where a petition for reassessment is filed, if the cancellation is made prior to the mailing of a decision of the administrative law judge.
Where a petition for reassessment has been filed and an order or decision of an administrative law judge or of the appeals board has been issued on any grounds not on the merits, if the cancellation is approved by the appeals board.
If the director finds, in accordance with Section 1137.1, that the collection of any contributions will be jeopardized by delay the director shall thereupon make an assessment of those contributions, served pursuant to Section 1206, noting upon the assessment that it is a jeopardy assessment levied under this section and the facts upon which the director finds that collection of contributions will be jeopardized by delay. The amount of the assessment shall be immediately delinquent, whether or not the time otherwise allowed by law or authorized regulations has expired. When applicable, the penalties provided in Sections 1126, 1127, and 1128, and interest under Section 1129, shall attach to the amount of the contributions specified in the jeopardy assessment. Penalties under Section 1135 shall apply if payment is not made, or security for payment is not provided, within 30 days of service of a jeopardy assessment.
In levying the assessment, the director may demand a deposit of such security as the director deems necessary to ensure compliance with this division, including additional security from time to time, but not more frequently than monthly, in the amount of accumulating interest. The deposit of sufficient security to ensure compliance shall stay other collection action by the director while the assessment is under review. The deposit of the sufficient security shall not be a condition for the exercise of the review and appeal rights of the employer pursuant to Sections 1221, 1222, 1223, and 1224. The filing of a petition for reassessment pursuant to Section 1221 shall not stay collection action by the director while the assessment is under review, but shall stay the sale of all property other than perishable goods seized by the director pursuant to the collection action until a final decision from a preliminary hearing pursuant to subdivision (b) of Section 1221 is issued by the administrative law judge or the board.
A jeopardy assessment may be made only upon a finding by the director, based upon probable cause, that any of the following conditions are met:
The employing unit is insolvent.
The employing unit has transferred, or is about to transfer, assets for less than fair market value, and by so doing has rendered, or is likely to render, itself insolvent.
The employing unit has been dissolved.
Any person liable for the employing unit’s contribution, or any owner, officer, director, partner, or other person having charge of the affairs of the employing unit has departed or is about to depart the State of California and that the departure is likely to deprive the director of a source of payment of the employing unit’s contribution.
Any person referred to in subdivision (d), or the employing unit, is secreting assets or is moving, placing, or depositing assets outside of the state for the purpose of interfering with the orderly collection of any contribution. The moving, placing, or depositing of assets outside of the state which constitutes a regular business practice and which does not in any way deplete the assets of the employing unit shall not be deemed to be interfering with the orderly collection of any contribution under this subdivision.
When an assessment for worker contributions that is made pursuant to the provisions of this article becomes final against a farm labor contractor, as defined in Section 1682 of the Labor Code, which is an employing unit, as defined in Section 135 of this code, or such farm labor contractor is otherwise delinquent in the payment of worker contributions, the department shall notify the Labor Commissioner, in writing, of the amount of the delinquency of such employing unit, and shall further notify the Labor Commissioner, in writing, when such delinquency is paid. The notice of assessment and the amount of any delinquency shall be admissible in evidence in any action or special proceeding arising out of the provisions of Chapter 3 (commencing with Section 1682) of Part 6 of Division 2 of the Labor Code.
The director shall notify the United States Internal Revenue Service and the United States Department of Labor of the failure of an Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) to pay within 90 days of the final date of an assessment any amounts assessed pursuant to the provisions of this article. If the assessment is subsequently paid by the Indian tribe, the director shall notify the United States Internal Revenue Service and the United States Department of Labor of the satisfaction of the liability.
If the director finds that any employer or any employee, officer, or agent of any employer, in submitting facts concerning the termination of a claimant’s employment pursuant to Section 1030, 1327, 3654, 3701, 4654, or 4701, willfully makes a false statement or representation or willfully fails to report a material fact concerning that termination, the director shall assess a penalty of an amount not less than 2 nor more than 10 times the weekly benefit amount of that claimant. The director shall assess this penalty in the following manner:
If the director finds that the employer was at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning that termination, the director shall assess the penalty against the employer.
If the director finds that the agent of the employer was at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning that termination, the director shall assess the penalty against the agent of the employer.
If the director finds that the employer and the agent of the employer were both at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning that termination, the director shall assess the penalty against the employer and also shall assess another penalty against the agent of the employer.
If the director finds that any employer or any employee, officer, or agent of any employer, in submitting a written statement concerning the reasonable assurance, as defined in subdivision (g) of Section 1253.3, of a claimant’s reemployment, as required by subdivisions (b), (c), and (i) of Section 1253.3, willfully makes a false statement or representation or willfully fails to report a material fact concerning the reasonable assurance of that reemployment, the director shall assess a penalty of an amount not less than 2 nor more than 10 times the weekly benefit amount of that claimant. The director shall assess this penalty in the following manner:
If the director finds that the employer was at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning the reasonable assurance of that reemployment, the director shall assess the penalty against the employer.
If the director finds that the agent of the employer was at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning the reasonable assurance of that reemployment, the director shall assess the penalty against the agent of the employer.
If the director finds that the employer and the agent of the employer were both at fault for willfully making a false statement or representation or willfully failing to report a material fact concerning the reasonable assurance of that reemployment, the director shall assess the penalty against the employer and also shall assess another penalty against the agent of the employer.
If the director finds that any employer or any employee, officer, or agent of any employer, in submitting facts concerning the termination of a claimant’s employment, where the claimant was performing services for an educational institution, as described in Section 1253.3, willfully makes a false statement or representation or willfully fails to report a material fact regarding any week during which the services were performed, as provided in Section 1253.3, or any time granted to the claimant for professional development during his or her employment with that employer, the director shall assess a penalty against the employer of that claimant in an amount not less than two, nor more than 10, times the weekly benefit amount of that claimant.
This article, Article 9 (commencing with Section 1176) of this chapter, with respect to refunds, and Chapter 7 (commencing with Section 1701) of this part, with respect to collections, shall apply to the assessments provided by this section. Penalties collected under this section shall be deposited in the Employment Development Department Contingent Fund.
If the director finds that any individual falsely certifies the medical condition of any person in order to obtain disability insurance benefits, including family temporary disability insurance benefits, with the intent to defraud, whether for the maker or for any other person, the director shall assess a penalty against the individual in the amount of 25 percent of the benefits paid as a result of the false certification. The provisions of this article, the provisions of Article 9 (commencing with Section 1176) with respect to refunds, and the provisions of Chapter 7 (commencing with Section 1701) with respect to collections shall apply to the assessments provided by this section. Penalties collected under this section shall be deposited in the contingent fund.
Any employer who induces, solicits, or coerces an employee to file a false or fraudulent claim for benefits shall be assessed a penalty in an amount equal to 100 percent of the liability established under Sections 1375 and 1375.1 against the employee. Amounts collected under this section shall be deposited in the fund from which the overpayment was made and as prescribed in Section 1375.1, in the following order of priority:
First to the fund from which the overpayment was made, up to the total amount of the benefit overpayment liability assessed against the employee under Section 1375.
Second to the Benefit Audit Fund, up to the total amount assessed against the employee under Section 1375.1.
The reserve account of any employer who is assessed under this section shall not be relieved of the charges for benefits related to the fraudulent claim.
If the director finds that a person or business entity knowingly advises another person or business entity to violate any provision of this chapter, the director may assess the greater of:
A penalty of five thousand dollars ($5,000).
Ten percent of the combined amount of any resulting underreporting of contribution, penalties, and interest required by law.
For purposes of this section, “business entity” means a partnership, corporation, association, limited liability company, or Indian tribe, as described in Section 3306(u) of Title 26 of the United States Code, or any other legal entity.
ARTICLE 8.6. Motor Carrier Employer Amnesty Program [1160. - 1164.]
The department shall collaborate with the Labor Commissioner to administer the Motor Carrier Employer Amnesty Program established by Section 2750.8 of the Labor Code and as provided by this article.
The definitions set forth in Section 2750.8 of the Labor Code shall apply to this article.
The department may promulgate regulations and take any other actions necessary or appropriate to implement this article and further its participation in the program.
ARTICLE 9. Refunds and Overpayments [1176. - 1185.]
If, by reason of an employee receiving wages from more than one employer during any calendar year, the wages received by him or her during such year exceed the remuneration upon which contributions are payable under Section 985, and the sum of the amount of tax imposed by Section 984 plus the amount of contributions under Section 3260 deducted from such wages exceeds the amount required under this division, the employee is entitled to a refund or credit of the amount of the excess.
Except as provided by subdivision (c) of this section, refunds and credits under Section 1176 shall be claimed pursuant to Section 17061 of the Revenue and Taxation Code on the personal income tax return of the claimant for the year in which the wages in excess of the applicable limitation are received. In no event shall the credit or refund be made unless the claim is made on a return filed within three years from the last day prescribed for filing the return, without regard to any extensions. The director shall transfer from the Disability Fund to the General Fund an amount equal to the amount of credits and refunds allowed by the Franchise Tax Board pursuant to Section 17061 of the Revenue and Taxation Code.
If the Franchise Tax Board disallows an individual’s claim filed pursuant to subdivision (a), he or she may file a protest and submit the claim to the director within 30 days of the date of mailing of the notice of disallowance by the Franchise Tax Board. An additional 30 days for the filing of the protest may for good cause be granted by the director.
If any individual is not required to file a personal income tax return for a year with the Franchise Tax Board, he or she may, within three years after the calendar year in which the wages in excess of the applicable limitation are received, file a claim for refund or credit under Section 1176 with the director.
The director shall make refunds from the Disability Fund if he or she allows a claim under this section. The provisions of Sections 1180, 1222, 1223, 1224, 1241, and 1242 shall apply whenever the director denies any claim for refund or credit under this section or affirms the disallowance of a claim for refund or credit by the Franchise Tax Board.
Except as provided by subdivision (b) of Section 1178, if the director determines that any amount of contributions, penalty or interest has been erroneously or illegally collected he shall set forth on the records of the department the amount collected in excess of the amount legally due and the name of the employing unit or other person by whom it was paid and shall refund the amount to the employing unit or other person by whom it was paid if the amount does not include refundable worker contributions. If refundable worker contributions are involved and a claim has not already been filed the director shall give notice to such employing unit or other person of such amount. The excess amount shall be credited on any amounts then due from or accrued against the employing unit and the balance shall be refunded to the employing unit or its successor, administrators or executors.
If the director determines that an overpayment has been made to the department by an employing unit or the School Employees Fund because of a reason specified in this subdivision, and the amount of the overpayment has been reimbursed to the state by the federal government pursuant to the federal Workforce Investment Act of 1998, then the director shall credit the employing unit or the School Employees Fund with the amount of that overpayment, provided that the director determines that the overpayment was made because of one of the following:
An employing unit paid unemployment insurance contributions after December 31, 1974, based on wages paid to individuals participating in a public service employment program under the federal Workforce Investment Act of 1998.
An employing unit paid amounts after December 31, 1975, pursuant to Section 803 of this part, for benefits awarded based on wages paid to individuals participating in a public service employment program under the federal Workforce Investment Act of 1998.
Payments were made by the School Employees Fund after December 31, 1975, to the Unemployment Fund pursuant to Section 821 of this part for benefits awarded based on wages paid to individuals participating in a public service employment program under the federal Workforce Investment Act of 1998.
No overpayment described in subdivision (a) shall be refunded to an employing unit or to the School Employees Fund.
No refund shall be made or credit allowed unless a claim therefor is filed with the director within three years from the last day of the calendar month following the close of the calendar quarter for which the overpayment was made or within six months after assessments made under Article 8 (commencing with Section 1126) of this chapter become final or within 60 days from the date of overpayment, whichever period expires the later, but prior to the expiration of such periods even though no claim is filed the director on his own initiative shall make refunds pursuant to Section 1177 or may allow credits.
No refund of employer or worker contributions, penalties or interest shall be made or credit for worker contributions allowed unless the employing unit conforms, within one year after the allowance of credit or approval of the claim for refund, to authorized regulations with respect to the refund to workers entitled thereto of any money deducted by the employing unit under Section 984.
Following a final decision denying a petition for reassessment pursuant to Article 11 (commencing with Section 1221), the employing unit or other person which was a party to the petition may file a claim for refund upon payment of the amount of the assessment, including interest and penalties, and thereafter may pursue all administrative and judicial review rights accorded in Article 11 (commencing with Section 1221) and Article 12 (commencing with Section 1241).
No refund of employer contributions paid pursuant to Section 976.5 shall be made unless the payment is made by an employer described in subdivision (c) of Section 976.5, or the amount paid is less than or exceeds the amount needed to change the employer’s contribution rate. Refunds permitted under this subdivision shall be considered an undesignated payment and allocated according to subdivision (b) of Section 1110.1.
Every claim for refund or credit shall be in writing and shall state the specific grounds upon which the claim is founded. A waiver of any demand against the state or the director on account of overpayment shall apply when any of the following occur:
Failure to file a claim with the director within the time prescribed by Section 1178.
Failure, after denial of a claim by the director, to file a petition for review with an administrative law judge within the time prescribed by Section 1222.
Failure to file an appeal from an adverse administrative law judge’s decision to the appeals board within the time prescribed by Section 1224.
If an employing unit pays the amount of contributions, penalties, and interest assessed under Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of this division:
Before an administrative law judge issues his decision upon a petition for reassessment filed on such assessment, the payment shall constitute the filing of a claim for refund, the claim for refund shall be deemed denied by the director, and the petition for reassessment shall automatically become a petition to review a denial of the claim for refund.
Before the appeals board issues its decision upon an appeal from the administrative law judge’s decision on a petition for reassessment, the payment shall constitute the filing of a claim for refund, the claim shall be deemed denied by the director, the denial shall be deemed affirmed by the administrative law judge, and the appeal shall automatically become an appeal from an administrative law judge’s decision upholding the director’s denial of the claim for refund.
The director shall give notice pursuant to Section 1206 to the claimant whenever he or she denies any claim for refund or credit in whole or in part.
No claim for refund of amounts paid pursuant to Section 1870 may be filed.
If the director finds that a claim for refund or credit or portion thereof, including a claim deemed made and denied pursuant to subdivision (a) of Section 1179.5, has been erroneously denied, he or she may reverse the denial of the claim or portion thereof in the following cases:
Where no petition for review of denial of the claim has been filed or deemed filed, if the reversal is made prior to the expiration of the period within which a petition for review may be filed under Section 1222.
Where a petition for review of denial of the claim is filed or deemed filed, if the reversal is made prior to the mailing of a decision by the administrative law judge.
The director shall give notice pursuant to Section 1206 of the reversal of an erroneous denial of a claim or portion thereof under this section. With respect to that portion of any such claim which remains denied by the director, the notice of reversal shall also constitute a notice of denial of such portion and Sections 1222, 1223, 1224, 1241, and 1242 shall apply.
Interest shall be allowed and paid only to the extent that interest and penalties collected under this division are available therefor upon any overpayment of contributions at the adjusted rate per month, or fraction thereof, established pursuant to Section 19521 of the Revenue and Taxation Code, from the date of overpayment to the date of the allowance of the refund or credit, but no interest shall be allowed if the director determines that any overpayment was made intentionally or by reason of negligence on the part of the employing unit.
If any refund or portion thereof is erroneously made, the director shall assess that amount to the employing unit or other person to whom the refund was made, together with any interest paid thereon, but no assessment shall be made with respect to any amount of worker contributions which the employer has refunded to his or her employees. The amount of the assessment shall bear interest at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code commencing 30 days after the service of notice of the assessment, if not paid within that period, until the date of repayment. The director shall give the employing unit against whom the assessment is made a written notice of the assessment pursuant to Section 1206.
The notice shall be given within three years from the date the refund was made unless the employing unit waives this limitation period or consents to its extension. Sections 1135, 1136, 1222, 1223, and 1224 shall apply to assessments made under this section. The director shall collect the amount of any assessment made under this section in the same manner that other assessments are collected.
The director, in collaboration with the Franchise Tax Board, shall do all of the following:
Identify taxpayers who have overpaid disability insurance contributions in any or all tax years from January 1, 1993, to December 31, 1995, inclusive, and have not received refunds due to them. For purposes of this subdivision, “taxpayers” means any individual who filed a FTB Form 540A or 540EZ.
By October 15, 1997, credit the taxpayers identified in this subdivision with the amount of any overpaid disability insurance pursuant to Section 17061 of the Revenue and Taxation Code. If the amount credited pursuant to this subdivision exceeds any amount then due from the taxpayer, the difference shall be refunded to the taxpayer. For taxable years 1993, 1994, and 1995, inclusive, interest, at the rate established pursuant to Section 19521 of the Revenue and Taxation Code, shall accrue from April 15 of the tax year following the overpayment to a date preceding the date of the refund warrant by not more than 30 days.
Identify and refund overpayments, with interest, to those taxpayers who have overpaid disability insurance contributions, and who have not claimed refunds due to them.
For purposes of Section 19340 of the Revenue and Taxation Code, any overpayment of disability insurance contributions shall be deemed to have been paid on the last day prescribed for filing the return under Article 1 (commencing with Section 18501) or Article 2 (commencing with Section 18601) of Chapter 2 of Part 10.2 of the Revenue and Taxation Code without regard to any extension of time for filing the return with respect to which the overpayment is allowable as a credit under Section 17061 of the Revenue and Taxation Code.
ARTICLE 10. Notice [1206. - 1206.]
A notice given under this chapter by the director, an administrative law judge, or the appeals board:
May be served personally or by mail, except that service by mail given by the director shall be made by certified mail in the following cases:
Under Section 1180 if the denial of claim for refund or credit is in excess of one thousand dollars ($1,000).
If served by mail, the notice shall be:
Addressed to the employing unit or person at his or her address as it appears on the records of the department.
Complete at the time of deposit in the United States mail.
Made pursuant to Section 1013 of the Code of Civil Procedure, excepting service of notice of a hearing before or an order or a decision of an administrative law judge or of the appeals board in transfer of reserve account, reassessment and refund matters.
May be served electronically or by a computerized service if service by certified mail is not required and the manner of service is agreed to by the recipient.
ARTICLE 11. Administrative Appellate Review [1221. - 1224.]
Within five days of receiving a petition for reassessment pursuant to subdivision (a), the board shall notify the employer of the date and time of a preliminary hearing to determine the reasonableness of levying the assessment pursuant to Section 1137. The preliminary hearing shall be held before an administrative law judge and scheduled not less than 10 nor more than 20 days from the filing of the petition for reassessment. The administrative law judge shall issue a decision within 10 days of the scheduled hearing date. The date scheduled for the preliminary hearing may be continued by the administrative law judge upon the request of the employer and the director.
The burden of proof on the issue of the reasonableness of levying the assessment pursuant to Section 1137 shall be on the director. In determining the reasonableness of levying the assessment pursuant to Section 1137 at the preliminary hearing, the administrative law judge shall consider and make findings on whether the director had probable cause under Section 1137.1 to levy the assessment pursuant to Section 1137. If the administrative law judge or the board, on appeal from an administrative law judge’s decision, decides that the assessment should not have been levied under Section 1137, the assessment shall automatically become, and shall have the effect of, an assessment pursuant to Section 1126 or 1127, whichever is applicable. If the administrative law judge or the board decides that the assessment was properly levied under Section 1137, this decision shall be incorporated in any decision rendered following the hearing pursuant to subdivision (d). The board shall expedite any appeal from an administrative law judge’s decision on a preliminary hearing.
Within 30 days of service of any notice of assessment or denial of claim for refund or credit under Section 803, 821, or 991, or of any notice under Sections 704.1, 1035, 1055, 1127.5, 1131, 1142, 1143, 1144, 1180, 1184, 1733, and 1735, any employing unit or other person given the notice, or any employing unit affected by a granting or denial of a transfer of reserve account, may file a petition for review or reassessment with an administrative law judge. The administrative law judge may for good cause grant an additional 30 days for the filing of a petition. If a petition for reassessment is not filed within the 30-day period, or within the additional period granted by the administrative law judge, an assessment is final at the expiration of the period. If a petition for review of a termination of elective coverage under Section 704.1 is not filed within the 30-day period, or within the additional period granted by the administrative law judge, the termination is final at the expiration of the period. If the director fails to serve notice of his or her action within 60 days after a claim for refund or credit is filed, the person or employing unit may consider the claim denied and file a petition with an administrative law judge.
If any petition is filed under this article within the time and meeting requirements prescribed, an administrative law judge shall review the matter and, if requested by the petitioner, shall grant a hearing. A hearing is not required on a petition if a prior hearing has been afforded the petitioner involving the same issues, but regardless of any prior proceedings, if the petitioner files an affidavit setting forth new and additional evidence in support of his or her petition, an administrative law judge may grant an additional hearing. The administrative law judge shall give at least 20 days’ notice of the time and place of the hearing on a petition by delivering or mailing the notice to the petitioner and to the director. The time of notice may be shortened with the consent of the parties. The administrative law judge shall render a decision in the matter and may decrease or increase the amount of any assessment under review. Every employing unit or person which is a party to the petition and the director shall be promptly notified of the administrative law judge’s decision, together with his or her reasons therefor.
The petitioner or the director may, within 30 days after the service of notice of an administrative law judge’s decision under this article, file an appeal to the appeals board. The appeals board may for good cause extend the appeal period. If the administrative law judge fails to serve notice of the decision on a petition for review of denial of a claim for refund or credit within 60 days after a petition is filed, the petitioner may consider the petition denied and file an appeal with the appeals board. If an appeal is not filed within the 30-day period or within the additional period granted by the appeals board:
The decision of the administrative law judge upon the petition is final in every case at the expiration of the period.
Any assessment involved is final at the expiration of the period except that in cases where a decision of the administrative law judge requires an adjustment of an assessment by granting a portion of a petition or by increasing an assessment, the assessment is final 30 days after service upon the petitioner by the director of a statement of amounts due setting forth the adjusted liability pursuant to the decision.
In the event of an appeal to the appeals board, it may decrease or increase the amount of any assessment involved. In cases where an order or decision of the appeals board requires an adjustment of an assessment by granting a portion of a petition or by increasing an assessment, the order or decision and the assessment become final 30 days after service upon the petitioner by the director of a statement of amounts due setting forth the adjusted liability pursuant to the order or decision of the appeals board. In all other cases, the order or decision of the appeals board and any assessment become final 30 days after service upon the petitioner of notice of the order or decision.
ARTICLE 11.5. Taxpayer’s Rights [1231. - 1237.]
The department shall develop and implement a taxpayer education and information program directed at, but not limited to, the following:
Taxpayer or industry groups.
Department audit and compliance staff.
Identifying forms, procedures, regulations, or laws that are confusing and lead to taxpayer errors.
Taking appropriate action, including recommending remedial legislation to change those items identified pursuant to subparagraph (A).
The education and information program described in subdivision (a) shall include all of the following:
Communication with the taxpayer or industry groups which explains in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
Participation in small business seminars and similar programs organized by state and local agencies and may include participation in seminars organized by private organizations.
In cooperation with the small business community, development of small business educational events and materials that explain, in simplified terms, the process of the department’s determination of whether an individual is an employee or an independent contractor. These events and materials shall be designed to address potential tax and labor law issues that may arise when small businesses contract with microbusinesses in the production and delivery of products and services.
Revision of taxpayer educational materials currently produced by the department to explain in simplified terms the most common errors made by taxpayers and how those errors may be avoided or corrected.
Implementation of a continuing education program for audit personnel to include the application of new legislation to taxpayer activities and to minimize recurrent taxpayer noncompliance or inconsistency of administration.
If an employing unit’s failure to make a timely return or payment is due to the person’s reasonable reliance on written advice from the department, the employing unit may be relieved of the taxes assessed, or any interest, additions to tax, or penalties added thereto, as follows:
Taxes or any interest, additions to tax, or penalties added thereto, shall only be relieved if the employing unit’s failure to make a timely return or payment was due to the employing unit’s reasonable reliance on the written advice of a ruling by the director or his or her designee, and only if the department itself finds all the conditions described in subdivision (b) are satisfied.
In the event that the employing unit relied on written advice of other than a ruling of the director or his or her designee, taxes shall not be relieved. Interest, additions to tax, or penalties may be waived if the department staff finds all the conditions described in subdivision (b) are satisfied.
For purposes of subdivision (a), relief shall be granted if all of the following conditions are satisfied:
The employing unit or the employing unit’s representative requested in writing that the department advise him or her whether a particular activity or transaction is subject to tax under the tax laws administered by the department, and the specific facts and circumstances of the employment relationship, activity, or transaction were fully described in the request.
The department responded in writing to the person regarding the written request for advice, stating whether or not the described employment relationship, activity, or transaction is subject to tax, or stating the conditions under which the activity or transaction is subject to tax.
In reasonable reliance on the department’s written advice, the person did not remit the tax due.
The liability for taxes applied to a particular activity or transaction that occurred before the department rescinded or modified the advice so given, by sending written notice to the person of the rescinded or modified advice.
The tax consequences expressed in the department’s written advice were not subsequently changed by any of the following:
A change in state or federal statutory law or case law.
A change in a federal administrative ruling or regulation where the department’s written advice was based on that federal administrative ruling or regulation.
A change in material facts or circumstances relating to the taxpayer.
Any person seeking relief under this section shall file with the department all of the following:
Only the person making the written request shall be entitled to rely on the department’s written advice to that person.
If written advice is issued pursuant to this section, it shall include a declaration that the tax consequences expressed in the advice may be subject to change for any of the reasons specified in paragraph (5) of subdivision (b) and that it is the duty of the requester to be aware of any of these possible changes.
This section shall not apply if the requester’s request for written advice pursuant to paragraph (1) of subdivision (b) contained a misrepresentation or omission of one or more material facts.
For purposes of subdivision (a), the department shall waive only that portion of tax, penalties, interest, or additions to tax attributable to the actions taken by the employing unit after receipt of the written advice of the department which were in reasonable reliance on the written advice.
When a request is made for a legal ruling, the request shall specifically so state. Director rulings shall be issued as provided in published guidelines. When a director ruling is issued, the ruling shall be signed by the director or his or her designee.
This section shall not apply to an employing unit that is a nonprofit organization or a governmental agency.
Notwithstanding any other provision of this section, no relief from unemployment insurance taxes imposed pursuant to Article 3 (commencing with Section 976) of Chapter 4 of Part 1, other than relief from interest and penalties, shall be granted pursuant to this section unless Section 1234, as enacted by the act enacting this section, becomes operative.
The director may approve a settlement of a civil employment tax matter in dispute involving a reduction of tax or penalties, or both, that does not exceed the amount specified in subparagraph (A) of paragraph (3). However, once an appeal of an employment tax matter dispute has been filed with the appeals board, the appeal has been assigned to an administrative law judge, and a notice of hearing has been issued, approval of the settlement by the assigned administrative law judge shall be obtained. If the decision of the administrative law judge has been appealed, approval of the appeals board shall be obtained. A proposed settlement shall be grounds for continuance of the scheduled hearing until the Attorney General has completed a review of the proposed settlement. “Civil employment tax matters in dispute” means those matters that are the subject of protests, appeals, or refund claims.
Except as provided by subparagraph (A) of paragraph (3), each proposed settlement shall be submitted to the Attorney General. Within 30 days of receiving that proposed settlement, the Attorney General shall review the recommendation and advise, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. If the Attorney General determines that the settlement is reasonable from an overall perspective, the director, and the administrative law judge or the appeals board, as applicable, may then determine if a settlement will be approved.
A settlement of any civil employment tax matter dispute involving a reduction of tax or penalties, or both, in settlement, the total of which reduction of tax or penalties, or both, in settlement does not exceed eleven thousand five hundred dollars ($11,500), may be approved by the director, and the administrative law judge or the appeals board, as applicable, without prior submission to the Attorney General.
On January 1 of each calendar year beginning on January 1, 2025, the Employment Development Department shall increase the amount specified in subparagraph (A). That adjustment shall be made as follows:
The Department of Industrial Relations shall transmit annually to the Employment Development Department the percentage change in the California Consumer Price Index, as modified for rental equivalent home ownership for all items, from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year.
The Employment Development Department shall then:
Compute the percentage change in the California Consumer Price Index from the later of June 2024 or June of the calendar year prior to the last increase in the amount specified in this subparagraph.
(II) Compute the inflation adjustment factor by adding 100 percent to the percentage change so computed, and converting the resulting percentage to the decimal equivalent.
(III) Multiply the amount specified in subparagraph (A) for the immediately preceding calendar year, as adjusted under this subparagraph, by the inflation adjustment factor determined in subclause (II), and round off the resulting product to the nearest one hundred dollars ($100).
The director may recommend to the appeals board a settlement of a civil employment tax matter dispute involving a reduction in tax or penalties, or both, exceeding the amount specified in subparagraph (A) of paragraph (3) of subdivision (a) and arising under Article 8 (commencing with Section 1126), Article 9 (commencing with Section 1176), or Article 11 (commencing with Section 1221). Each proposed settlement shall be submitted to the Attorney General in the same manner as described in subdivision (a).
Whenever a reduction of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved pursuant to this section, there shall be placed on file in the office of the director a public record with respect to that settlement. The public record shall include, but need not be limited to, all of the following information:
The name or names of the taxpayers who are parties to the settlement.
The total amount involved.
The amount payable or refundable pursuant to the settlement.
A summary of the reasons why the settlement is in the best interests of the state.
The Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective.
The public record shall not include any information that relates to any trade secret, patent, process, style of work, apparatus, business secret, or organizational structure that, if disclosed, would adversely affect the taxpayer or the national defense.
All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.
Any proceedings undertaken by the appeals board relating to a settlement as described in this section shall be conducted in a closed session or sessions. Except as provided in subdivision (c), any settlement entered into pursuant to this section shall constitute confidential tax information.
Any settlement of a civil employment tax matter arising out of a disagreement between the department and the employing unit on the status of a worker as an employee or an independent contractor may also include an agreement on the prospective classification of that worker and any worker similarly situated for employment tax purposes, except as provided in subdivision (g).
If a settlement includes a commitment on the prospective status of workers or reporting responsibilities of the employer, then the following shall apply:
The settlement shall not operate to deprive workers of their eligibility for unemployment, workers’ compensation, or disability insurance benefits.
The commitment concerning the status of workers or reporting responsibilities of the employer will terminate if there is a change in material facts, a change in an applicable statute, or a ruling by the appeals board on the workers or employer subject to the settlement that is contrary to the commitment.
For purposes of this section, settlement is defined as a compromise on the amount of the tax liability, consistent with the reasonable evaluation of the costs and risks associated with litigation of these matters.
The amendments to this section made in the 1997 portion of the 1997–98 Regular Session shall become operative January 1, 1998.
No business entity shall discharge or otherwise discriminate against any person because he or she has sought information from the department concerning his or her rights under this code or the Labor Code, cooperated with any investigation undertaken by the department, or has testified or is about to testify in any proceeding brought pursuant to this code or the Labor Code.
Any employee who believes that his or her rights under subdivision (a) have been violated may file a complaint with the Labor Commissioner, and with respect to that complaint shall be entitled to the same rights, remedies, and procedures as are applicable for a violation of Section 98.6 of the Labor Code.
ARTICLE 12. Judicial Review [1241. - 1243.]
No suit or proceeding shall be maintained in any court for the recovery of any amount of contributions, interest or penalties alleged to have been erroneously or illegally assessed or collected unless a claim for refund or credit has been filed pursuant to this chapter. Within 90 days after the service of the notice of the decision of the appeals board upon an appeal, the claimant may bring an action against the director on the grounds set forth in the claim in a court of competent jurisdiction in the County of Sacramento for the recovery of the whole or any part of the amount with respect to which the claim has been denied. The director may, in writing, extend for a period of not exceeding two years the time within which such action may be instituted if written request for such extension is filed with the director within the 90-day period. Failure to bring action within the time specified constitutes a waiver of any demand against the state on account of alleged overpayments. If the appeals board fails to serve notice of its decision on the appeal within 90 days after an appeal is filed, the claimant may consider the claim denied and may bring an action against the director under this section.
To the extent permitted by federal law, any entity or organization which has made a bona fide claim that it is a church or convention or association of churches, or an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches, may bring suit to challenge a decision of the appeals board denying an exemption as a church or religious organization by paying the amount of the last quarter assessed immediately preceding the initial appeals board decision denying the exemption and then making a claim for refund or credit pursuant to this section.
An entity or organization shall be deemed to have made a bona fide claim that it is a church or religious entity for purposes of this section if either of the following is established:
That it has been recognized as a church or religious organization by any entity of state or federal government.
That the appeals board found that the department has failed to show by a preponderance of the evidence admitted at the proceedings to determine tax liability that the petitioner has not made a bona fide claim of coverage under subdivision (a) as a church or religious entity.
A petition for writ of mandate shall lie to challenge any decision denying eligibility under subdivision (b), and shall not be deemed an action proscribed by or within the meaning of Section 32 of Article XIII of the California Constitution or Section 1851. The time within which to file any claim or action under subdivision (a) shall be extended during the pendency of any action brought pursuant to this subdivision.
If, in any action authorized by Section 1241, judgment is rendered for the plaintiff, the amount of the judgment shall first be credited on any contributions, interest, and penalties due from the plaintiff under this division, and the balance of the judgment shall be refunded to the plaintiff. In any such judgment, interest shall be allowed and paid only to the extent that interest and penalties collected under this division are available therefor, at the rate of 12 percent per annum upon the amount of contributions found to have been illegally collected from the date of the payment of the contributions to the date of the judgment.
A decision of the appeals board on an appeal from a denial of a protest under Section 1034 or on an appeal from a denial or granting of an application for transfer of reserve account under Article 5 (commencing with Section 1051) shall be subject to judicial review if an appropriate proceeding is filed by the employer within 90 days of the service of notice of the decision. The director may, in writing, extend for a period of not exceeding two years the time within which such proceeding may be instituted if written request for such extension is filed with the director within the 90-day period.
CHAPTER 5. Unemployment Compensation Benefits [1251. - 1384.]
ARTICLE 1. Eligibility and Disqualifications [1251. - 1265.9.]
Unemployment compensation benefits are payable from the Unemployment Fund to unemployed individuals who are eligible under this part.
An individual is “unemployed” in any week in which he or she meets any of the following conditions:
Any week during which he or she performs no services and with respect to which no wages are payable to him or her.
Any week of less than full-time work, if the wages payable to him or her with respect to the week, when reduced by twenty-five dollars ($25) or 25 percent of the wages payable, whichever is greater, do not equal or exceed his or her weekly benefit amount.
Any week during which he or she performs full-time work for five days as a juror, or as a witness under subpoena.
Authorized regulations shall be prescribed making such distinctions as may be necessary in the procedures applicable to unemployed individuals as to total unemployment, part-total employment, partial unemployment of individuals attached to their regular jobs, and other forms of short-time work.
For the purpose of this section only “wages” includes any and all compensation for personal services whether performed as an employee or as an independent contractor or as a juror or as a witness, but does not include any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.
With respect to individuals hired as commercial fishermen a “totally unemployed individual” means an individual who, during a particular week, while still attached to his employer from the standpoint that there did not occur any severance of the employer-employee relationship, earned no wages and performed no services because his employer’s boat was tied up for one or more of the following reasons:
Inclement weather.
Absence of fish in fishable waters.
Lack of orders for fish from buyers.
Boat is laid up for repairs.
With respect to individuals hired as commercial fishermen a “partially unemployed individual” means an individual who, during a particular week meets all of the following conditions:
Was employed by his or her regular employer in the act of catching or attempting to catch fish.
Was during the week continuously attached to his or her employer from the standpoint that there did not occur any severance of the employer-employee relationship.
Worked less than normal customary full-time hours or full number of days per week for his or her regular employer because of lack of full-time work, or
If normal customary full-time hours or full number of days per week are not determinable, he or she worked less than four (4) days during a payroll week for his or her regular employer because of lack of full-time work.
Earned wages which, when reduced by twenty-five dollars ($25) or 25 percent of the wages, whichever is greater, do not equal or exceed his or her weekly benefit amount.
An unemployed individual is eligible to receive unemployment compensation benefits with respect to any week only if the director finds that:
A claim for benefits with respect to that week has been made in accordance with authorized regulations.
He or she has registered for work, and thereafter continued to report, at a public employment office or any other place as the director may approve. Either or both of the requirements of this subdivision may be waived or altered by authorized regulation as to partially employed individuals attached to regular jobs.
He or she was able to work and available for work for that week.
He or she conducted a search for suitable work in accordance with specific and reasonable instructions of a public employment office.
He or she participated as required by the director in reemployment activities, such as orientation and assessment if the individual has been identified pursuant to an automated profiling system as likely to exhaust regular unemployment benefits unless the individual has shown good cause for failure to participate.
An unemployed individual who is in all respects otherwise eligible for unemployment compensation benefits shall not be deemed ineligible for any week in which, for not exceeding two working days, he cannot reasonably be expected to work because:
He is unlawfully detained.
He is lawfully detained or arrested, but the charge against such individual is subsequently dismissed.
Notwithstanding any other provision of this division, any determination made pursuant to subdivision (b) of this section may, if no appeal has been filed therefrom, be reconsidered by the department within 15 days from the date that the charge is dismissed. Notice of any reconsidered determination shall be given to the claimant and any employer or employing unit which received notice under Section 1328 or 1331, and the claimant or employer may appeal therefrom in the manner prescribed in Section 1328.
An unemployed individual who is in all respects otherwise eligible for unemployment compensation benefits, shall not be deemed ineligible for any week in which:
For not exceeding two working days, he or she cannot reasonably be expected to work because there has been a death in his or her immediate family in the state in which he or she resides.
For not exceeding four working days, he or she cannot reasonably be expected to work because there has been a death in his or her immediate family outside of the state in which he or she resides.
An unemployed individual who has been discharged from any branch of the United States armed services and who is in all respects otherwise eligible for unemployment compensation benefits shall not be deemed ineligible in any week for which he has unexpired leave time for which he has been compensated upon his discharge.
An unemployed individual who is in all respects otherwise eligible for unemployment compensation benefits shall not be deemed ineligible for any week in which pursuant to the provisions of a collective bargaining agreement he is allowed not more than one uncompensated day off in that week or is allowed not more than one uncompensated holiday on one day in that week if:
He is employed in longshoring operations;
His employer regularly offers employment to individuals employed in such operations seven days a week;
Notwithstanding any other provision of this division, unemployment compensation benefits, extended duration benefits, and federal-state extended benefits are payable on the basis of service to which Section 3309(a)(1) of the Internal Revenue Code of 1954 applies, in the same amount, on the same terms, and subject to the same conditions as benefits payable on the basis of other service subject to this division, except as provided by this section.
Benefits specified by subdivision (a) based on service performed in the employ of a nonprofit organization, or of any entity as defined by Section 605, with respect to service in an instructional, research, or principal administrative capacity for an educational institution are not payable to any individual with respect to any week which begins during the period between two successive academic years or terms or, when an agreement provides instead for a similar period between two regular but not successive terms, during that period, or during a period of paid sabbatical leave provided for in the individual’s contract, if the individual performs services in the first of the academic years or terms and if there is a contract or a reasonable assurance that the individual will perform services for any educational institution in the second of the academic years or terms.
Benefits specified by subdivision (a) based on service performed in the employ of a nonprofit organization, or of any entity as defined by Section 605, with respect to service in any other capacity than specified in subdivision (b) for an educational institution shall not be payable to any individual with respect to any week which commences during a period between two successive academic years or terms if the individual performs the service in the first of the academic years or terms and there is a reasonable assurance that the individual will perform the service in the second of the academic years or terms. However, if the individual was not offered an opportunity to perform the services for an educational institution for the second of the academic years or terms, the individual shall be entitled to a retroactive payment of benefits for each week for which the individual filed a timely claim for benefits and for which benefits were denied solely by reason of this subdivision. Retroactive benefits shall be claimed in accordance with the department’s procedures which shall specify that except where the individual was entitled to benefits based on services performed for other than an educational institution, an individual who has a reasonable assurance of reemployment may satisfy the search for work requirement of subdivision (e) of Section 1253, by registering for work pursuant to subdivision (b) of Section 1253 during the period between the first and second academic terms or years. A claim for retroactive benefits may be made no later than 30 days following the commencement of the second academic year or term.
Benefits specified by subdivision (a) based on service performed in the employ of a nonprofit organization, or of any entity as defined by Section 605, with respect to services specified by subdivision (b) or (c), are not payable to any individual with respect to any week that commences during an established and customary vacation period or holiday recess if the individual performs the services in the period immediately before the vacation period or holiday recess, and there is a reasonable assurance that the individual will perform the services in the period immediately following the vacation period or holiday recess.
With respect to any services specified by subdivision (b) or (c), compensation payable on the basis of services in that capacity may be denied as specified in subdivision (b), (c), or (d) to any individual who performed the services in an educational institution while in the employ of an educational service agency, and for this purpose the term “educational service agency” means a governmental agency or governmental entity that is established and operated exclusively for the purpose of providing the services to one or more educational institutions.
Benefits specified by subdivision (a) based on service performed in the employ of a nonprofit organization, or of any entity as defined by Section 605, are not payable during the periods of time, and subject to the same conditions, contained in subdivisions (b), (c), (d), and (h), if the services are provided to, or on behalf of, an educational institution.
For purposes of this section, “reasonable assurance” includes, but is not limited to, an offer of employment or assignment made by the educational institution, provided that the offer or assignment is not contingent on enrollment, funding, or program changes. An individual who has been notified that he or she will be replaced and does not have an offer of employment or assignment to perform services for an educational institution is not considered to have reasonable assurance.
For purposes of this section, if the time for service performed during the period of and pursuant to any contract for any academic year or term by an individual for any employing unit as specified in subdivision (b) or (c) constitutes one-half or more of the time in total service performed for the employing unit by the individual during that same period for remuneration, all the services of the individual for the employing unit for that period shall be deemed subject to the benefit payment restriction provisions of this section.
Any entity as defined by Section 605, with respect to any individual performing a service in any other capacity other than specified in subdivision (b) for an educational institution, shall provide a written statement indicating the following to the individual no later than 30 days before the end of the first of the academic years or terms:
Whether or not there is a reasonable assurance of reemployment.
Whether or not it is stated that the individual has no reasonable assurance of reemployment, that the individual should file a claim for benefits at the close of the academic year or term.
If it is stated that the individual has reasonable assurance of reemployment, the written statement shall also inform the employee that he or she may file a claim for benefits and that the determination for eligibility for benefits is made by the Employment Development Department and not by the employer.
If it is stated that the individual has reasonable assurance of reemployment, that the individual shall be entitled to a retroactive payment of benefits if the individual is not offered an opportunity to perform the services for the educational institution for the second of the academic years or terms, if the individual is otherwise eligible and he or she filed a claim for each week benefits are claimed, and if a claim for retroactive benefits is made no later than 30 days following the commencement of the second academic year or term.
Unemployment compensation benefits, extended duration benefits, and federal-state extended benefits shall not be payable to any individual on the basis of any services, substantially all of which consist of participating in sports or athletic events or training or preparing to so participate, for any week which commences during the period between two successive sport seasons, or similar periods, if such individual performed such services in the first of such seasons, or similar periods, and there is a reasonable assurance that such individual will perform such services in the later of such seasons, or similar periods.
Notwithstanding the provisions of subdivision (c) of Section 1253, if an individual is, in all other respects, eligible for benefits under this part, and such individual becomes unable to work due to a physical or mental illness or injury for one or more days during such week, he shall be paid unemployment compensation benefits at the rate of one-seventh the weekly benefit amount payable for that week for each day which he is available for work and able to work. The amount of benefits payable, if not a multiple of one dollar ($1), shall be computed to the next higher multiple of one dollar ($1). The individual shall not be entitled to unemployment compensation benefits for any day during such week which he is unable to work due to such physical or mental illness or injury.
For purposes of subdivision (c) of Section 1253, an unemployed individual who is in all respects otherwise eligible for unemployment compensation benefits, shall not be deemed to be not able to, or unavailable for, work for any week in which such person is not able to, or available for, work solely because such person is serving on a grand or petit jury, or is responding to a subpoena.
For the purposes of subdivision (e) of Section 1253, an individual shall not be disqualified for any week solely because of either of the following:
The individual is before any court of the United States or any state pursuant to a lawfully issued summons to appear for jury duty.
The individual is hospitalized for treatment of an emergency or life-threatening condition.
An unemployed individual shall not be disqualified for eligibility for unemployment compensation benefits solely on the basis that he or she is only available for part-time work. If an individual restricts his or her availability to part-time work, he or she may be considered to be able to work and available for work pursuant to subdivision (c) of Section 1253 if it is determined that all of following conditions exist:
The claim is based on the part-time employment.
The claimant is actively seeking and is willing to accept work under essentially the same conditions as existed while the wage credits were accrued.
The claimant imposes no other restrictions and is in a labor market in which a reasonable demand exists for the part-time services he or she offers.
An unemployed individual may not be disqualified for unemployment compensation benefits solely on the basis that he or she is a student. An unemployed individual may be considered to be able and available for work pursuant to subdivision (c) of Section 1253, if the school attendance does not eliminate a substantial portion of the individual’s full-time labor market availability. If an unemployed individual restricts his or her availability to part-time work due to school attendance, he or she may be considered to be able to work and available for work if he or she meets the criteria set forth in Section 1253.8.
An unemployed individual who meets all of the requirements under this division, including Section 1253.9, and certifies for continued unemployment compensation benefits shall not be scheduled for a determination of eligibility for a week in which the individual commenced or is participating in a training or education program and has notified the department of the training or education program.
If the department determines that the commencement of, or the ongoing participation in, a training or education program conflicts with the eligibility requirements for unemployment compensation under this division, the department may schedule and conduct a determination of eligibility.
No week shall be counted as a week of unemployment under subdivision (d) of Section 1253:
Unless it occurs within the benefit year which includes the week with respect to which he claims payment of unemployment compensation benefits, but this requirement shall not interrupt the payment of such benefits for consecutive weeks of unemployment. The week immediately preceding a benefit year, if part of one uninterrupted period of unemployment which continues into that benefit year shall be deemed, for the purposes of this section only, to be within such benefit year as well as within the preceding benefit year.
If unemployment compensation benefits have been paid with respect to that week.
An individual is not eligible for unemployment compensation benefits on account of unemployment for any week or part of any week with respect to which he has received or is seeking unemployment benefits under an unemployment compensation law of any other state or of the United States. If the appropriate agency of the other state or of the United States finally determines that he is not entitled to unemployment compensation benefits, this section shall not apply.
Except as provided by subdivisions (c) and (d), the amount of unemployment compensation benefits, extended duration benefits, and federal-state extended benefits payable to an individual for any week which begins after March 31, 1980, and which begins in a period with respect to which that individual is receiving a governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment which is based on the previous work of the individual shall be reduced, but not below zero, by an amount equal to the amount of the pension, retirement or retired pay, annuity, or other payment, which is reasonably attributable to that week.
Subdivision (a) shall be operative only during such time as Section 3304 of the Federal Unemployment Tax Act requires that state unemployment insurance laws contain those provisions as a condition of certification of state unemployment insurance laws by the Secretary of Labor.
Subdivision (a) shall apply to any pension, retirement or retired pay, annuity, or other similar periodic payment only if both of the following are met:
The pension, retirement or retired pay, annuity, or similar payment is under a plan maintained (or contributed to) by a base period or chargeable employer.
In the case of such a payment not made under the federal Social Security Act or the federal Railroad Retirement Act of 1974 (or the corresponding provisions of prior law), services performed for the employer by the individual after the beginning of the base period (or remuneration for such services) affect eligibility for, or increase the amount of, such pension, retirement or retired pay, annuity, or similar periodic payment.
The amendments made to subdivision (c) of this section during the 1985 portion of the 1985–86 Regular Session shall apply retroactively to all unemployment compensation benefits, extended duration benefits, and federal-state extended benefits, payable to an individual for any week which begins after November 1, 1980.
An individual is not eligible for unemployment compensation benefits or extended duration benefits for the same day or days of unemployment for which he is allowed by the Workmen’s Compensation Appeals Board, or for which he receives, benefits in the form of cash payments for temporary total disability indemnity, under a workmen’s compensation law, or employer’s liability law of this state, or of any other state, or of the federal government, except that if such cash payments are less than the amount he would otherwise receive as unemployment compensation benefits or extended duration benefits under this division, he shall be entitled to receive for such day or days, if otherwise eligible, unemployment compensation benefits or extended duration benefits reduced by the amount of such cash payments.
Notwithstanding any other provision of this division, an individual who is ineligible to receive unemployment compensation benefits or extended duration benefits under subdivision (a) of this section for one or more days of a week of unemployment and who is eligible to receive unemployment compensation benefits or extended duration benefits for the other days of that week is, with respect to that week, entitled to an amount of unemployment compensation benefits or extended duration benefits computed by reducing his weekly benefit amount by the amount of temporary total disability indemnity received for that week.
The amount determined under subdivision (a) or (b), if not a multiple of one dollar ($1), shall be computed to the next higher multiple of one dollar ($1).
The Department of Child Support Services shall notify the director whether an individual filing a claim for unemployment compensation after October 1, 1982, owes support obligations as defined under subdivision (h), and notify the department of any changes in the status of these individuals to ensure that the department has a current record.
The department shall maintain and keep current a record of individuals who owe support obligations and who may have claims for unemployment compensation benefits.
The department shall deduct and withhold support obligations as defined under subdivision (h) from any unemployment compensation payable to an individual who owes these obligations.
Any amount deducted and withheld under subdivision (c) shall be paid by the department to the appropriate county or to the Department of Child Support Services as the assigned payee, as stipulated by mutual agreement, in the interagency agreement between the department and the Department of Child Support Services.
Any amount deducted and withheld under subdivision (c) shall for all purposes be treated as if it were paid to the individual as unemployment compensation and paid by the individual to the Department of Child Support Services.
For purposes of subdivisions (a) to (e), inclusive, “unemployment compensation” means any compensation payable under this division, except Part 2 (commencing with Section 2601), but including amounts payable by the department pursuant to an agreement under any federal unemployment compensation law.
This section applies only if appropriate arrangements have been made for reimbursement by the Department of Child Support Services for the administrative costs incurred by the Employment Development Department.
For purposes of this section, “support obligations” means the child and related spousal support obligations which are being enforced pursuant to a plan described in Section 454 of the Social Security Act and as that section may hereafter be amended. However, to the extent “related spousal support obligations” may not be collected from unemployment compensation under federal law, those obligations shall not be included in the definition of support obligations under this section.
An individual is disqualified for unemployment compensation benefits if the director finds that he or she left his or her most recent work voluntarily without good cause or that he or she has been discharged for misconduct connected with his or her most recent work.
An individual is presumed to have been discharged for reasons other than misconduct in connection with his or her work and not to have voluntarily left his or her work without good cause unless his or her employer has given written notice to the contrary to the department as provided in Section 1327, setting forth facts sufficient to overcome the presumption. The presumption provided by this section is rebuttable.
An individual whose employment is terminated under the compulsory retirement provisions of a collective bargaining agreement to which the employer is a party, shall not be deemed to have left his or her work without good cause.
An individual may be deemed to have left his or her most recent work with good cause if he or she leaves employment to accompany his or her spouse or domestic partner to a place or to join him or her at a place from which it is impractical to commute to the employment. For purposes of this section “spouse” includes a person to whom marriage is imminent, and “domestic partner” includes a person to whom a domestic partnership, as described in Section 297 of the Family Code, is imminent.
An individual may be deemed to have left his or her most recent work with good cause if he or she leaves employment to protect his or her family, or himself or herself, from domestic violence abuse.
An individual shall be deemed to have left his or her most recent work with good cause if he or she elects to be laid off in place of an employee with less seniority pursuant to a provision in a collective bargaining agreement that provides that an employee with more seniority may elect to be laid off in place of an employee with less seniority when the employer has decided to lay off employees.
If the employment of an individual is terminated due to his absence from work for a period in excess of 24 hours because of his incarceration and he is convicted of the offense for which he was incarcerated or of any lesser included offense, he shall be deemed to have left his work voluntarily without good cause for the purposes of Section 1256. A plea or verdict of guilty, or a conviction following a plea of nolo contendere, is deemed to be a conviction within the meaning of this section irrespective of whether an order granting probation or other order is made suspending the imposition of the sentence or whether sentence is imposed but execution thereof is suspended.
Notwithstanding any other provision of this division, any determination made prior to a conviction or other final disposition of the criminal complaint or accusation by the court as to whether an individual who is terminated due to his absence from work because of incarceration voluntarily leaves without good cause may, if no appeal has been taken from the determination, for good cause be reconsidered by the department during the benefit year or extended duration period to which the determination relates. Notice of any reconsidered determination shall be given to the claimant and any employer or employing unit which received notice under Section 1328 or 1331, and the claimant or employer may appeal therefrom in the manner prescribed in Section 1328.
Except as otherwise provided in subdivision (b), an individual who terminates his or her employment shall not be deemed to have left his or her most recent work without good cause if his or her employer deprived the individual of equal employment opportunities on any basis listed in subdivision (a) of Section 12940 of the Government Code, as those bases are defined in Sections 12926 and 12926.1 of the Government Code.
Subdivision (a) does not apply to the following:
A deprivation of equal employment opportunities that is based upon a bona fide occupational qualification or applicable security regulations established by the United States or this state, specifically, as provided in Section 12940 of the Government Code.
An individual who fails to make reasonable efforts to provide the employer with an opportunity to remove any unintentional deprivation of the individual’s equal employment opportunities.
Prior to and nearest the date of filing a valid new, reopened, or additional claim for unemployment compensation benefits, a valid primary, reopened, or additional claim for extended duration benefits, or a valid application, or reopened or additional claim for federal-state extended benefits.
During the calendar week for which a continued claim is filed.
An individual is disqualified for unemployment compensation benefits if either of the following occur:
The director finds that he or she was discharged from his or her most recent work for chronic absenteeism due to intoxication or reporting to work while intoxicated or using intoxicants on the job, or gross neglect of duty while intoxicated, when any of these incidents is caused by an irresistible compulsion to use or consume intoxicants, including alcoholic beverages.
He or she otherwise left his or her most recent employment for reasons caused by an irresistible compulsion to use or consume intoxicants, including alcoholic beverages.
An individual disqualified under this section, under a determination transmitted to him or her by the department, is ineligible to receive unemployment compensation benefits under this part for the week in which the separation occurs, and continuing until he or she has performed service in bona fide employment for which remuneration is received equal to or in excess of five times his or her weekly benefit amount, or until a physician or authorized treatment program administrator certifies that the individual has entered into and is continuing in, or has completed, a treatment program for his or her condition and is able to return to employment.
The department shall advise each individual disqualified under this section of the benefits available under Part 2 (commencing with Section 2601), and, if assistance in locating an appropriate treatment program is requested, refer the individual to the appropriate county drug or alcohol program administrator.
An individual shall be deemed to have left his or her most recent work with good cause if the director finds that he or she leaves employment because of sexual harassment if the individual has taken reasonable steps to preserve the working relationship. No steps shall be required if the director finds it would have been futile. For purposes of this subdivision, unwelcome sexual advances, requests for sexual favors, and other verbal, visual, or physical conduct of a sexual nature constitutes sexual harassment when any of the following occur:
Submission to the conduct is made either explicitly or implicitly a term or condition of an individual’s employment.
Submission to or rejection of the conduct by an individual is used as the basis for employment decisions affecting the individual.
The conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.
Findings of fact and law by the director shall not collaterally estop adjudication of the issue of sexual harassment in another forum.
An individual is also disqualified for unemployment compensation benefits if:
He or she willfully, for the purpose of obtaining unemployment compensation benefits, either made a false statement or representation, including, but not limited to, using a false name, false social security number, or other false identification, with actual knowledge of the falsity thereof, or withheld a material fact in order to obtain any unemployment compensation benefits under this division.
He or she, without good cause, refused to accept suitable employment when offered to him or her, or failed to apply for suitable employment when notified by a public employment office.
“Suitable employment” means work in the individual’s usual occupation or for which he is reasonably fitted, regardless of whether or not it is subject to this division.
In determining whether the work is work for which the individual is reasonably fitted, the director shall consider the degree of risk involved to the individual’s health, safety, and morals, his physical fitness and prior training, his experience and prior earnings, his length of unemployment and prospects for securing local work in his customary occupation, and the distance of the available work from his residence, and such other factors as would influence a reasonably prudent person in the individual’s circumstances.
“Suitable employment” does not include employment with an employer who does not:
Possess an appropriate state license to engage in his business, trade, or profession; or
Carry either workers’ compensation insurance or possess a certificate of self-insurance as required by Division 4 (commencing with Section 3201) of the Labor Code.
Notwithstanding any other provisions of this division, no work or employment shall be deemed suitable and benefits shall not be denied to any otherwise eligible and qualified individual for refusing new work under any of the following conditions:
If the position offered is vacant due directly to a strike, lockout, or other labor dispute.
If the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.
If, as a condition of being employed, the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.
If the offer of employment is from an employer who does not possess an appropriate state license to engage in his business, trade, or profession if required by state law.
If the offer of employment is from an employer who does not carry either workmen’s compensation insurance or possess a certificate of self-insurance as required by Division 4 (commencing with Section 3201) of the Labor Code.
If the offer of employment is from an employer who does not withhold or hold in trust the employee contributions required by Part 2 (commencing with Section 2601) of this division for unemployment compensation disability benefits and does not transmit all such employee contributions to the department for the Disability Fund as required by Section 986.
An individual disqualified under Section 1256, under a determination transmitted to the individual by the department, is ineligible to receive unemployment compensation benefits for the week in which the act that causes the disqualification occurs and continuing until they have, subsequent to the act that causes disqualification and their registration for work, performed service in bona fide employment for which remuneration is received equal to or in excess of five times their weekly benefit amount.
An individual disqualified under subdivision (b) of Section 1257, under a determination transmitted to the individual by the department, is ineligible to receive unemployment compensation benefits for not less than 2 and no more than 10 consecutive weeks beginning with:
The week in which the cause of the disqualification occurs, if the individual registers for work in that week.
The week subsequent to the occurrence of the cause of the individual’s disqualification in which they first register for work, if they do not register for work in the week in which the cause of their disqualification occurs.
An individual disqualified under subdivision (a) of Section 1257, under a determination transmitted to the individual by the department, and who was not paid any benefit amount as a result of their false statement or representation, is ineligible to receive unemployment compensation benefits for two weeks commencing with the week in which the determination is served upon them, or any subsequent week, for which they are first otherwise in all respects eligible for unemployment compensation benefits and for not more than 13 subsequent weeks for which they are otherwise in all respects eligible for unemployment compensation benefits. No disqualification under this subdivision shall be applied to any week if all or any portion of the week is beyond the three-year period next succeeding the date of the service of the determination. This subdivision shall not apply to an individual convicted under Section 2101.
An individual disqualified under subdivision (a) of Section 1257, under a determination transmitted to the individual by the department, and who was paid any benefit amount as a result of their false statement or representation, is ineligible to receive unemployment compensation benefits for five weeks commencing with the week in which the determination is served upon them, or any subsequent week, for which they are first otherwise in all respects eligible for unemployment compensation benefits and for not more than 10 subsequent weeks for which they are otherwise in all respects eligible for unemployment compensation benefits. No disqualification under this subdivision shall be applied to any week if all or any portion of the week is beyond the three-year period next succeeding the date of the service of the determination. This subdivision shall not apply to an individual convicted under Section 2101.
Notwithstanding subdivision (c) or (d), an individual who is subject to a disqualification that is imposed under subdivision (b) of Section 1257 may, if they are otherwise in all respects eligible for unemployment compensation benefits, concurrently serve a disqualification imposed under subdivision (a) of Section 1257.
Prior to disqualifying an individual pursuant to subdivision (a) of Section 1257 and subjecting that individual to the period of ineligibility described in subdivision (c) or (d), the department shall do all of the following:
Provide notice to the individual of the proposed determination. This notice may be combined with other notices from the department, which may include, but are not limited to, notifications of potential overpayments and of eligibility interviews.
The notice shall state the eligibility provision related to the false statement or misrepresentation on which the department is determining whether to disqualify the individual pursuant to subdivision (a) of Section 1257.
The notice shall state the individual’s right to respond to the notice pursuant to paragraph (2).
Provide the individual with a period of not less than 10 days, or 3 days for individuals who opt into electronic communications, to respond by telephone or in writing to the proposed determination of ineligibility pursuant to subdivision (a) of Section 1257 by explaining any alleged false or withheld facts, statements, or representations.
After an individual has responded to the allegations or after 10 or 3 days, as applicable, if the individual fails to respond, the department may issue a final notice of determination to an individual. That notice shall contain all of the following:
The number of weeks for which the individual is ineligible for benefits pursuant to subdivision (c) or (d).
The eligibility provision related to the false statement or misrepresentation that serves as the basis for the department’s disqualification of the individual pursuant to subdivision (a) of Section 1257.
The individual’s right to appeal the determination as described in paragraph (4).
The individual may appeal the determination to an administrative law judge within 30 days from service of the notice of determination. The 30-day period may be extended by the administrative law judge for good cause, including, but not be limited to, mistake, inadvertence, surprise, or excusable neglect. The director shall be an interested party to any appeal.
The department shall implement this subdivision upon completing any necessary technical changes to fulfill the requirements of this subdivision or by September 1, 2022, whichever is earlier.
Notwithstanding any other provision of this division, benefits shall not be denied to any individual by reason of cancellation of wage credits or total reduction of his benefit rights for any cause other than discharge for misconduct connected with his work, fraud in connection with a claim for benefits, or receipt of disqualifying income. This section shall not be construed to authorize cancellation of wage credits or total reduction of benefit rights for any cause whatsoever, nor shall it limit or affect any other section that provides for cancellation of wage credits or total reduction of benefit rights for any cause permitted under this section.
When successive disqualifications under Section 1257 occur, the director may extend the period of ineligibility provided for in Section 1260 for an additional period not to exceed eight additional weeks. With regard to successive disqualifications pursuant to subdivision (a) of Section 1257, the department is required to have complied with subdivision (f) of Section 1260 for each successive disqualification.
An individual is not eligible for unemployment compensation benefits, and these benefits shall not be payable to him or her, if the individual left his or her work because of a trade dispute. The individual shall remain ineligible for the period during which he or she continues out of work by reason of the fact that the trade dispute is still in active progress in the establishment in which he or she was employed.
Whenever the department learns that a trade dispute is in progress, the department shall promptly conduct an investigation and make investigation findings as to the nature, location, labor organizations and employers involved, and other relevant facts concerning the trade dispute as it deems necessary. The department shall provide its findings to its field offices in locations affected by the trade dispute, and shall, upon request, make its findings available to any employer, employers’ association or labor organization involved in the trade dispute. The department’s investigation findings shall be based upon the information then available to it and shall not be a determination as to the eligibility of any claimant for benefits under Section 1262.
Any individual convicted under Section 2101 by any court of competent jurisdiction of willfully making a false statement or knowingly failing to disclose a material fact to obtain or increase any benefit or payment under this division shall forfeit any rights to benefits for the week in which the criminal complaint was filed and for the 51 consecutive calendar weeks which immediately follow that week, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code allowing the individual to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty or dismissing the criminal complaint, but a forfeiture of benefits under this subdivision shall extend no later than the effective date of any order under Section 1203.4 of the Penal Code, and, if the period of forfeiture has not previously expired, the forfeiture of benefits under this subdivision shall terminate as of the effective date of any such order.
Any individual convicted under Section 2101 by any court of competent jurisdiction of willfully making a false statement or knowingly failing to disclose a material fact to obtain or increase any benefit or payment under this part, Part 3 (commencing with Section 3501), or Part 4 (commencing with Section 4001) shall, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code allowing the individual to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty or dismissing the criminal complaint, be ineligible to receive unemployment compensation or extended duration benefits or federal-state extended benefits for the week in which the criminal complaint was filed, or any subsequent week, for which he or she is first otherwise in all respects eligible for unemployment compensation or extended duration benefits or federal-state extended benefits and for 14 subsequent weeks for which he or she is otherwise in all respects eligible for unemployment compensation or extended duration benefits or federal-state extended benefits. No disqualification under this subdivision shall be applied to any week if all or any portion of the week is beyond the three-year period next succeeding the date of the filing of the criminal complaint.
The department shall, effective upon the date of the filing of a criminal complaint against an individual prosecuted under Section 2101, suspend the payment of benefits to the individual.
A plea or verdict of guilty, or a conviction following a plea of nolo contendere, is deemed to be a conviction within the meaning of this section irrespective of whether an order granting probation or other order is made suspending the imposition of the sentence or whether sentence is imposed but execution thereof is suspended.
Notwithstanding the provisions of this section, an individual may during a period of forfeiture under subdivision (a) of this section meet the conditions to remove any disqualification that is imposed under Sections 1260 or 1261, or subdivision (b) of this section, but no week during the period of forfeiture shall be used to offset the amount of any overpayment.
Unemployment compensation benefits, extended duration benefits, and federal-state extended benefits shall not be payable on the basis of services performed by a person who is not a citizen or national of the United States, unless that person is an individual who was lawfully admitted for permanent residence at the time the services were performed, was lawfully present for purposes of performing the services, or was permanently residing in the United States under color of law at the time the services were performed, including a person who was lawfully present in the United States as a result of the application of the provisions of Section 203(a)(7) or Section 212(d)(5) of the Immigration and Nationality Act.
For purposes of paragraph (1), and only to the extent authorized by federal law, a person who (A) is the subject of a notice of decision from the federal government granting deferred action under the federal Deferred Action for Childhood Arrivals program announced by the United States Secretary of Homeland Security on June 15, 2012, and (B) performed the services while in receipt of a valid employment authorization from the federal government, is a person who was lawfully present for purposes of performing those services.
Any data or information required of individuals applying for benefits specified by subdivision (a) to determine whether these benefits are not payable to them because of their federal immigration status shall be uniformly required from all applicants for these benefits.
In the case of an individual whose application for benefits specified by subdivision (a) would otherwise be approved, no determination by the department, an administrative law judge, or the appeals board that these benefits to the individual are not payable because of the individual’s federal immigration status shall be made except upon a preponderance of the evidence.
If a person who is not a citizen or national of the United States presents evidence that the Immigration and Naturalization Service has granted the person employment authorization as a result of an application for temporary residence status under the federal Immigration Reform and Control Act of 1986 (Public Law 99-603), pending a final determination on this application the department shall not do either of the following:
Commence or continue to pursue any administrative or judicial action to collect benefits where there has been a final determination that these benefits have been overpaid or chargeable to the person, because of the person’s immigration status at the time they performed the services compensated by their base period wages.
Determine that the person was overpaid benefits in the current benefit year or in any prior benefit year, if the basis for the determination is the assumption that because the person is an applicant for temporary resident status they were not, while performing the services compensated by base period wages, lawfully admitted for permanent residence, lawfully present for purposes of performing the services that were compensated by their base period wages, or permanently residing in the United States under color of law.
If the Immigration and Naturalization Service grants the application and adjusts the person’s status to that of lawful temporary resident, the department shall not take any action described in paragraph (1) of subdivision (d) or make any determination described in paragraph (2) of subdivision (d). If a person is not lawfully admitted for permanent residence, lawfully present for the purpose of performing the services compensated by their base period wages, or permanently residing in the United States under color of law, at the time the person’s lawful temporary permanent status terminates, then compensation shall not be payable on the basis of services performed by the person after the termination.
Nothing in subdivision (d) shall be construed to require the department to do any of the following:
Repay any amounts collected under any present or past action as described in paragraph (1) of subdivision (d).
Redetermine the eligibility for unemployment compensation benefits of any person who the department originally determined to be ineligible because of the person’s federal immigration status at the time they performed the services compensated by their base period wages and with respect to whom the determination has become final.
Apply subdivision (d) or (e) retroactively.
If the United States Secretary of Labor finds that subdivisions (d) and (e) are not in conformity with the federal Unemployment Tax Act, and effective as of the date that this finding becomes final, subdivisions (d), (e), and (f) shall be inoperative and of no legal force or effect.
Unless subdivisions (d), (e), and (f) have earlier become inoperative and of no legal force or effect pursuant to a finding by the Secretary of Labor under subdivision (g), subdivisions (d), (e), (f), and (g) shall remain in effect only until September 30, 1990, and as of that date shall become inoperative, unless a later enacted statute which is chaptered before September 30, 1990, deletes or extends that date. Notwithstanding this subdivision, however, the department shall not take any action to collect benefits from an individual when the collection against that individual was suspended pursuant to subdivision (e) prior to September 30, 1990.
Notwithstanding any other provisions of this division, payments to an individual under a plan or system established by an employer which makes provisions for his employees generally, or for a class or group of his employees, for the purpose of supplementing unemployment compensation benefits shall not be construed to be wages or compensation for personal services under this division and benefits payable under this division shall not be denied or reduced because of the receipt of payments under such arrangements or plans.
This amendment is hereby declared to be merely a clarification of the original intention of the Legislature and is not a substantive change, and is in conformity with the existing administrative interpretation of the law.
Notwithstanding any other provision of this division, payments to an individual by an employer who has failed to provide the advance notice of facility closure required by the federal Worker Adjustment and Retraining Notification (WARN) Act (29 U.S.C. Sec. 2101 et seq.) or Chapter 4 (commencing with Section 1400) of Part 4 of Division 2 of the Labor Code may not be construed to be wages or compensation for personal services under this division.
Benefits payable under this division may not be denied or reduced because of the receipt of payments related in any way to an employer’s violation of the WARN Act or Chapter 4 (commencing with Section 1400) of Part 4 of Division 2 of the Labor Code.
Notwithstanding any other provision of this division, payments to an individual for vacation pay which was earned but not paid for services performed prior to termination of employment shall not be construed to be wages or compensation for personal services under this division and benefits payable under this division shall not be denied or reduced because of the receipt of these payments.
Notwithstanding any other provision of this division, payments to an individual for holiday pay for any holiday occurring in a week during which the individual was unemployed shall be deemed wages received for the week in which the individual returns to work, if holiday pay is not paid until the individual returns to work from a definite period of layoff. Payments to an individual for holiday pay for any holiday occurring in a week during which the individual was unemployed shall be deemed wages received for the week in which the holiday falls, if holiday pay is paid prior to the individual’s return to work from a definite period of layoff.
However, payments to an individual for holiday pay which was earned but not paid prior to an indefinite layoff, or termination of employment, or commencement of unemployment caused by disability, as the case may be, shall not be construed to be wages or compensation for personal services under this division and benefits payable under this division shall not be denied or reduced because of the receipt of these payments.
Notwithstanding any other provision of this division, payments to an individual for sick pay which was earned but not paid for services performed prior to termination of employment, shall not be construed to be wages or compensation for personal services under this division and benefits payable under this division shall not be denied or reduced because of the receipt of such payments.
Notwithstanding any other provision of this division, payments for severance pay or terminal pay to an individual who is terminated from his or her employment as a direct result of the expansion of a federal redwood park in northern California by reason of legislation enacted by Congress in 1977 or 1978, shall not be construed to be wages or compensation for personal services under this division, and benefits payable under this division shall not be denied or reduced because of the receipt of such payment.
ARTICLE 1.5. California Training Benefits Program [1266. - 1274.20.]
This article shall be known, and may be cited, as the California Training Benefits Program.
Experience has shown that the ability of a large number of the population of California to compete for jobs in the labor market is impaired by advancement in technological improvements, the widespread effects of automation and relocation in our economy, and foreign competition as set forth in petitions certified under the federal Trade Act of 1974, as amended (Title 19, United States Code, Sections 2101 et seq.). The Legislature finds that many individuals in California are lacking in skills that would make them competitive in the labor market. They are in need of training or retraining to upgrade their skills required in demand occupations. It is the policy of this state to assist these individuals by providing unemployment compensation benefits, extended duration benefits, and other federally funded unemployment compensation benefits, including those available under the federal Trade Act of 1974 (Public Law 93-618), as amended by the federal Trade Act of 2002 (Public Law 107-210), during a period of retraining to qualify them for jobs in demand occupations and thus avoid long-term unemployment.
Notwithstanding any other provision of this division, with respect to an unemployed individual otherwise eligible for benefits, those benefits shall not be denied to an individual for any week because he or she is in eligible training or retraining, as described in Section 1269 or 1269.1, or because of the application to any such week in training or retraining of any law of this state relating to availability for work, active search for work, refusal to accept work, or for leaving his or her most recent work, if continuing the most recent work would require the individual to terminate his or her training or retraining course of instruction. The individual is considered to be in training or retraining during regularly scheduled vacation or recess periods, such as Christmas and Thanksgiving holidays, or semester breaks, but not during a summer vacation period. As used in this article, “individual” includes an exhaustee as defined in Section 3503, and any individual claiming federal-state extended benefits under Part 4 (commencing with Section 4001), and anyone receiving federally funded unemployment compensation benefits.
An unemployed individual who files a claim for unemployment compensation benefits or extended duration benefits, or an application for federal-state extended benefits or any federally funded unemployment compensation benefits, may apply to the department for a determination of potential eligibility for benefits during a period of training or retraining.
A determination of automatic eligibility for benefits under this article shall be issued to an unemployed individual if the director finds that any of the following applies:
The training is authorized by the federal Workforce Innovation and Opportunity Act (Public Law 113-128) or by the Employment Training Panel established pursuant to Chapter 3.5 (commencing with Section 10200) of Part 1 of Division 3.
The training is authorized by the federal Trade Act of 1974 (19 U.S.C. Sec. 2101 et seq.), as amended, pursuant to a certified petition.
The individual is a participant in the California Work Opportunity and Responsibility to Kids (CalWORKs) program pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code, and has entered into a contract with the county welfare department to participate in an education or training program.
The individual is a participant in training with a provider that is certified and on the state’s Eligible Training Provider List (ETPL), as authorized by the federal Workforce Innovation and Opportunity Act (Public Law 113-128), or the individual is a permanent or probationary public school teacher who is a participant in a credential preparation program or training program approved or accredited by the Commission on Teacher Credentialing for additional certification in math, science, or special education, for kindergarten and grades 1 to 12, inclusive, and was laid off. The credential preparation program or training program shall only be approved if a permanent or probationary public school teacher enrolls in the training within three years of being laid off from the public school employer.
The changes made to this subdivision by Chapter 278 of the Statutes of 2012, shall become operative on January 1, 2014.
The individual is a journey level member of a union or trade association, or is a participant in training sponsored by an employer, and the training or retraining course of instruction is industry-related training necessary due to changes in technology, or industry demands, or is necessary to retain employment or to become more competitive in obtaining employment, or the individual is a participant in a state or federally approved apprenticeship program.
If the training is not authorized under Section 1269, a determination of potential eligibility for benefits under this article shall be issued to an unemployed individual if the director finds that all of the following apply:
The individual has been unemployed for four or more continuous weeks, or the individual is unemployed and unlikely to return to his or her most recent workplace because work opportunities in the individual’s job classification are impaired by a plant closure or a substantial reduction in employment at the individual’s most recent workplace, by advancement in technological improvements, by the effects of automation and relocation in the economy, or because of mental or physical disability that prohibits the individual from utilizing existing occupational skills.
One of the substantial causes of the individual’s unemployment is a lack of sufficient current demand in the individual’s labor market area for the occupational skills for which the individual is fitted by training and experience or current physical or mental capacity, and that the lack of employment opportunities is expected to continue for an extended period of time, or, if the individual’s occupation is one for which there is a seasonal variation in demand in the labor market and the individual has no other skill for which there is current demand.
The training or retraining course of instruction relates to an occupation or skill for which there are, or are expected to be in the immediate future, reasonable employment opportunities in the labor market area in this state in which the individual intends to seek work and there is not a substantial surplus of workers with requisite skills in the occupation in that area.
The training or retraining course of instruction is one approved by the director and can be completed within a reasonable period of time.
The training or retraining course is a full-time course prescribed for the primary purpose of training the applicant in skills that will allow him or her to obtain employment in a demand occupation.
The individual can be reasonably expected to complete the training or retraining successfully.
The beginning date of training is more than three years after the beginning date of training last approved for the individual under this subdivision.
If a determination of potential eligibility for benefits is issued under this section, except under subdivision (c), and when federal extended unemployment insurance benefits are in effect, the director may find that an unemployed individual is eligible for training benefits if the individual is enrolled in a community college or other accredited postsecondary education program with the purpose of preparing the applicant in academic or job skills, including remedial training, that will increase employment opportunities or that leads to an industry-recognized credential or certificate designed for a specific occupation. If an individual is approved for training benefits under this subdivision and the federal extended unemployment insurance benefits are subsequently no longer in effect, the individual shall remain eligible as long as he or she is attending the training and is meeting the provisions of this article.
For purposes of this section, the following terms have the following meanings:
“Accredited” means an institution recognized or approved by an accrediting agency recognized by the United States Department of Education.
“Accrediting agency” is an agency recognized by the United States Department of Education.
As used in this article:
“Demand occupation” means an occupation in a labor market area in which the director determines work opportunities are available and there is not a surplus of qualified applicants.
“Labor market area” means a county, or aggregation of counties designated by the department that meets criteria of population, population density, commute patterns, and social and economic integration specified by the department.
Any unemployed individual receiving unemployment compensation benefits payable under this division, who applies for a determination of potential eligibility for benefits under this article no later than the 16th week of his or her receiving these benefits, and is determined eligible for benefits under this article, is entitled to a training extension on his or her unemployment compensation claim, if necessary, to complete approved training.
The training extension shall provide the claimant with a maximum of 52 times the weekly benefit of the parent unemployment compensation claim, which shall be reduced by all of the following:
The maximum benefit award on the parent unemployment compensation claim.
Benefits payable during the period of approved training on any other unemployment compensation claim filed pursuant to this chapter, to the extent permitted by law.
Benefits payable during the period of approved training under any state or federal unemployment compensation law, to the extent permitted by state or federal law, including, but not limited to, all of the following:
Extended unemployment compensation benefits payable under Part 3 (commencing with Section 3501).
Federal-state extended compensation benefits payable under Part 4 (commencing with Section 4001).
Trade readjustment allowance benefits payable under the federal Trade Act of 1974 (19 U.S.C. Sec. 2101 et seq.), as amended.
The parent unemployment compensation claim shall be the unemployment compensation claim in existence at the time the claimant is determined eligible for benefits pursuant to subdivision (a).
Benefits payable under this section are subject to the following limitations:
The department shall inform all individuals who claim unemployment compensation benefits in this state of the benefits potentially available under this article and Section 1271. The department shall convey this information verbally, in written form, or online. If in written form, the department may utilize publications or handbooks that inform individuals of their rights and duties in regard to unemployment compensation benefits. These publications, issued by the department pursuant to authorized regulations, may be used to satisfy the requirements of this section. Information required by this section shall be made available on the department’s Internet Web site in close proximity to information on unemployment compensation claim forms.
Benefits paid under Section 1271 shall be charged to individual employer reserve accounts, consistent with the provisions of this code.
Notwithstanding subdivision (c) of Section 1253, an unemployed individual who is able to work is eligible to receive benefits under this article with respect to any week during a period of training or retraining only if the director finds both of the following:
He or she submits a certification, as prescribed by the Employment Development Department through regulations, certifying that he or she is enrolled in and satisfactorily pursuing the training or retraining course of instruction.
If an individual fails to submit for any week during a period of training or retraining the certification required by Section 1272, he or she shall be ineligible to receive any benefits for that week. This section shall not render an individual ineligible for benefits for any week during the period of training or retraining if on or before Monday of that week he or she notifies the department that his or her training or retraining course of instruction has been or is being discontinued or terminated prior to that week.
The director may publish a list of high demand occupations in each labor market area of this state. If a demand occupation is limited to a particular industry, the director may identify the industry of the demand occupation.
Not later than September 1, 2016, the department shall prepare and submit to the Governor and the Legislature a report evaluating the effectiveness of the California Training Benefits Program required to be implemented pursuant to this article. The report shall include, at a minimum, all of the following data for calendar years 2007 through 2014, inclusive:
The number of individuals determined to be eligible for the program as of December 31, 2015.
The number of individuals determined to be eligible for the program under each subdivision of Section 1269.
The number of individuals determined to be eligible for the program under Section 1269.1.
The number of individuals who participated in the program and earned subsequent wages in the following calendar year.
Recommendations to improve the effectiveness and efficiency of the program.
The amendments to this article proposed by Assembly Bill 2058 of the 2009–10 Regular Session shall be effective commencing January 1, 2011, unless the department determines that implementation by that date is not feasible, in which case the department shall implement the amendments provided by that measure no later than July 1, 2011.
ARTICLE 2. Computation (Amount and Duration) [1275. - 1282.]
Unemployment compensation benefit award computations shall be based on wages paid in the base period. “Base period” means: for benefit years beginning in October, November, or December, the four calendar quarters ended in the next preceding month of June; for benefit years beginning in January, February, or March, the four calendar quarters ended in the next preceding month of September; for benefit years beginning in April, May, or June, the four calendar quarters ended in the next preceding month of December; for benefit years beginning in July, August, or September, the four calendar quarters ended with the next preceding month of March. Wages used in the determination of benefits payable to an individual during any benefit year may not be used in determining that individual’s benefits in any subsequent benefit year.
For any new claim filed on or after April 2, 2012, or earlier if the department implements the technical changes necessary to establish claims under the alternate base period, as specified in subdivision (c), if an individual cannot establish a claim under subdivision (a), then “base period” means: for benefit years beginning in October, November, or December, the four calendar quarters ended in the next preceding month of September; for benefit years beginning in January, February, or March, the four calendar quarters ended in the next preceding month of December; for benefit years beginning in April, May, or June, the four calendar quarters ended in the next preceding month of March; for benefit years beginning in July, August, or September, the four calendar quarters ended in the next preceding month of June. As provided in Section 1280, the quarter with the highest wages shall be used to determine the individual’s weekly benefit amount. Wages used in the determination of benefits payable to an individual during any benefit year may not be used in determining that individual’s benefits in any subsequent benefit year.
The department shall implement the technical changes necessary to establish claims under the alternate base period specified in subdivision (b) as soon as possible, but no later than April 2, 2012.
“Benefit year”, with respect to any individual, means the 52-week period beginning with the first day of the week with respect to which the individual first files a valid claim for benefits and thereafter the 52-week period beginning with the week in which such individual again files a valid claim after the termination of his or her last preceding benefit year. As used in this section, “valid claim” means any claim for benefits made in accordance with this division and authorized regulations if the individual filing the claim is unemployed and has met the requirements of subdivision (a) of Section 1281. For the purpose of determining whether a claim is a “valid claim” within the meaning of this section, an individual otherwise unemployed shall be deemed unemployed even though wages, as defined in Section 1252, which are for a period subsequent to the termination of performance of services are payable with respect to the week for which he or she files the claim.
Notwithstanding Section 1281, if the base period of a new claim includes wages which were paid prior to the effective date of, and not used in the computation of the award for, a previous valid claim, the new claim shall only be valid if, during the 52-week period beginning with the effective date of the previous valid claim, either of the following applies:
The individual earned or was paid sufficient wages to meet the eligibility requirements of subdivision (a) of Section 1281 and performed some work.
The individual did not receive benefits under this part, and was disabled and was entitled to receive, wage loss benefits under Part 2 (commencing with Section 2601) of this division or under Division 4 (commencing with Section 3201) of the Labor Code, or under any workers’ compensation law, employer’s liability law, or disability insurance law of any other state or of the federal government.
For the purpose of this section only, the term “wages” includes any and all compensation for personal services performed as an employee for the purpose of meeting the eligibility requirements under subdivision (a) of Section 1281. This section is not applicable to the computation of an award for disability benefits.
Notwithstanding Section 1277, if an individual has a subsequent new claim and the previous valid claim was filed under subdivision (b) of Section 1275, the new claim shall only be valid if, during the 52-week period beginning with the effective date of the previous claim, either of the following applies:
The individual earned or was paid sufficient wages to meet eligibility requirements of subdivision (a) of Section 1281 and performed some work.
The individual did not receive benefits under this part and was disabled and was entitled to receive wage loss benefits under Part 2 (commencing with Section 2601) or under Division 4 (commencing with Section 3200) of the Labor Code, under any workers’ compensation law, under employer’s liability law, or under any disability insurance law of any other state or the federal government.
For purposes of this section, “wages” includes any and all compensation for personal services performed as an employee for the purpose of meeting the eligibility requirements of subdivision (a) of Section 1281. This subdivision is not applicable to the computation of an award for disability benefits.
In determining, under Sections 1277 and 1277.1, whether a new claim is valid, twice the amount that an individual was entitled to receive under Part 2 (commencing with Section 2601) of this division or under Division 4 (commencing with Section 3200) of the Labor Code, or under any workers’ compensation law, employer’s liability law, or disability insurance law of any other state or of the federal government, during the 52-week period beginning with the effective date of the previous valid claim, shall be considered as wages earned or paid to the individual during that 52-week period for purposes of meeting the eligibility requirements of subdivision (a) of Section 1281. The amounts so included shall not be considered wages for the purpose of computing the weekly benefit amount of the individual under Section 1280 or the maximum amount payable to the individual under Section 1281.
For the purposes of this chapter, wages shall be counted as “wages for employment for employers” for benefit purposes with respect to any benefit year only if the benefit year begins subsequent to the date on which the employer from whom the wages were earned has satisfied the conditions of this division with respect to being an employer.
Each individual eligible under this chapter who is unemployed in any week shall be paid with respect to that week an unemployment compensation benefit in an amount equal to his or her weekly benefit amount less the smaller of the following:
The amount of wages in excess of twenty-five dollars ($25) payable to him or her for services rendered during that week.
The amount of wages in excess of 25 percent of the amount of wages payable to him or her for services rendered during that week.
The benefit payment, if not a multiple of one dollar ($1), shall be computed to the next higher multiple of one dollar ($1).
For the purpose of this section only “wages” includes any and all compensation for personal services whether performed as an employee or as an independent contractor or as a juror or as a witness, but does not include any payments, regardless of their designation, made by a city of this state to an elected official thereof as an incident to public office, nor any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.
As used in this section:
“Affected unit” means a specified plant, department, shift, or other definable unit that includes two or more workers and not less than 10 percent of the employer’s regular permanent work force involved in the affected unit or units in each week, or in at least one week of a two-consecutive-week period, to which an approved work sharing plan applies.
“Health and retirement benefits” means employer-provided health benefits and retirement benefits under a defined benefit pension plan, as defined in Section 414(j) of the Internal Revenue Code, or contributions under a defined contribution plan, as defined in Section 414(i) of the Internal Revenue Code, that are incidents of employment in addition to the cash remuneration earned.
“Work sharing compensation” means the unemployment compensation benefits payable to employees in an affected unit under an approved work sharing plan, as distinguished from the unemployment compensation benefits otherwise payable under this part.
“Work sharing plan” means a plan submitted by an employer, for approval by the director, under which the employer requests the payment of work sharing compensation to employees in an affected unit of the employer in lieu of layoffs.
“Work sharing program” means the program described by this section.
“Usual weekly hours of work” means the usual hours of work for full- or part-time employees in the affected unit when that unit is operating on its regular basis, not to exceed 40 hours and not including hours of overtime work.
“Unemployment compensation” means the unemployment compensation benefits payable under this part other than work sharing compensation and includes amounts payable pursuant to an agreement under federal law providing for compensation, assistance, or allowances with respect to unemployment.
Notwithstanding Section 1252 or 1252.2 or any other provision of this part, for the purposes of this section an employee is “unemployed” in any week if the employee works less than their usual weekly hours of work for the employee’s regular employer, as the result of the regular employer’s participation in a work sharing plan that meets the requirements of this section and has been approved by the director, pursuant to which the employer, in lieu of layoff, reduces employment and stabilizes the workforce.
Except as provided in Section 1279.7 an employer wishing to participate in the work sharing program, on and after July 1, 2014, shall submit a signed written work sharing plan to the director for approval. The director shall develop an application form to request approval of a work sharing plan and an approval process that meets the requirements of this section. The application shall include, but is not limited to, the following:
The affected unit covered by the plan, including the number of full- or part-time employees in the unit, the percentage of employees in the affected unit covered by the plan, identification of each individual employee in the affected unit by name, social security number, and the employer’s unemployment tax account number and any other information required by the director to identify plan participants.
A description of how employees in the affected unit will be notified of the employer’s participation in the work sharing plan if the application is approved, including how the employer will notify those employees in a collective bargaining unit as well as any employees in the affected unit who are not in a collective bargaining unit. If the employer does not intend to provide advance notice to employees in the affected unit, the employer shall explain in a statement in the application why it is not feasible to provide that notice.
A requirement that the employer identify, in the application, the usual weekly hours of work for employees in the affected unit and the specific percentage by which their hours will be reduced during all weeks covered by the plan. The percentage of reduction of usual weekly hours of work for which a work sharing plan may be approved shall not be less than 10 percent or more than 60 percent. If the plan includes any week for which the employer regularly does not provide work, including, but not limited to, incidences due to a holiday or plant closing, then that week shall be identified in the application.
Except as provided in subparagraph (B), certification by the employer, if the employer provides health and retirement benefits to any employee whose usual weekly hours of work are to be reduced under the plan, that the benefits will continue to be provided, to the extent permitted by federal law, to employees participating in the work sharing plan under the same terms and conditions as though the usual weekly hours of work of these employees had not been reduced or to the same extent as other employees not participating in the work sharing plan. For defined benefit retirement plans, to the extent permitted by federal law, the hours that are reduced under the work sharing plan shall be credited for purposes of participation, vesting, and accrual of benefits as though the usual weekly hours of work had not been reduced. The dollar amount of employer contributions to a defined contribution plan that are based on a percentage of compensation may be less due to the reduction in the employee’s compensation.
If a reduction in health and retirement benefits is scheduled to occur during the duration of the plan and those reductions will be applied equally to employees who are not participating in the work sharing program, then the application shall so certify, and those benefits may be reduced for those employees who are participating in the work sharing plan.
Certification by the employer that the aggregate reduction in work hours is in lieu of temporary or permanent layoffs, or both. The application shall include an estimate of the number of workers who would have been laid off in the absence of the work sharing plan.
Agreement by the employer to do all of the following:
Furnish reports to the director relating to the proper conduct of the plan.
Allow the director or the director’s authorized representatives access to all records necessary to approve or disapprove the plan application.
After approval of a plan, monitor and evaluate the plan.
Follow any other directives the director deems necessary for the department to implement the plan and that are consistent with the requirements for plan applications.
Certification by the employer that participation in the work sharing plan and its implementation is consistent with the employer’s obligations under applicable federal and state laws.
The effective date and duration of the plan, which shall not be later than the end of the 12th full calendar month after the effective date.
Any other provision added to the application by the director that the United States Secretary of Labor determines to be appropriate for purposes of a work sharing plan.
The director shall approve or disapprove a work sharing plan in writing by the close of business no later than 10 working days from the date the completed plan is received and communicate the decision to the employer. A decision disapproving the plan shall clearly identify the reasons for the disapproval. Within 20 days, the employer may submit a request for review of the disapproved work sharing plan to the director’s work sharing administrator, whom the director shall designate for this purpose. After review, the work sharing administrator’s decision of approval or disapproval shall be final. If disapproved, the employer may submit a different work sharing plan for approval.
The director shall work with the employer to determine the effective date of a work sharing plan, which shall be specified in the notice of approval to the employer. The plan shall expire on the date specified in the notice of approval, which shall be either the date at the end of the 12th full calendar month after its effective date or an earlier date mutually agreed upon by the employer and the director. However, if a work sharing plan is revoked by the director under subdivision (f) of this section, the plan shall terminate on the date specified in the director’s written order of revocation. An employer may terminate a work sharing plan at any time upon written notice to the director. An employer may submit an application to renew the work sharing plan not more than 10 days after a previously approved work sharing plan expires.
The director may revoke approval of a work sharing plan for good cause at any time. The revocation order shall be in writing and shall specify the reasons for the revocation and the date the revocation is effective. The director may periodically review the operation of an employer’s work sharing plan to ensure that good cause does not exist for revocation of the approval of the plan. For purposes of these provisions, good cause includes, but is not limited to, failure to comply with the assurances given in the plan, unreasonable revision of productivity standards for the affected unit, conduct or occurrences tending to defeat the intent and effective operation of the work sharing plan, and violation of any criteria on which approval of the plan was based.
An employer may request a modification of an approved plan by filing a written request to the director. The request shall identify the specific provisions proposed to be modified and provide an explanation of why the proposed modification is appropriate for the work sharing plan. The director shall approve or disapprove the proposed modification in writing by the close of business no later than 10 working days from the date the proposed modification is received and communicate the decision to the employer. The director, in the director’s discretion, may approve a request for modification of the plan based on conditions that have changed since the plan was approved, provided that the modification is consistent with and supports the purposes for which the plan was initially approved. A modification does not extend the expiration date of the original plan, and the director shall promptly notify the employer whether the plan modification has been approved and, if approved, the effective date of the modification, which shall not be earlier than the effective date of the original work sharing plan. An employer is not required to request approval of a plan modification from the director if the change is not substantial, but the employer shall promptly report, in writing, every change to the plan to the director. The director may terminate an employer’s plan if the employer fails to meet this reporting requirement. If the director determines that the reported change is substantial, the director shall require the employer to request a modification to the plan.
An employee is eligible to receive work sharing compensation with respect to any week only if the employee is monetarily eligible for unemployment compensation, not otherwise disqualified for unemployment compensation, and both of the following are true:
During the week, the employee is employed as a member of an affected unit under an approved work sharing plan, which was approved prior to that week, and the plan is in effect with respect to the week for which work sharing compensation is claimed.
Notwithstanding any other provisions relating to availability for work and actively seeking work, the employee is available for the employee’s usual hours of work with the work sharing employer, which may include, for purposes of this section, participating in training to enhance job skills that is approved by the director, such as employer-sponsored training or training funded under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.).
Notwithstanding any other provision of law, an employee covered by a work sharing plan is deemed unemployed in any week during the duration of that plan if the employee’s remuneration as an employee in an affected unit is reduced based on a reduction of the employee’s usual weekly hours of work under an approved work sharing plan.
For the purposes of this section, an employee shall not be disqualified under subdivision (c) of Section 1253 for any week if both of the following conditions exist:
The work sharing weekly compensation amount shall be the product of the regular weekly unemployment compensation amount for a week of total unemployment multiplied by the percentage of reduction in the individual’s usual weekly hours of work.
Provisions applicable to unemployment compensation shall apply to employees in a work sharing plan to the extent that they are not inconsistent with work sharing program provisions. An employee who files an initial claim for work sharing compensation shall receive a monetary determination. An employee may be eligible for work sharing compensation or unemployment compensation, as appropriate, except that an employee shall not be eligible for combined benefits in any benefit year in an amount more than the maximum entitlement established for regular unemployment compensation, nor shall an employee be paid work sharing benefits for more than 52 weeks under a work sharing plan.
An employee who is not provided any work during a week by the work sharing employer, or any other employer, and who is otherwise eligible for unemployment compensation, shall be eligible for the amount of regular unemployment compensation to which the employee would otherwise be eligible.
An employee who is not provided any work by the work sharing employer during a week, but who works for another employer and is otherwise eligible, may be paid unemployment compensation for that week subject to the disqualifying income and other provisions applicable to claims for regular unemployment compensation.
The work sharing compensation paid to an employee shall be deducted from the maximum entitlement amount of regular unemployment compensation established for that employee’s benefit year.
An employee who has received all of the work sharing compensation or combined unemployment compensation and work sharing compensation available in a benefit year shall be considered an exhaustee for purposes of extended benefits and, if otherwise eligible under those provisions, shall be eligible to receive extended benefits.
No employee who receives any benefits under this section during any benefit year shall receive any benefits pursuant to Section 1252 or 1252.2 as a partially unemployed individual with respect to any week during a benefit year while in employment status with the regular employer who initiated the work sharing plan under this section.
Any amount payable under this section shall be reduced by the amount of any and all compensation payable for personal services, whether performed as an employee or an independent contractor or as a juror or as a witness, except compensation payable by the regular employer under a work sharing plan. For the purposes of this subdivision, “regular employer” may include, pursuant to an approved plan, a labor organization that periodically employs individuals in accordance with a collective bargaining agreement.
Work sharing compensation shall be charged to employers’ experience rating accounts in the same manner as unemployment compensation is charged under this part. Employers liable for payments in lieu of contributions shall have work sharing compensation attributed to service in their employ in the same manner as unemployment compensation is attributed.
The benefit payment under this section, if not a multiple of one dollar ($1), shall be increased to the next higher multiple of one dollar ($1).
Except as otherwise provided by or inconsistent with this section, all provisions of this division and authorized regulations apply to benefits under this section. Authorized regulations may, to the extent permitted by federal law, make those distinctions and requirements as may be necessary in the procedures and provisions applicable to unemployed individuals to carry out the purposes of this section, including, but not limited to, regulations defining normal hours, days, workweeks, and wages.
Employees shall not be eligible to receive any benefits under this section unless their employer agrees, in writing, and their bargaining agent pursuant to any applicable collective bargaining agreement agrees, in writing, to voluntarily participate in the work sharing program created by this section.
Notwithstanding Section 1327, the department shall not be required to notify an employer of additional claims that result from an approved plan submitted by the employer under which benefits are not paid in each week.
This section shall become operative on July 1, 2014. This section shall apply to work sharing plans that become effective on or after July 1, 2014.
The department may collaborate with the Governor’s Office of Business and Economic Development and the California Infrastructure and Economic Development Bank to develop and implement strategic outreach to increase participation by employers in the work sharing program described in Section 1279.5 and to provide information to employers about their ability to rehire former employees, based on federal guidance.
Notwithstanding subdivision (c) of Section 1279.5, the director shall accept a work sharing plan application submitted electronically by an employer wishing to participate in, or renew participation in, the work sharing program. The department shall create a portal on its internet website for the provision and receipt of these applications.
Beginning September 15, 2020, work sharing plan applications submitted by eligible employers to participate in, or renew participation in, the work sharing program, upon approval by the director, shall be deemed approved for one year, unless a shorter plan is requested by the employer and approved by the director pursuant to subdivision (e) of Section 1279.5. The department shall mail to an eligible employer a claim packet for each participating employee within five business days following approval of the application. For an employer that submitted a work sharing plan application online, the department shall make online claim forms available to the approved employer for each participating employee within five business days following approval of the application. After the participating employer and employees complete and submit the documents in the claim packet, the department shall establish an unemployment insurance claim pursuant to applicable requirements. Participating employers and employees shall meet the required unemployment insurance claim filing and weekly certification requirements and employers shall be responsible for the completeness and integrity of each work sharing certification form issued to a participating employee.
Notwithstanding any other law, the department shall accept electronic signatures on all work sharing plan documents.
The provisions of this section shall be implemented consistently with the requirements of federal law.
For any new claims filed with an effective date on or after January 1, 1992, and prior to September 11, 2001, an individual’s weekly benefit amount is the amount appearing in column B in the following table opposite that wage bracket in column A that contains the amount of wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.
If the amount of wages paid an individual for employment by employers exceeds four thousand nine hundred sixty-six dollars and ninety-nine cents ($4,966.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 39 percent of these wages divided by 13, but in no case shall this amount exceed two hundred thirty dollars ($230). If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
Notwithstanding subdivision (a), for existing claims on or after September 11, 2001, provided that the unemployment benefits have not been exhausted as of September 11, 2001, and for all new claims filed with an effective date beginning on or after September 11, 2001, and prior to January 1, 2003, an individual’s weekly benefit amount is the amount for weeks of unemployment beginning on or after September 11, 2001, appearing in column B in the following table opposite that wage bracket in column A that contains the amount of wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.
If the amount of wages paid an individual for employment by employers exceeds two thousand seven hundred eighty-one dollars and ninety-nine cents ($2,781.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 45 percent of these wages divided by 13, but in no case may this amount exceed three hundred thirty dollars ($330).
For new claims filed with an effective date beginning on or after January 1, 2003, an individual’s weekly benefit amount is the amount appearing in column B in the following table opposite the wage bracket in column A that contains the wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.
If the amount of wages paid an individual for employment by employers exceeds one thousand eight hundred thirty-two dollars and ninety-nine cents ($1,832.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 50 percent of these wages divided by 13, but in no case shall this amount exceed the applicable of the following:
For new claims filed with an effective date beginning on or after January 1, 2003, and before January 1, 2004, three hundred seventy dollars ($370).
For new claims filed with an effective date beginning on or after January 1, 2004, and before January 1, 2005, four hundred ten dollars ($410).
For new claims filed with an effective date beginning on or after January 1, 2005, four hundred fifty dollars ($450).
If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
An individual cannot establish a valid claim or a benefit year during which any benefits are payable unless during his or her base period, for new claims filed with an effective date beginning on or after January 1, 1992, he or she has met either of the following conditions:
He or she has been paid wages for employment by employers during the quarter of his or her base period in which his or her wages were the highest of not less than one thousand three hundred dollars ($1,300).
He or she has been paid wages for employment by employers during the quarter of his or her base period in which his or her wages were the highest of not less than nine hundred dollars ($900) and been paid wages for employment by employers during his or her base period equal to 1.25 times the amount he or she was paid in this same quarter.
Except as provided by subdivision (c), the maximum amount of unemployment compensation benefits payable to an individual during any one benefit year shall not exceed the lower of the following:
Twenty-six times his or her weekly benefit amount.
One-half the total wages paid to the individual during his or her base period.
If the maximum amount computed under subdivision (b) is not a multiple of one dollar ($1) it shall be computed to the next higher multiple of one dollar ($1).
For the purpose of this section and Section 1280, in determining wages paid, “wages” includes wages due to any individual but unpaid within the time limit provided by law.
If the remuneration of an individual is not based upon a fixed period or duration of time or if the individual’s wages are paid at irregular intervals or in such manner as not to extend regularly over the period of employment, the wages for any week or for any calendar quarter for the purpose of computing an individual’s right to unemployment compensation benefits shall be determined pursuant to authorized regulations. The regulations shall, so far as possible, secure results reasonably similar to those which would prevail if the individual were paid his wages at regular intervals.
ARTICLE 2.2. Self-Employment Assistance Program [1300. - 1300.]
The Legislature finds that the traditional system of unemployment compensation is primarily designed to provide income support for workers who are temporarily laid off or expect to be unemployed for only a short time. However, increasing numbers of workers are losing their jobs permanently due to rapid technological change, elimination of trade barriers, and similar causes. These workers need additional tools besides the basic income maintenance provided by the unemployment compensation system in order to reenter the workforce. For some of those workers, access to a self-employment program would be the best path for them to do so. Accordingly, it is the purpose of this article to authorize the payment of unemployment compensation benefits, and to provide appropriate training and support services, for eligible dislocated workers who wish to become self-employed in their transition back into the workforce.
ARTICLE 3. Filing, Determination, and Payment of Unemployment Compensation Benefit Claims [1326. - 1345.]
Claims for unemployment compensation benefits shall be made in accordance with authorized regulations of the director. Except as otherwise provided in this article, the department shall promptly pay benefits if it finds the claimant is eligible or shall promptly deny benefits if it finds the claimant is ineligible.
An individual shall, to maintain his or her eligibility to file continued claims during a continuous period of unemployment, submit a continued claim not more than 14 days from the end of the last week’s ending date shown on the continued claim, or not more than 14 days from the date the department issued that continued claim, whichever is later, unless the department finds good cause for the individual’s delay in submitting the continued claim. An unemployed individual may not be disqualified for unemployment compensation benefits solely on the basis that the continued claim was submitted 15 to 21 days, inclusive, from the end of the last week’s ending date shown on the continued claim, or 15 to 21 days inclusive, from the date the department issued that continued claim, whichever is later.
The department shall request any personal identification information required from the claimant under this part in accordance with the most recent federal National Institute of Standards and Technology Special Publication 800-63 standards, relating to technical requirements for implementing digital identity services, and as those standards may be amended or updated from time to time.
The department shall give a notice of the filing of a new or additional claim to the employing unit by which the claimant was last employed immediately preceding the filing of the claim unless the additional claim is the result of the filing of a partial claim as defined by the department, there has not been a subsequent employing unit which is designated as the last employer, and there is no separation issue. The employing unit so notified shall submit within 10 days after the mailing of the notice any facts then known that may affect the claimant’s eligibility for benefits, including, but not limited to, facts pertaining to eligibility under Section 1256. The 10-day period may be extended for good cause. If after the 10-day period the employing unit acquires knowledge of facts that may affect the eligibility of the claimant and facts could not reasonably have been known within the period, the employing unit shall, within 10 days of acquiring the knowledge, submit the facts to the department, and the 10-day period may also be extended for good cause.
The department shall consider the facts submitted by an employer pursuant to Section 1327 and make a determination as to the claimant’s eligibility for benefits. The department shall promptly notify the claimant and any employer who before the determination has submitted facts or given notice pursuant to Section 1327 or this section and authorized regulations of the determination or reconsidered determination and the reasons therefor. If, after notice of a determination or reconsidered determination, the employing unit acquires knowledge of facts that may affect the eligibility of the claimant and those facts could not reasonably have been known within the 10-day period provided by Section 1327, the employing unit shall within 10 days of acquiring that knowledge submit those facts to the department, and the 10-day period may be extended for good cause. The claimant and the employer may appeal from a determination or reconsidered determination to an administrative law judge within 30 days from service of notice of the determination or reconsidered determination. The 30-day period may be extended for good cause, which shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect. The director shall be an interested party to any appeal.
This section shall become operative on July 1, 2015.
Upon the filing of a new claim for benefits, the department shall promptly make a computation on the claim that shall set forth the maximum amount of benefits potentially payable during the benefit year, and the weekly benefit amount. The department shall promptly notify the claimant of the computation and the method of computation. The department shall promptly notify each of the claimant’s base period employers of the computation after the payment of the first weekly benefit.
The department shall promptly notify each of the claimant’s base period employers of the computation on the claim that shall set forth the number of weeks that the claimant will be eligible for benefits in the benefit year, the weekly benefit amount, and the maximum amount of benefits potentially payable during the benefit year, based on a determination of eligibility under Article 1.5 (commencing with Section 1266).
A claim for unemployment compensation benefits may be canceled if all of the following apply:
The individual has not been deemed ineligible for unemployment compensation benefits.
The individual has not been overpaid unemployment compensation benefits.
The individual has not been paid unemployment compensation benefits.
The individual requests to cancel the claim during the benefit year of that claim, or in the case of a claim for federal-state extended duration benefits, during the extended duration period of that claim.
For purposes of a claim for unemployment benefits under subdivision (b) of Section 1275, all of the following apply:
Computation using the last four completed calendar quarters shall be based on available wage information processed as of the close of business on the day preceding the date of application.
If the wage information is not already in the department’s system, the department shall request the information from the employer, and the employer shall, within 10 days after the mailing of the request from the department, transmit to the department information on the employee’s wages and any other information relevant to the request. The 10-day period may be extended for good cause.
If the wage, and other relevant information, requested pursuant to subdivision (b) are not received by the department, the department shall accept an affidavit of wages and other relevant information from the claimant in accordance with authorized regulations. These regulations shall be adopted as emergency regulations.
A determination of benefits made pursuant to subdivision (b) of Section 1275 shall be adjusted when the quarterly wage report from the employer is received if that information causes a change in the determination.
Except in the event of fraud, if it is determined that any information provided by the claimant on an affidavit is erroneous, no penalty or refund of benefits shall be imposed on the claimant for the period prior to the calendar week in which an employer provides subsequent wage information.
The claimant and any base period employer to whom a notice of computation or recomputation is given may, within 30 days after the service of the notice, protest the accuracy of the computation or recomputation. The 30-day period may be extended for good cause. The department shall consider this protest and shall promptly notify the claimant and the base period employer submitting the protest of the recomputation or denial of recomputation. An appeal may be taken from a notice of denial of recomputation in the manner prescribed in Section 1328. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
Any base period employer shall, within 15 days after mailing of a notice of computation, submit to the department any facts then known which he or she was not previously required to submit to the department under Section 1327 which may affect the claimant’s eligibility for benefits. The 15-day period may be extended for good cause. If after such 15-day period the employing unit acquires knowledge of facts which may affect the eligibility of the claimant and such facts could not reasonably have been known within the period, the employing unit shall, within 10 days of acquiring such knowledge, submit such facts to the department. The 10-day period may be extended for good cause. The department shall make a determination or reconsidered determination thereon and shall promptly notify the claimant and the base period employer submitting the facts of the determination or reconsidered determination and the reasons therefor. An appeal may be taken in the manner prescribed in Section 1328. The director shall be an interested party to any appeal.
The department shall promptly serve notice of any determination of eligibility for benefits under this part or Part 3 (commencing with Section 3501) or Part 4 (commencing with Section 4001) of this division on the claimant and on any employer or employing unit which prior to this determination has furnished the department with information regarding the claimant’s eligibility pursuant to Sections 1327 and 1331. Service may be made personally, electronically, by mail, or in any other manner the department elects. Unless a notice is personally served, service shall be deemed completed on the date on which the notice is sent, mailed, or emailed. If a notice is personally served, service shall be deemed completed on the date on which the notice is delivered. Failure to serve this notice shall not affect the determination of eligibility.
“Notice” is that notification which apprises the party of a determination of eligibility and allows that party to respond accordingly.
If the department is or should be aware that the notice was not received by the party to whom it was addressed, including, but not limited to, the return to the department of the notice by the United States Post Office, the department shall reissue the notice at such time as the department can determine a corrected mailing address for the affected party or otherwise ensure receipt. The affected party shall have appeal rights pursuant to subdivisions (b) and (c), and pursuant to Section 1328.
The department may for good cause reconsider any determination within 15 days after an appeal to an administrative law judge is filed. If no appeal is filed, the department may for good cause reconsider any determination within 30 days after service of the notice of determination. The department may, if a claimant has not filed an appeal to an administrative law judge from any determination that finds that a claimant is ineligible or disqualified, or if an appeal has been filed but is either withdrawn or dismissed, for good cause also reconsider the determination during the benefit year or extended duration period or extended benefit period to which the determination relates. The department shall give notice of any reconsidered determination to the claimant and any employer or employing unit that received notice under Sections 1328 and 1331 and the claimant or employer may appeal therefrom in the manner prescribed in Section 1328.
The director shall designate individuals to review and reconsider appealed determinations. No individual designated shall be the same individual who made the initial determination in the same matter.
The department may for good cause reconsider any computation or recomputation provided for in this article during the benefit year or extended duration period to which the notice of computation or recomputation relates, except that no recomputation may be considered with respect to any issue considered or under consideration in an appeal taken from a denial of recomputation. The department shall promptly notify the claimant and each of the claimant’s base period employers of the recomputation. The claimant and any base period employer may protest the accuracy of the recomputation as prescribed in Section 1330.
This section shall become operative on July 1, 2015.
Notwithstanding any other provision of this division any provision that prescribes time limits within which the department may reconsider any determination, ruling, or computation or any provision that otherwise restricts or prevents such reconsideration, shall not apply in any case of fraud, misrepresentation or willful nondisclosure.
Notices, protests, and information required under this article shall be submitted in accordance with authorized regulations.
An administrative law judge after affording a reasonable opportunity for fair hearing, shall, unless the appeal is withdrawn, affirm, reverse, modify, or set aside any determination that is appealed under this article. The claimant, the employer becoming a party to the appeal by submitting a protest or information pursuant to Sections 1326 to 1333, inclusive, of this article, and the director shall be promptly notified in writing of the administrative law judge’s decision, together with reasons for it. The decision shall be final unless, within 30 days after mailing of the decision, further appeal is initiated to the appeals board pursuant to Section 1336. The 30-day limitation may be extended for good cause.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
If an appeal is filed, benefits with respect to the period prior to the final decision on the appeal shall be paid only after the decision, except that:
If benefits for any week are payable in accordance with a determination by the department irrespective of any decision on the issues set forth in the appeal, such benefits shall be promptly paid regardless of such appeal.
If an administrative law judge affirms a determination allowing benefits, such benefits shall be promptly paid regardless of any appeal which may thereafter be taken, and regardless of any action taken under Section 1336 or otherwise by the director, appeals board, or other administrative body or by any court.
If the determination is finally reversed, no employer’s account shall be charged with benefits paid because of that determination, except as provided in Section 1026, or if the department determines pursuant to Section 1026.1 that the employer’s reserve account should not be credited.
If benefits for any week are payable in accordance with a determination by the department, or an administrative law judge issues a decision allowing benefits, the benefits shall be promptly paid regardless of any appeal, and regardless of any action taken by the appeals board pursuant to Section 412 or 413. If the determination of the department or the decision of the administrative law judge is finally reversed, no employer’s reserve account shall be charged with benefits paid pursuant to this subdivision, except as provided in Section 1026 or if the department determines pursuant to Section 1026.1 that the employer’s reserve account should not be credited.
The director or any party to a decision by an administrative law judge may appeal to the appeals board from the decision. The appeals board may order the taking of additional evidence and may affirm, reverse, modify, or set aside the decision of the administrative law judge. The appeals board shall promptly notify the director and the parties to any appeal of its order or decision.
The decision of the appeals board on an appeal from the decision of an administrative law judge must be rendered within 60 days after the submission of the appeal unless the board requires the taking of further evidence. If the appeals board requires the taking of further evidence, the hearing shall be commenced within 60 days after the submission of the appeal, and the decision of the board shall be mailed within 60 days after completion of the hearing.
If the appeals board issues a decision allowing benefits the benefits shall be paid regardless of any further action taken by the director, the appeals board, or any other administrative agency, and regardless of any appeal or mandamus, or other proceeding in the courts. If the decision of the appeals board is finally reversed or set aside, no employer’s account shall be charged with the benefits paid pursuant to this section, except as provided in Section 1026, or if the department determines pursuant to Section 1026.1 that the employer’s reserve account should not be credited.
The department shall pay unemployment compensation benefits through public employment offices or such other agency as may be prescribed by authorized regulations of the director.
Beginning January 1, 2024, the department shall provide a person entitled to receive unemployment compensation benefits the option to receive payments by direct deposit, as regulated under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), into a qualifying account, as defined in subdivision (a) of Section 1339.1, of the recipient’s choice, in addition to other alternative disbursement payment methods, including, but not limited to, debit cards and checks.
Each check or certification (pay order) issued in payment of unemployment insurance compensation benefits shall have prominently imprinted upon it: “State unemployment insurance benefits under the California Unemployment Insurance Code are paid for by employers.”
Notwithstanding this part, if unemployment compensation benefit payments are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (2), for deposit of public assistance payments, including unemployment compensation benefits.
For purposes of this section, a “qualifying account” is one of the following:
A demand deposit or savings account at an insured depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is in the name of the person entitled to receipt of public assistance payments.
A prepaid account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution, that meets all of the following:
The account is held at an insured depository financial institution.
The account is set up to meet the requirements for direct or passthrough deposit or share insurance payable to the person entitled to the receipt of public assistance payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
The account is not attached to a credit or overdraft feature that is automatically repaid from the account unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations.
The account complies with all of the requirements, and provides the holder of the account with all of the consumer protections, that apply to an account under the rules implementing the EFTA.
A person or entity that is not an insured depository financial institution that offers, maintains, or manages an account that does not comply with paragraph (2) shall not solicit, accept, or facilitate the direct deposit of unemployment compensation benefit payments to the account.
The department has no obligation to determine whether an account at the insured depository financial institution of the recipient’s choice is a qualifying account, as described in subdivision (a). For purposes of this section, the department shall not be held liable for authorizing a direct deposit of unemployment compensation benefit payments into an account designated by the recipient that does not comply with paragraph (2) of subdivision (a).
For the purposes of this section, the following definitions shall apply:
“Insured depository financial institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.
“Prepaid account” has the same meaning as that term is defined in regulations under the EFTA.
Minors who are eligible for benefits may be paid and receive benefits in their own right, and a receipt signed by a minor shall be valid and binding.
Benefits due a deceased or legally declared incompetent person may be paid to such person or persons as appears to the Director of Employment Development to be legally entitled thereto in accordance with authorized regulations of the Director of Employment Development. Such payment shall be made upon affidavit executed by the person or persons claiming to be entitled to the benefits and the receipt of the affidavit or affidavits shall fully discharge the Director of Employment Development from any further liability with reference to the payments, without the necessity of inquiring into the truth of any of the facts stated in the affidavit.
Any waiver by any person of any benefit or right under this code is invalid, except as provided by Sections 1255.7, 1342.1, 1345, and 2630. Benefits under this code, incentive payments provided by Division 2 (commencing with Section 5000), and payments to an individual under a plan or system established by an employer which makes provisions for his or her employees generally, or for a class or group of his or her employees, for the purpose of supplementing unemployment compensation benefits, are not subject to assignment, release, or commutation, except as provided by Sections 1255.7, 1342.1, 1345, and 2630. Any agreement by any individual in the employ of any person or concern to pay all or any portion of the contributions required of his or her employer under this division is void.
An individual filing a new claim for unemployment compensation shall, at the time of filing the claim, be advised that:
Unemployment compensation and disability insurance benefits, when paid in lieu of unemployment compensation, are subject to federal income tax.
Requirements exist pertaining to estimated tax payments.
The individual may elect to have federal income tax deducted and withheld from the compensation at the amount specified in the Internal Revenue Code.
The individual is permitted to change a previously elected withholding status.
Amounts deducted and withheld from unemployment and disability compensation shall be made in accordance with procedures specified by the United States Department of Labor and Internal Revenue Service pertaining to the deducting and withholding of income tax, and in accordance with the priorities established in department regulations developed by the director.
An individual covered by a voluntary plan approved under Section 3254 may, at the time he or she applies for voluntary plan benefits or at any time while receiving voluntary plan benefits, voluntarily choose to allow his or her employer or an agent of the employer, appointed under Section 1096, to redirect a portion of the voluntary plan benefits payable under this code to cover all or part of the cost of employee-paid benefits, if both the following requirements are satisfied:
The individual has given written authorization for the redirection of a weekly dollar amount of voluntary plan benefits for the payment of the employee-paid benefits.
The individual may terminate or change the terms of the voluntary redirection of benefits paid at any time while receiving benefits under the voluntary plan.
Any request to redirect benefits as provided in subdivision (a) shall be in writing. The form of employee authorization required under this section shall be approved by the director.
In no event shall disability benefits payments be delayed because an individual elects to redirect a portion of his or her benefits payable under this division.
Should an individual be legally declared incompetent, the spouse of the individual, in the absence of any other legally authorized representative, shall have the right to continue or cancel the authorization.
ARTICLE 4. Overpayments [1375. - 1384.]
Any person who is overpaid any amount of benefits under this part is liable for the amount overpaid unless any of the following is applicable:
The overpayment was not due to fraud, misrepresentation or willful nondisclosure on the part of the recipient, and (2) the overpayment was received without fault on the part of the recipient, and its recovery would be against equity and good conscience.
The department determines that it is in the interest of justice to waive all or part of the liability established under this section because the overpayment was a direct result of inducement, solicitation, or coercion on the part of the employer.
If the director finds that an individual has been overpaid unemployment compensation benefits because he or she willfully, for the purpose of obtaining unemployment compensation benefits, either made a false statement or representation, with actual knowledge of the falsity thereof, or withheld a material fact, the director shall assess against the individual an amount equal to 30 percent of the overpayment amount. Assessments collected under this section shall be deposited in the following manner:
For penalty assessments established prior to October 22, 2013, 100 percent of the overpayment penalty amount in the Benefit Audit Fund.
For penalty assessments established on or after October 22, 2013, as follows:
50 percent of the overpayment penalty amount in the Unemployment Trust Fund.
50 percent of the overpayment penalty amount in the Benefit Audit Fund.
No determination of overpayment shall be based upon the disallowance by the Workmen’s Compensation Appeals Board of a claim of lien filed under subdivision (g) of Section 4903 of the Labor Code, or the allowance of such lien for less than the amount claimed as a lien, or upon the approval by the said appeals board of a compromise and release agreement providing for the allowance of such lien in an amount less than the amount claimed as a lien.
Any claim of lien filed with the Workmen’s Compensation Appeals Board under the provisions of Section 4903 of the Labor Code shall be fully discharged and satisfied by payment of the amount of such lien allowed by the said appeals board under the provisions of Section 4904 of said code or the amount specified in any compromise and release agreement filed and approved by the said appeals board pursuant to Sections 5000 through 5004 of said code.
The director shall find that an individual has been overpaid unemployment benefits where the individual was an elected official and the individual’s unemployment insurance claim was based on income solely derived from his or her employment as an elected official. An individual who is liable pursuant to this section shall not be eligible for waiver of the overpayment pursuant to Section 1375. In the event of an unemployment insurance claim based on more than one source of income, if the base period of a new claim includes any wage credits earned as an elected official pursuant to Section 634.5, the individual shall be liable for any amount of unemployment insurance benefits overpaid as a result of a recomputation to remove the base period wage credits earned as an elected official. In that event, the provisions of Section 1375 shall not apply to this section with respect to the wage credits earned as an elected official.
The Director of Employment Development shall determine the amount of the overpayment and any assessment authorized under Section 1375.1 and shall notify the liable person of the basis of the overpayment determination. In the absence of fraud, misrepresentation, or willful nondisclosure, notice of the overpayment determination shall be served within the latest of the following periods:
Not later than one year after the close of the benefit year in which the overpayment was made.
Not later than six months after the date a backpay award was made.
Within 30 days from the date of mailing or serving of the notice of overpayment, the person affected may file an appeal to an administrative law judge. The director shall be an interested party to any such appeal. The administrative law judge, after affording reasonable opportunity for a fair hearing, shall, unless the appeal is withdrawn, affirm, reverse, modify, or set aside the findings set forth in the notice of overpayment. The party and the director shall be notified of the administrative law judge’s decision, together with his or her reasons therefor, which shall be final unless within 30 days from the date of notification or mailing of the decision a further appeal is initiated to the appeals board pursuant to Section 1336. The 30-day period for an appeal to the administrative law judge or to the appeals board may be extended for good cause.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
The director, subject to this article, may do any or all of the following in the recovery of overpayments of unemployment compensation benefits:
File a civil action against the liable person for the recovery of the amount of the overpayment within one year after any of the following, or, in cases where the individual has been overpaid benefits due to fraud, misrepresentation, or nondisclosure as described in Section 1375.1, or where the director has found an overpayment pursuant to Section 1375.7, within three years of any of the following:
The service of the notice of overpayment determination if the person affected does not file an appeal to an administrative law judge.
The mailing of the decision of the administrative law judge if the person affected does not initiate a further appeal to the appeals board.
The date of the decision of the appeals board.
Initiate proceedings for a summary judgment against the liable person. However, this subdivision applies only where the director has found, pursuant to Section 1375, that the overpayment may not be waived because it was due to fraud, misrepresentation, or willful nondisclosure on the part of the recipient or where the director has found an overpayment pursuant to Section 1375.7. The director may, not later than three years after the overpayment became final, file with the clerk of the proper court in the county from which the overpayment of benefits was paid or in the county in which the claimant resides, a certificate containing all of the following:
A statement that the director has complied with all the provisions of this article prior to the filing of the certificate.
A request that judgment be entered against the liable person in the amount set forth in the certificate.
The clerk, immediately upon the filing of the certificate, shall enter a judgment for the State of California against the liable person in the amount set forth in the certificate.
For the purposes of this subdivision only, an overpayment is final and due and payable after any of the following:
The liable person has not filed an appeal pursuant to Section 1377.
The liable person has filed an appeal to the administrative law judge and a decision of an administrative law judge has become final.
The liable person has filed an appeal to the appeals board and the decision of the appeals board has become final because the liable person has not sought judicial review within the six-month period provided by Section 410.
Reduce or vacate a summary judgment by filing a certificate to that effect with the clerk of the proper court.
Offset the amount of the overpayment received by the liable person against any amount of benefits to which they may become entitled under this division within six years of the date of the service of the notice of overpayment determination.
An abstract of judgment obtained pursuant to subdivision (a) or (b) of Section 1379, or a copy thereof, may be recorded with the county recorder of any county. From the time of recording, the judgment shall constitute a lien against all real or personal property of the liable person in that county owned by the liable person at the time, or which the liable person may afterwards, but before the lien expires, acquire. The lien shall have the force, effect, and priority of a judgment lien and shall continue for 10 years from the time of recording of the abstract of judgment obtained pursuant to subdivision (a) or (b) of Section 1379, unless sooner released or otherwise discharged.
The lien may, within 10 years from the date of recording of the abstract of judgment or within 10 years from the date of the last extension of the lien in the manner provided in this section, be extended by recording a new abstract in the office of the county recorder of any county. From the date of such recording, the lien shall be extended for 10 years unless sooner released or otherwise discharged.
Execution shall issue upon such a judgment upon request of the director in the same manner as execution may issue upon other judgments. Sales shall be held under such execution as prescribed in the Code of Civil Procedure. In all proceedings under this section, the director or his or her authorized agents may act on behalf of the state.
File an acknowledgment of satisfaction of judgment with the court.
Serve an acknowledgment of satisfaction of judgment on the claimant. Service shall be made personally or by mail.
Record an acknowledgment of satisfaction of judgment in the office of the county recorder where the abstract of judgment is recorded.
If an acknowledgment of satisfaction of judgment is recorded, the cost of recording is an obligation of the claimant and may be collected from the claimant in any manner provided by law for the collection of benefit overpayments.
If payment is made by check, any action specified in subdivision (a) shall not be required until the check has been paid by the financial institution upon which it was drawn.
No person shall be liable for the amount of benefits received where the benefits were paid pursuant to an administrative law judge’s decision which affirmed an initial determination or in accordance with a final decision of the appeals board, regardless of any further appeal. An employer’s experience rating account shall not be charged with any benefits erroneously or unlawfully paid, except as provided in Section 1026 or 1144.
The director shall enforce collection of any judgment obtained by the director under subdivision (a) or (b) of Section 1379. Amounts collected under this section shall be deposited in the fund from which the overpayment was made, except that the amounts collected to offset the costs of collections shall be deposited in the Unemployment Administration Fund and the amounts collected pursuant to Section 1375.1 shall be deposited as specified in that section.
No person shall be liable for the amount of benefits received for any period for which the person also received an award or settlement of backpay resulting from an action or grievance for wrongful discharge, if the amount of the backpay award or settlement was reduced by the amount of benefits received pursuant to this part. When the amount of the backpay award or settlement was reduced by the amount of benefits received, the employer shall pay to the Unemployment Fund an amount equal to the amount subtracted from the backpay award or settlement for benefits received by the person in order to reimburse the fund. When an individual has been awarded or receives backpay, the amount of the backpay shall constitute wages paid in the period for which it is awarded.
A mediator or arbitrator who is a party to the backpay award or settlement shall, within 30 days of the settlement, report to the department the name and address of the employer, the amount of benefits by which the award or settlement was reduced, and the name and social security number of the person who received the award or settlement.
Notwithstanding any other provision of law to the contrary, the Franchise Tax Board shall aid the department in the recovery of overpayments of unemployment compensation benefits pursuant to Section 1379 for up to six years after the date of the service of the notice of overpayment determination.
Amounts collected by the Controller for benefit overpayment accounts, pursuant to Section 12419.2 of the Government Code, shall be deposited in the fund from which the overpayment was made, except that the amounts collected to offset the costs of collections shall be deposited in the Unemployment Administration Fund.
CHAPTER 5.5. Between Terms Unemployment Compensation for Nonprofessional Employees of State Special Schools [1451. - 1454.]
Nonprofessional employees of the Fremont and Riverside campuses of the California School for the Deaf, the Fremont campus of the California School for the Blind, and the diagnostic schools for individuals with neurological disabilities located in Los Angeles, San Francisco, and Fresno, shall be eligible for benefits provided by this chapter, on the same terms and conditions as are specified by this part, Part 3 (commencing with Section 3501), and Part 4 (commencing with Section 4001), for all other individuals, except where inconsistent with the provisions of this chapter. Except where inconsistent with the provisions of this chapter, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this chapter.
Notwithstanding Section 1253.3, between terms unemployment compensation benefits are payable by the Controller, from funds appropriated for support of the State Department of Education and allocated to the state special schools, upon authorization by the Employment Development Department to individuals who are eligible to receive these benefits under this chapter. These benefits shall only be paid for weeks of unemployment occurring between school terms and during an established and customary vacation period or holiday recess when other benefits are denied solely by reason of Section 1253.3.
There shall be transferred to the Employment Development Department from funds appropriated for support of the State Department of Education and allocated to the state special schools, at the times and in the manner provided in subdivision (b), an amount equal to the additional cost to the Employment Development Department for added administrative work arising out of this chapter.
The director shall determine the sums he or she estimates the department will be entitled to receive from the State Department of Education under this section for each fiscal year, reduced or increased by any sum by which he or she finds that his or her estimates for any prior fiscal year were greater or less than the amounts which were actually required. The sum of the amounts transferred or expended pursuant to Section 1452, subdivision (a), and this subdivision in any one fiscal year shall not exceed the amount appropriated in the then current fiscal year to the State Department of Education for the purposes of this chapter.
The director may require from the State Department of Education such employment, wage, financial, statistical, or other information and reports, properly verified, as may be deemed necessary by the director to carry out his or her duties under this division, which shall be filed with the director at the time and in the manner prescribed by him or her.
The director may tabulate and publish information obtained pursuant to this chapter in statistical form and may divulge the name of the employing unit.
The State Department of Education shall provide each employee subject to this chapter, at the end of each school term, with written information advising the employee of benefit rights pursuant to this chapter.
An individual who receives any unemployment compensation benefits otherwise payable irrespective of this chapter, including retroactive unemployment compensation benefits paid pursuant to subdivision (c) of Section 1253.3, who has received benefits under this chapter for the same period, shall be liable for repayment to the state of the amount of benefits paid under this chapter for that period.
CHAPTER 6. Financial Provisions [1501. - 1611.5.]
ARTICLE 1. Deposit Account [1501. - 1501.]
The director may in accordance with law deposit for the purpose of clearance by the director all money collected under this division, in a state or national bank in this state. After clearance the money so deposited shall be deposited in the State Treasury to the credit of the proper fund as prescribed in this division.
ARTICLE 2. Unemployment Fund [1521. - 1537.]
The Unemployment Fund is continued in existence as a special fund, separate and apart from all public money or funds of this state. This fund shall consist of (1) all employer contributions collected under this division; (2) interest earned upon any money in the fund; (3) any property or securities acquired through the use of money belonging to the fund; (4) all earnings of such property or securities; (5) all money credited to this state’s account in the Unemployment Trust Fund pursuant to Section 903 of the Social Security Act, as amended; (6) all assessments collected pursuant to paragraph (1) of subdivision (b) of Section 1375.1; and (7) all other money received for the fund from any other source. All money in the fund shall be mingled and undivided.
Notwithstanding Section 13340 of the Government Code, all money in the Unemployment Fund and in the various accounts of that fund, except any money deposited pursuant to Section 1528.5, is continuously appropriated for the purposes authorized in this article.
The Unemployment Fund shall be administered by the director exclusively for the purposes of this division without liability upon the part of the State beyond the amounts paid into and earned by the fund.
The State Treasurer is ex officio the treasurer and custodian of the Unemployment Fund. He shall administer the fund in accordance with the directions of the director. The official bond of the State Treasurer shall cover the faithful performance of his duties as treasurer of the Unemployment Fund.
There shall be maintained within the fund three separate accounts:
A clearing account.
An Unemployment Trust Fund account.
A benefit account.
All contributions and amounts payable to the Unemployment Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in the clearing account.
All withheld income taxes and amounts payable to the Personal Income Tax Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.
All worker contributions and amounts payable to the Disability Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.
All amounts specified in Section 1585 payable to the Contingent Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.
All amounts payable to the Unemployment Administration Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.
Immediately after clearance, all money in the clearing account except interest on contributions, and penalties collected shall be deposited in or invested in the obligations of the Unemployment Trust Fund of the United States of America or its authorized agent to the credit of this State, any provisions of law in this State relating to the deposit, administration, release, or disbursement of money in the possession or custody of this State to the contrary notwithstanding. The amounts so deposited or invested shall be entered in the Unemployment Trust Fund Account.
The benefit account consists of all money requisitioned from this State’s account in the Unemployment Trust Fund, except money requisitioned for administration pursuant to Section 1528.5, and any money so requisitioned, except money requisitioned for administration pursuant to Section 1528.5, shall be transferred out of the Unemployment Trust Fund account into the benefit account.
Money credited to the account of this state in the Unemployment Trust Fund by the Secretary of the Treasury of the United States of America pursuant to Section 903 of the Social Security Act, as amended, may not be requisitioned from this state’s account or used except for the payment of benefits and for the payment of expenses incurred for the administration of this part. Such money may be requisitioned pursuant to Section 1529 for the payment of benefits. Such money may also be requisitioned and used for the payment of expenses incurred for the administration of this part but only pursuant to a specific appropriation by the Legislature and only if the expenses are incurred and the money is requisitioned after the enactment of an appropriation law which:
Specifies the purposes for which such money is appropriated and the amounts appropriated therefor.
Limits the period within which such money may be obligated to a period ending not more than two years after the date of the enactment of the appropriation law.
Provides that the total amount which may be obligated shall be limited to the restrictions specified by, and charged in accordance with, Section 903(c)(2)(D) of the Social Security Act, as amended.
Money appropriated pursuant to this section for the payment of expenses of administration shall be requisitioned as needed for the payment of obligations incurred under such appropriation and, upon requisition, shall be deposited in the Unemployment Administration Fund, but, until expended, shall remain a part of the Unemployment Fund. The director and the Controller shall maintain a separate record of the deposit, obligation, expenditure, and return of funds so deposited. Any money so deposited which will not be expended shall be returned promptly to the account of this state in the Unemployment Trust Fund.
Except as provided in Section 1528.5, money shall be requisitioned from this State’s account in the Unemployment Trust Fund solely for the payment of benefits and in accordance with authorized regulations. The director shall from time to time requisition from the Unemployment Trust Fund such amounts, not exceeding the amounts standing to this State’s account therein, as he deems necessary for the payment of benefits for a reasonable future period. Upon receipt thereof the Treasurer shall deposit such money in the benefit account of the Unemployment Fund. Any balance of money requisitioned from the Unemployment Trust Fund which remains unclaimed or unpaid in the benefit account after the expiration of the period for which such sums were requisitioned shall either be considered in preparing subsequent estimates and may be utilized for the payment of benefits during succeeding periods, or, in the discretion of the director, shall be redeposited with the Secretary of the Treasury of the United States of America, to the credit of this State’s account in the Unemployment Trust Fund.
The provisions of this article to the extent that they relate to the Unemployment Trust Fund, shall be operative only so long as that fund continues to exist and so long as the Secretary of the Treasury of the United States of America continues to maintain for this State a separate book account of all funds deposited therein by this State for benefit purposes, together with this State’s proportionate share of the earnings of the Unemployment Trust Fund, from which no other state nor the United States is permitted to make withdrawals. If and when such Unemployment Trust Fund ceases to exist, or such separate book account is no longer maintained, all money, properties, or securities therein, belonging to the Unemployment Fund of this State shall be transferred to the treasurer of the Unemployment Fund, who shall hold, invest, transfer, sell, deposit, and release such money, properties, or securities in a manner approved by the director in accordance with the provisions of this division. Such money shall be invested in bonds or other interest-bearing obligations of the United States of America or the State of California. Such investment shall at all times be so made that all the assets of the fund shall always be readily convertible into cash when needed for the payment of benefits. The Treasurer shall dispose of securities or other properties belonging to the Unemployment Fund only under the direction of the director.
The director shall, without presenting vouchers and itemized statements therefor, withdraw from the benefit account any sums which he deems necessary for the payment of benefits for a reasonable future period. The Controller shall draw his warrant for any claim presented by the director for the payment of benefits under this account and the Treasurer shall pay the warrant. Upon the withdrawal thereof, such sums shall be deposited in a benefit payment account in such bank, savings and loan association, or public depository and under such conditions as the director determines, with the approval of the Department of Finance. Such bank, savings and loan association, or public depository shall be one in which general funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of the benefit payment account. The director may, out of funds available for administration, pay premiums on insurance for the protection of money in his possession.
Money in the benefit payment account shall be used solely to pay benefits pursuant to authorized regulations and no other disbursement shall be made therefrom, but amounts erroneously and illegally deposited in such account may be refunded therefrom, except that money credited to this State’s account pursuant to Section 903 of the Social Security Act, as amended, shall be used exclusively as provided in Section 1528.5. The procedure prescribed by such regulations shall be deemed to satisfy and shall be in lieu of any and all statutory requirements not contained in this division of specific appropriation or other form of release by state officers of money in their custody prior to expenditure which might otherwise be applicable to withdrawals from the benefit payment account. Any balance of money withdrawn from the benefit account which remains unclaimed or unpaid in the benefit payment account after the expiration of the period for which such sums were withdrawn shall be considered in preparing subsequent estimates and may be utilized for the payment of benefits during succeeding periods or, in the discretion of the director, shall be redeposited in the benefit account.
Except as otherwise provided in this chapter, money in the clearing and benefit accounts may be deposited by the Treasurer, under the direction of the director, in any bank, savings and loan association, or public depositary in which public funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of the fund. Money in the clearing and benefit accounts shall not be commingled with other state funds, but shall be maintained in a separate account on the books of the depositary. Such money shall be secured by the bank or public depositary to the same extent and in the same manner as required under Chapter 4, Part 2, Division 4, Title 2 of the Government Code if deposited in a bank or public depository, not a savings and loan association or to the same extent and in the same manner as required under Chapter 4.5 (commencing with Section 16600) of Part 2 of Division 4 of Title 2 of the Government Code if deposited in a savings and loan association and collateral pledged shall be maintained in a separate custody account.
Refunds or judgments payable pursuant to this part, may be paid from the clearing account or from the benefit account with respect to any money erroneously deposited therein, upon warrants issued by the Controller under the direction of and in accordance with authorized regulations, except that money credited to this state’s account pursuant to Section 903 of the Social Security Act, as amended, shall be used exclusively as provided in Section 1528.5. Refunds of interest, penalties, and fines and interest payable on refunds and judgments pursuant to this division may not be paid from the benefit account but may be paid from the clearing account to the extent that interest, penalties, and fines collected are currently on deposit in that account.
During such time as the Federal Social Security Act and Federal Unemployment Tax Act are amended so as to remove the requirement that all money withdrawn from the Unemployment Fund be used solely in the payment of unemployment compensation, exclusive of expenses of administration, and for refunds of sums erroneously paid into such fund and refunds paid in accordance with the provisions of Section 3305(b) of the Federal Unemployment Tax Act, then notwithstanding any other provisions of this division to the contrary there is hereby continuously appropriated out of the Unemployment Fund for the purpose of administering this division, including salaries and other expenses of the department and the acquisition of necessary real property, all amounts collected under Section 993.
Any amounts determined by the director or his authorized representatives to be payable to employing units as refunds of contributions erroneously paid which are unclaimed at the end of three years from such determination shall be included in the revenue to the Unemployment Fund or in the case of interest or penalties, to the Contingent Fund. The employing unit or person entitled to such payment shall not thereafter maintain any claim, action or proceeding with respect to such amounts.
Whenever any warrant drawn on an account in the Unemployment Fund or on the Unemployment Administration Fund or the Contingent Fund by the Controller remains unclaimed after one year the amount thereof shall revert to the account and the fund from which the amount was payable.
ARTICLE 3. Administration Fund [1555. - 1562.]
The Unemployment Administration Fund is continued in existence as a special fund in the State Treasury. All money which is deposited or paid into this fund, except any money deposited pursuant to Section 1528.5, is hereby continuously appropriated and made available to the director for the purposes authorized in this article without regard to fiscal years. Any balances in this fund shall not lapse at any time, but shall be continuously available to the director for expenditure consistent with the purposes authorized.
Except for money deposited pursuant to Section 1528.5, the Unemployment Administration Fund shall consist of all money appropriated by this state for the purpose of administering this part, money deposited for the purpose of expenditure pursuant to Section 1558.5, and all money received from the United States of America, or any agency thereof, including the Secretary of Labor, or from any other source for such purpose. Money requisitioned and deposited in this fund pursuant to Section 1528.5 shall remain part of the Unemployment Fund and shall be used only in accordance with the conditions specified in that section.
Money in the Unemployment Administration Fund shall not be commingled with other state funds, but shall be maintained in a separate account on the books of the depositary. Such money shall be secured by the depositary in which it is held to the same extent and in the same manner as required under Chapter 4, Part 2, Division 4, Title 2 of the Government Code, if deposited in a bank, or under Chapter 4.5 (commencing with Section 16600) of Part 2 of Division 4 of Title 2 of the Government Code if deposited in a savings and loan association and collateral pledged shall be maintained in a separate custody account.
Except as provided by Section 1558.5, all money in the Unemployment Administration Fund shall be expended solely for the purpose of defraying the cost of the administration of this division, including, but not limited to, payments authorized under Sections 1786 and 1788, and for no other purpose whatsoever, and all money, except money received pursuant to Section 1528.5, received from the federal government for the fund pursuant to Section 302 of the Social Security Act shall be expended solely for the purposes and in the amounts found necessary by the Secretary of Labor for the proper and efficient administration of this division.
Money in the Unemployment Administration Fund may be expended for any cost of administration under this code, or for any expenditure by the department chargeable pursuant to state or federal law to another state or federal fund or appropriation or to a subvention, payment under a contract, or other source and expended for any purpose authorized by such state or federal law, in accordance with a plan or system of accrual cost accounting approved by the United States Department of Labor under which expenditures from the Unemployment Administration Fund are charged against advances from or subsequently reimbursed from another fund or funds or appropriation or a subvention or payment under a contract or other source to which the actual costs of such expenditures are chargeable. The director shall deposit in the Unemployment Administration Fund advances from another fund or funds or appropriation or subvention or contract payment or other source made in accordance with an approved plan or system under this section.
All money in the Unemployment Administration Fund shall be deposited, administered, and disbursed in the same manner and under the same conditions and requirements as is provided by law for other special funds in the State Treasury, but the director may draw, without at the time furnishing vouchers and itemized statements, sums not to exceed in the aggregate an amount equal to 1 percent of the total disbursements made from the fund during the immediately preceding fiscal year to be used as a revolving fund where payment of compensation earned, traveling expense advances, payments under Sections 1786 and 1788, the fees, commissions and expenses authorized to be charged in connection with the levy of writs of attachment or execution under Article 7 (commencing with Section 26720) of Chapter 2 of Part 3 of Division 2 of Title 3 of the Government Code, or other cash payments are necessary. At the close of each fiscal year or at any other time, upon the demand of the Department of Finance, the money so drawn shall be accounted for and substantiated by vouchers and itemized statements submitted to and audited by the Controller.
All money in the Unemployment Administration Fund, in excess of current requirements, and not otherwise invested, may be deposited by the State Treasurer in banks and savings and loan associations and otherwise held and invested by him in the same manner as provided by law in the case of other special funds in the State Treasury, and under the same rules and regulations that govern the deposit of other public funds.
The State Treasurer is liable on his official bond for the faithful performance of his duties in connection with the Unemployment Administration Fund. This liability shall exist in addition to any liability upon any separate bond now existing or which may be given in the future. All sums recovered on the official bond for losses sustained by the Unemployment Administration Fund shall be deposited in that fund.
This state recognizes its obligations to replace, and pledges the faith of this state that funds shall be provided in the future, and applied to the replacement of, any money received from the federal government under Title 3 of the Social Security Act, any unencumbered balances in the Unemployment Administration Fund and any money granted to this state pursuant to the provisions of the Wagner-Peyser Act, which the Secretary of Labor finds have, because of any action or contingency, been lost or expended for purposes other than, or in amounts in excess of, those found necessary by the Secretary of Labor for the proper administration of this part and Parts 3 (commencing with Section 3501) and 4 (commencing with Section 4001) of this division. Such money shall be replaced within a reasonable time by money appropriated by the Legislature from the general funds of this state to the Unemployment Administration Fund. The director shall report to the Director of Finance, in the same manner as is provided generally for the submission of financial requirements for the ensuing year, and the Governor shall include in his or her next budget report to the Legislature, the amount required for such replacement.
ARTICLE 4. Contingent Fund [1585. - 1590.5.]
There is in the State Treasury a special fund known as the Employment Development Department Contingent Fund. The Employment Development Department Contingent Fund is the successor of the Department of Human Resources Development Contingent Fund. There shall be deposited in or transferred to this fund:
Notwithstanding any other provision of law, all penalties and interest collected by the department pursuant to Division 6 (commencing with Section 13000) relating to the withholding of personal income tax.
Rental payments or proceeds attributable to property derived from amounts expended from this fund.
Interest on amounts expended from this fund.
The director shall estimate the amount of penalties and interest collected by the department pursuant to Division 6 (commencing with Section 13000) relating to the withholding of personal income tax and shall transfer such amount to the Personal Income Tax Fund on a quarterly basis.
For the 2014–15 fiscal year, the quarterly transfer to the Personal Income Tax Fund pursuant to subdivision (a) is suspended.
All amounts in the Contingent Fund are hereby continuously appropriated without regard to fiscal years for refund of amounts collected and erroneously deposited therein, for interest payable under this division on refunds and judgments and for the administration of the department.
There is hereby appropriated from the Contingent Fund to the Employment Development Department an amount sufficient to augment an appropriation available from the Unemployment Trust Fund pursuant to Section 1528.5 for acquisition of real property, or for construction and equipment of state public works projects, in order to provide for payment of such public work projects for which an appropriation is available where such project cannot be undertaken because the estimate exceeds the amount available or bids received are in excess of the estimate, and upon such augmentation, contracts may be awarded therefor, notwithstanding the provisions of Section 14275 of the Government Code.
Allocations may be made for acquisition of real property in augmentation of appropriations made for acquisition of real property and which cannot be acquired because acquisition costs are in excess of the amounts provided in the appropriation.
Allocations may be made for purchase of equipment in augmentation of appropriations made from which purchase of equipment is authorized.
Expenditures shall be pursuant to executive orders of the Director of Finance upon approval of the State Public Works Board.
Any amount authorized to be expended from the Contingent Fund for administration may be transferred to the Unemployment Administration Fund, but any amount not needed for the purpose for which authorized shall, upon order of the Director of Finance, be retransferred to the Contingent Fund.
In lieu of filing claims for refund and interest payable on refunds against each of the funds from which an amount has been determined to be due under this division, the director may file a single claim with the State Controller showing the amount payable from each fund for payment from the Contingent Fund, and the Controller shall thereupon draw his warrant on the Contingent Fund and transfer the amounts certified by the director to be due from the Clearing Account—Unemployment Fund, the Employment Training Fund, the Unemployment Compensation Disability Fund, and the Personal Income Tax Fund, to the Contingent Fund.
Except as provided by Section 1585.5, the director shall from time to time determine, and the State Controller shall from time to time transfer, the unencumbered balance of the Contingent Fund which at any time during any calendar year exceeds one million dollars ($1,000,000) to the Unemployment Fund and the Disability Fund in the proportion that the year’s estimated revenues for penalties and interest relating to employer contributions attributable to the Unemployment Fund bear to the year’s estimated revenues for penalties and interest relating to worker contributions attributable to the Disability Fund.
It is the intent of the Legislature that the Budget Act for each fiscal year shall appropriate the entire amount available in the Contingent Fund during the fiscal year for the purposes of this article.
ARTICLE 4.1. Building Fund [1591. - 1592.]
There is in the State Treasury the Employment Development Department Building Fund. There shall be deposited in, or transferred to, the fund the following:
All money received from the sale or lease of real property, the purchase, acquisition, or construction of which was made by an appropriation to the Employment Development Department for that specific purpose, which was amortized with federal funds paid out of the Unemployment Administration Fund.
All interest earned by the fund.
Money in the fund shall only be expended pursuant to appropriations by the Legislature.
The Employment Development Department Building Fund shall be used for the acquisition, construction, or renovation of department facilities, necessary for the director to administer this code and laws relating thereto.
ARTICLE 4.5. Benefit Audit Fund [1595. - 1596.]
There is in the State Treasury a special fund known as the Employment Development Department Benefit Audit Fund. There shall be deposited in, or transferred to, this fund those sums as specified pursuant to Section 1375.1, except all interest collected shall be deposited in this fund.
All amounts in the Benefit Audit Fund are hereby continuously appropriated without regard to fiscal years for the refund of amounts collected and erroneously deposited therein, and shall be appropriated annually in the Budget Act by the Legislature for the financing of administrative costs associated with the discovery and collection of unemployment compensation benefit overpayments.
ARTICLE 5. Investments in or Expenditures for Property [1601. - 1602.]
When money other than Disability Fund money is used in the purchase of property and in the construction of buildings, and appurtenant facilities, or in the purchase of property, or in the construction of buildings, and appurtenant facilities, for the use of the department, or for the use of the department and other state agencies, the director may do any and all things necessary to protect the property including purchasing insurance against the loss of or damage to the property or the loss of use and occupancy of the property. Any transaction entered into by the director under this section shall be subject to the approval of the Department of General Services.
The department shall comply with all federal regulations with regard to the sale of property in which the federal government has an equity.
ARTICLE 6. Employment Training Fund [1610. - 1611.5.]
There is in the State Treasury a special fund known as the Employment Training Fund. There shall be deposited in or transferred to this fund all contributions collected from employers pursuant to Section 976.6. Costs incurred for the purposes specified in Section 1611 in fiscal year 1982–83 shall be reimbursed, and thereafter shall be annually appropriated by the Legislature from the Employment Training Fund.
With the approval of the Legislature, the fund or contributions to it may be used to pay interest charged on federal loans to the Unemployment Fund.
Commencing with allocations made to the Employment Training Panel in the 1992–93 fiscal year, any moneys allocated to the panel in a fiscal year that are not encumbered by the panel in that fiscal year shall revert to the Unemployment Insurance Fund.
It is the intent of the Legislature that the panel shall closely monitor program performance and expenditures for employment training programs administered by the panel, and that the panel shall expeditiously disencumber funds that are not needed for employment training program completion. Commencing with the 1992–93 fiscal year, those moneys that are disencumbered during the fiscal year that are not reencumbered during the same fiscal year shall revert to the Unemployment Insurance Fund.
Notwithstanding any other law, the Controller may use the moneys in the Employment Training Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the Employment Training Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the Employment Training Fund was created.
Notwithstanding Section 1611, the Legislature may appropriate from the Employment Training Fund an amount specified in the annual Budget Act to fund the local assistance portion of welfare-to-work activities under the CalWORKs program, provided for pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code, as administered by the State Department of Social Services.
CHAPTER 7. Collections [1701. - 1900.]
ARTICLE 1. Priority and Lien of Tax [1701. - 1703.]
The wage earner and employer contributions required to be paid by any employing unit under this division, together with interest and penalties, shall be satisfied first in any of the following cases:
Whenever the employing unit is insolvent.
Whenever the employing unit makes a voluntary assignment of its assets.
Whenever the estate of the employing unit in the hands of the executors, administrators, or heirs is insufficient to pay all the debts due from the deceased.
Whenever the estate and effects of an absconding, concealed, or absent employing unit required to pay any amount under this division are levied upon by process of law.
Section 1701 does not give the state a preference over any lien or security interest which was recorded or perfected prior to the time when the state records or files its lien as provided in Section 7171 of the Government Code. The preference given to the state by Section 1701 is subordinate to the preferences given to claims for personal services by Sections 1204 and 1206 of the Code of Civil Procedure.
If any employing unit or other person fails to pay any amount imposed under this division at the time that it becomes due and payable, the amount thereof, including penalties and interest, together with any costs, shall be a perfected and enforceable state tax lien. This lien is subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.
For purposes of this section, amounts are “due and payable” on the following dates:
For amounts disclosed on a return or report received by the director, the date of the notice by the director to the taxpayer of the amount due.
For any amounts reestablished under Section 1875, the date of the written notice of rescission provided under subdivision (c) of that section.
For all other amounts, the date the assessment is final.
The lien provided by this section shall not arise during any period that Section 362 of the United States Bankruptcy Code applies to the employing unit or other person against whom the lien would otherwise apply.
ARTICLE 2. Liability of Successors, Officers and Fiduciaries [1731. - 1736.]
Any person or employing unit that acquires the organization, trade or business, or substantially all the assets thereof, of an employer shall withhold in trust money or other property sufficient in amount or value to cover the amount of any contributions, interest and penalties due or unpaid from such employer until such employer produces a certificate from the department stating that no contributions, interest or penalties are due. If such employer does not produce such certificate, the acquiring person or employing unit shall pay the amount or the value of the property so withheld to the department at the time of such acquisition.
Upon request of either of the parties to an acquisition as described in Section 1731, the department shall within 30 days issue a certificate, or a statement showing the amount of any contributions, interest and penalties claimed to be due. The failure to issue a certificate or a statement within the period of 30 days shall be deemed equivalent to the issuance of a certificate stating that no contributions, interest or penalties are due.
If the department issues a statement showing the amount of contributions, interest and penalties claimed to be due, the amount stated therein shall be withheld and paid to the department such amount, however, not to exceed the purchase price. The issuance of any certificate stating that no contributions, interest and penalties are due, or the failure to issue such certificate or statement within the period of 30 days shall not release the employer from liability on account of any contributions, interest and penalties then or thereafter determined to be due from him, but shall release the acquiring person or employing unit from any further liability on account of any such contributions, interest and penalties.
Any person or employing unit that fails to withhold money or other property or fails to pay the amount or value of the property withheld as provided in Sections 1731 and 1732 shall be personally liable for the payment of the contributions, interest and penalties due from the employer up to but not exceeding the purchase price. The director shall assess such amount to the acquiring person or employing unit and shall give a written notice of the assessment pursuant to Section 1206. Sections 1135, 1136, 1137, 1221, 1222, 1223, and 1224 apply to assessments under this section.
The director shall have all of the remedies for collection against any person or employing unit that acquires the organization, trade or business, or substantially all the assets thereof of an employer as are provided by this division against any employer liable for contributions, interest and penalties due. The time within which the obligation may be enforced against the person or employing unit acquiring the organization, trade or business, or substantially all the assets thereof of an employer shall start to run with the day the assessment against such person or employing unit becomes final.
Any officer, major stockholder, or other person, having charge of the affairs of a corporate, association, registered limited liability partnership or foreign limited liability partnership, or limited liability company employing unit, who willfully fails to pay contributions required by this division or withholdings required by Division 6 (commencing with Section 13000) on the date on which they become delinquent, shall be personally liable for the amount of the contributions, withholdings, penalties, and interest due and unpaid by such employing unit. The director may assess such officer, stockholder, or other person for the amount of such contributions, withholdings, penalties, and interest. The provisions of Article 8 (commencing with Section 1126) and Article 9 (commencing with Section 1176) of Chapter 4 of Part 1 apply to assessments made pursuant to this section. Sections 1221, 1222, 1223, and 1224 shall apply to assessments made pursuant to this section. With respect to such officer, stockholder, or other person, the director shall have all the collection remedies set forth in this chapter.
An individual who has been assessed under the provisions of Section 1128.1, or an officer, major stockholder, or other person having charge of the affairs of a business entity that has been assessed under the provisions of that section, shall be personally liable for the amount of contributions, withholdings, penalties, and interest due and unpaid by the employer, other than those under subdivisions (a) and (b) of Section 1128, for whom money was exchanged as described in Section 1128.1. The director may assess that person for the amount of contributions, withholdings, all penalties other than those under Section 1128, and interest. The provisions of Article 8 (commencing with Section 1126) and Article 9 (commencing with Section 1176) of Chapter 4 apply to assessments made pursuant to this section. Sections 1221, 1222, 1223, and 1224 apply to assessments made pursuant to this section. With respect to that person, the director shall have all the collection remedies set forth in this chapter.
For purposes of this section, “business entity” means a partnership, corporation, association, limited liability company, or Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code).
In addition to other penalties prescribed in this division, failure to file the notice required by Section 1090 shall cause the assignee, receiver, trustee in bankruptcy, or other representative of an insolvent employing unit, or the administrator or executor of the estate of the deceased employing unit to be personally responsible for all loss in contributions, penalties and interest attributable to such failure. This liability may be enforced by civil action in the name of the State of California against the assignee, receiver, trustee in bankruptcy, or other representative of the insolvent employing unit, and against the administrator or executor of the deceased employing unit.
ARTICLE 3. Notices of Levy [1755. - 1758.]
If any person or employing unit is delinquent in the payment of any contributions, penalties, or interest provided for in this division, the director may, not later than three years after the payment became delinquent or within 10 years after the last entry of a judgment under Article 5 (commencing with Section 1815) or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, collect the delinquency or enforce any liens by levy served either personally or by first-class mail, to any person having in their possession or under their control any credits or personal property belonging to the delinquent person or employing unit, or owing any debts to the person or employing unit at the time of the receipt of the notice of levy.
Any person other than a financial institution upon whom a notice of accounts receivable levy has been served having in their possession or under their control any credits or personal property belonging to the delinquent person or employing unit or owing any debts to the person or employing unit at the time of the receipt of the levy or coming into their possession or under their control for the period of one year from the time of receipt of the notice of accounts receivable levy, shall hold and remit the credits or personal property to the director or pay to the director the amount of any debt owing the delinquent employer after 10 but no later than 14 business days after service of the levy, and shall hold and remit the credits or personal property, or the amount of any debt owing to the delinquent employer coming into their possession or under their control within one year of receipt of the notice of accounts receivable levy after 10 but no later than 14 business days after the date of coming into possession or control of the credits or personal property, or the amount of any debt owing to the delinquent employer is incurred. Any person in possession of any credits or personal property or owing any debts to the delinquent person or employing unit who surrenders the credits or personal property or pays the debts owing the delinquent person or employing unit shall be discharged from any obligation or liability to the delinquent person or employing unit with respect to the credits or personal property surrendered or debts paid to the director.
If the levy is made on a deposit or credits or personal property in the possession or under the control of a financial institution, the notice of levy shall be served on that financial institution at the same location as legal process is required to be served pursuant to Section 684.115 of the Code of Civil Procedure, and the levy will apply to all credits or personal property in the deposit account only at the time that notice of levy is received by the financial institution. The levy of a financial institution is treated as a single event and requires the financial institution to hold and remit funds after 10 but no later than 14 business days after receipt of the notice of levy.
For purposes of this section:
“Business day” means any day other than a Saturday, Sunday, legal holiday as recognized by the Internal Revenue Service, statewide legal holiday as recognized by the State of California pursuant to Section 6700 of the Government Code, or a day in which the department is closed pursuant to Section 12b of the Code of Civil Procedure.
“Deposit account” has the same meaning as in paragraph (29) of subdivision (a) of Section 9102 of the Commercial Code.
“Financial institution” has the same meaning as in Section 481.113 of the Code of Civil Procedure.
“Legal process” has the same meaning as in Section 482.070 of the Code of Civil Procedure.
For purposes of this section, the term “address” shall mean a telephone or modem number, facsimile machine, or any other reference number designated by the financial institution to receive data by electronic means.
Notices of levy to the state, pursuant to Section 1755, shall be given to the state department, board, office or commission prior to the time it presents the claim of the person or employing unit to the State Controller.
Any person notified pursuant to Section 1755 or 1755.1 who fails or refuses to surrender any credits or other personal property, or pay any debts owing to the delinquent employer, up to the amount specified in the levy, shall be liable in his or her own person and estate to the director in an amount equal to the value of the credits or other personal property in the amount of the debt, but not exceeding the amount specified in the notice of levy, if solely by reason of such failure or refusal, the department is unable to recover the contributions, penalties, or interest owing by the person with respect to which the notice was given.
As used in this article “person” includes this State and any county, city and county, municipality, district or other political subdivision thereof.
ARTICLE 4. Warrant for Collection [1785. - 1787.]
If any amount required to be paid under this division is not paid when due, the director or the director’s authorized representative may, not later than three years after the payment became delinquent, or within 10 years after the last entry of a judgment under Article 5 (commencing with Section 1815) or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the state under this division. The warrant shall be directed to any sheriff, marshal, or peace officer of the Department of the California Highway Patrol and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution.
The department may pay or advance to the sheriff, marshal, or peace officer of the Department of the California Highway Patrol the same fees, commissions, and expenses for his or her services under this article as are provided by law for similar services pursuant to a writ of execution. The director, and not the court, shall approve the fees for publication in a newspaper.
The fees, commissions, and expenses incurred in connection with the levying and execution of a warrant are the obligation of the person or employing unit required to pay any amount under this division and may be collected from him by virtue of the warrant or in any other manner provided in this chapter for the collection of the tax.
ARTICLE 5. Summary Judgment [1815. - 1818.]
If any employing unit is delinquent in the payment of any contributions, penalties or interest provided for in this division, the director may, not later than 10 years after the payment became delinquent or within 10 years after the last entry of a judgment under this article or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, file in the office of the Clerk of the Superior Court of Sacramento County, or with the clerk of the superior court of the county in which the employer has its principal place of business, a certificate specifying the amount of the contributions, interest and penalty due and the name and last known address of the employer liable therefor. The certificate shall also contain a statement that the director has complied with all the provisions of this division in relation to the computation and levy of the contributions, interest and penalty, and a request that judgment be entered against the employer in the amount set forth in the certificate. The clerk immediately upon the filing of the certificate shall enter a judgment for the State of California against the employer in the amount set forth in the certificate. Such judgment may be filed by the clerk in a looseleaf book entitled “Unemployment Contributions Judgments.”
An abstract of a judgment secured pursuant to this article or a copy thereof may be recorded with the county recorder of any county and from the time of the recording, the amount of the judgment shall constitute a lien upon all the real property of the employer in that county, owned or acquired by him during the life of the lien. The lien shall have the force, effect and priority of a judgment lien and shall continue for 10 years after the last entry of a judgment under this article unless sooner released or otherwise discharged. The lien may, within 10 years after the last entry of a judgment under this article or within 10 years from the date of the last extension of the lien, be extended by recording a new abstract in the office of the county recorder of any county and from the time of such recording, the lien shall be extended to all the real property in such county for 10 years unless sooner released or otherwise discharged. Execution shall issue upon such a judgment upon request of the director in the same manner as execution may issue upon other judgments and sales shall be held under such execution as prescribed in the Code of Civil Procedure. In all proceedings under this section the director or his authorized agents may act on behalf of the state.
If the director determines that the amount of any contributions, interest, and penalties are sufficiently secured by a lien on other property or that the release or subordination of the lien imposed under Section 1816 will not jeopardize the collection of the amount of the contributions, interest, and penalties, the director may at any time release all or any portion of the property subject to the lien imposed by Section 1816 from the lien or may subordinate the lien imposed by Section 1816 to other liens and encumbrances.
If the director finds that the liability represented by the lien imposed under Section 1816, including any interest accrued thereon, is legally unenforceable, the director may release the lien.
A certificate by the director to the effect that any property has been released from a lien or that the lien has been subordinated to other liens and encumbrances is conclusive evidence that such property has been released or that the lien has been subordinated as provided in the certificate.
The right of the director to use the summary judgment procedure contained in this article shall be in addition to any other collection procedure contained in this division. No action taken by the director shall be construed to be an election to pursue the summary judgment procedure to the exclusion of any other collection procedure in this division.
ARTICLE 6. Civil Action [1851. - 1855.]
No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding, in any court against this State or against any officer thereof to prevent or enjoin the collection of any contribution sought to be collected under this division.
In addition to any other tax administration and collection procedures authorized in this division, the director may bring an action in the courts of this or any other state or of the United States, in the name of the State of California, to administer the provisions of, and to collect the amount of any delinquent contributions or taxes, together with penalties and interest, due under this code. No such action shall be commenced later than:
Three years after the date on which any amount due on a return or report filed by an employing unit or on an assessment made by the director becomes delinquent.
Ten years after:
The date on which a judgment is last entered under Article 5 of this chapter.
The date on which a notice of state tax lien is last recorded or filed under Section 7171 of the Government Code.
The courts of this State shall give preference on their calendar to any civil action brought by or against the director over all other civil litigation except equity cases, cases involving extraordinary writs, or summary proceedings.
In any civil action brought by or against the director a certificate under oath by the director or his authorized agent showing the delinquency shall be prima facie evidence of the levy of the contributions, of the delinquency of the amounts set forth, and of the compliance by the director with all the provisions of this division relating to the computation and levy of the amounts.
A civil action may be commenced at the request of the director in the name of the State of California to enjoin any individual or entity from conduct that, by solicitation, sale, or advertising, is inducing or otherwise attempting to persuade employers or employees, or potential employers or employees, to violate this code or to otherwise attempt to evade contributions or taxes provided for under this code by scheme, device, or similar activity. Any action under this section shall be brought in the Superior Court of the County of Sacramento or in the superior court of the county in which that individual or entity resides, has its principal place of business, or has engaged in conduct subject to penalty under this code.
In any action under subdivision (a), the court may enjoin the person from engaging in the conduct or in any other activity specified in subdivision (a), if the court finds both of the following:
That the person has engaged in any conduct specified in subdivision (a).
That injunctive relief is appropriate to prevent recurrence of that conduct.
For purposes of the civil action referred to in subdivisions (a) and (b), the court may issue without bond, a temporary restraining order upon the filing of a statement, certified by the director, which contains both of the following:
The director shall provide the court clerk with an exact copy of the certified statement upon filing, which copy will be endorsed or certified by the court clerk and returned to the director, along with a certified copy of the court’s order. From the time of service of the endorsed or certified copy of the statement and order, that individual or entity shall be temporarily restrained from the activity set forth in the statement. That temporary restraining order will continue in effect unless dissolved after a hearing on a preliminary injunction in the Superior Court of Sacramento County or the county in which the individual or entity resides, has its place of business, or has engaged in the conduct specified in the statement. That hearing or preliminary injunction shall be held under the rules of the superior court.
ARTICLE 7. Additional Remedies [1860. - 1860.]
For the purpose of collecting delinquent contributions, interest, and penalties, the director may enter into an agreement with one or more private persons, companies, associations, or corporations providing debt collection services outside this state with respect to the collection of delinquent contributions, interest, and penalties. That agreement may provide, at the discretion of the director, the rate of payment and the manner in which compensation for services shall be paid. The compensation, fees, and expenses may be added to the amount of the delinquent contributions, interest, and penalties and may be collected by the contractor from the debtor. The director shall provide the necessary information for the contractor to fulfill its obligation under the agreement.
At the discretion of the director, the contractor may, as part of the collection process, refer the debt to legal representatives for litigation in the name of the director.
No action taken by the director, pursuant to this section, shall be construed to be an election to forego other collection procedures in this division.
ARTICLE 8. Offers in Compromise [1870. - 1875.]
When an employer or any individual assessed under Section 1735 owes delinquent contributions, withholdings, penalty, or interest to the department, the director may enter into an agreement to accept partial payment in satisfaction of the full liability under the following conditions when he or she believes that it will be in the best interest of the state.
Offers in compromise shall be considered only for liabilities of inactive out-of-business accounts, and of individuals assessed under Section 1735 or partners only if the individual assessed or partner no longer has a controlling interest or association with the business that incurred the liability to which the offer in compromise applies.
The employer, individual assessed under Section 1735, or partner does not have access to current income sufficient to pay more than the accumulating interest and 6.7 percent of the liability on an annual basis.
The employer, individual assessed under Section 1735, or partner does not have reasonable prospects of acquiring increased income or assets that would enable him or her to liquidate the liability in a reasonable period.
The employer, individual assessed under Section 1735, or partner does not have assets, whether or not subjected to lien by the department, that if sold, would satisfy the liability.
The amount offered in compromise is more than the department could reasonably expect to collect through involuntary means during the four-year period beginning on the date on which a compromise agreement is tendered by the employer, individual assessed under Section 1735, or partner.
The compromise offer is submitted by the taxpayer in writing and is accompanied by cash, a cashier’s check, or money order equal to the amount offered in compromise.
Only nondisputed, final tax liabilities shall be considered for compromise.
Liabilities that arose as a result of fraud or actions that resulted in a conviction for a violation of this code shall not be compromised.
When in the director’s judgment it serves the best interest of the state, the director may permit the agreed upon amount to be paid in installments under a payment agreement not to exceed five years in length.
The employer or individual submitting an offer shall be notified in writing when an offer in compromise is accepted or rejected.
Moneys paid to the department along with an offer shall not be applied against the liability by the department until the offer has been accepted or rejected.
In the event an offer is rejected, the amount will either be applied to the liability or refunded, at the discretion of the employer or individual submitting the offer.
No agreement negotiated by the director under Section 1870 that reduces any liability by ten thousand dollars ($10,000) or more shall be effective until it is reviewed and approved by the Unemployment Insurance Appeals Board. In reviewing any agreement, the Unemployment Insurance Appeals Board shall be restricted to determining, based on the case file submitted by the director, whether the director has exercised due diligence in determining whether the conditions set forth in subdivision (a) of Section 1870 have been satisfied.
A determination by the director that it would not be in the best interest of the state to accept partial payment in satisfaction of a tax liability shall not be subject to administrative appeal or judicial review.
Once the terms of the compromise agreement are fulfilled, including payment of the amount offered, the following shall occur:
The liability shall be considered satisfied in full.
All tax liens filed or recorded, or both, in accordance with Article 1 (commencing with Section 1701) shall be released.
A statement shall be placed on file with the department containing the following information:
The taxpayer’s name and identification number.
The year or years and quarter or quarters involved.
The reason or reasons the liability was reduced by an offer in compromise.
The total amount of unpaid tax, interest, additions to tax, and penalties at issue in the compromise.
The terms of the offer in compromise.
The total amount paid under the offer in compromise.
All records of compromise required to be kept by the department may be reviewed as part of the annual single audit of the Employment Development Department.
The department shall do all of the following:
Notify the employer or individual submitting the offer in writing that the terms of the compromise agreement have been fulfilled, and that all liens filed or recorded, or both, in accordance with Article 1 (commencing with Section 1701) against the taxpayer’s interests have been released.
Furnish the employer or individual submitting the offer with a copy of the statement that is on file in accordance with paragraph (3) of subdivision (a).
For a period of one year from the date that the statement is placed on file as required under paragraph (3) of subdivision (a), the statement shall be available for public inspection. However, no lists shall be distributed by the department in connection with these statements.
In cases of joint and several liability, and where amounts are owed under Section 1735, an agreement under Section 1870 to accept partial payment in satisfaction of the liability of one or more debtors shall neither relieve any other debtors of the obligation to liquidate the entire balance of the debt remaining unpaid, nor grant to the debtor or debtors any right to appeal or seek judicial review of the director’s determination.
If an offer under Section 1870 to accept partial payment in satisfaction of the liability has been accepted, and it is subsequently determined that any person willfully did any of the following, the acceptance shall be rescinded and all compromised liabilities shall be reestablished without regard to any statute of limitations that is applicable to this division:
Concealed from any officer or employee of the state any property belonging to the estate of the employer or other person liable with respect to the tax.
Received, withheld, destroyed, mutilated, or falsified any book, document, or record.
Made any false statement relating to the estate or financial conditions of the employer or other person liable with respect to the tax.
Failed to pay any tax liability owed the department for any subsequent, active business in which the employer or individual who previously submitted the offer in compromise has a controlling interest or association.
Upon any rescission pursuant to subdivision (a), the department, at its discretion, may file a Notice of State Tax Lien against the individuals or entity responsible for the previously compromised liability.
For all rescissions under subdivision (a), the department shall notify the employer or individual who previously submitted the offer in compromise in writing of both of the following:
The rescission of any offer and reasons therefor.
The amount of reestablished liability that is due and payable.
ARTICLE 9. Penalty Assessments [1900. - 1900.]
Notwithstanding any other law, the Department of Industrial Relations may enter into an agreement with the department that provides for the transfer of all or part of the responsibility from the Department of Industrial Relations, or any office or division within that department, to the department for the collection of penalty assessments including, but not limited to, delinquent fees, wages, penalties, judgments, assessments, costs, citations, debts, and any interest thereon, arising out of the enforcement of any law within the jurisdiction of the Department of Industrial Relations or any office or division within. The agreement shall specify the terms under which those items and interest shall become subject to collection by the department.
The agreement shall also prescribe a procedure for the Department of Industrial Relations to reimburse the department for the costs of collection, and provide that the amount of any reimbursement shall not exceed the actual costs of collection, including court costs and reasonable attorney’s fees. Wherever possible the collection costs shall be borne by the debtor.
For amounts referred for collection under subdivision (a), interest shall accrue at the adjusted annual rate and by the method established pursuant to Section 685.010 of the Code of Civil Procedure from and after the date of notice until paid.
Amounts referred for collection under subdivision (a) shall be treated as final liabilities and due and payable to the State of California and may be collected from the debtor by the department in any manner authorized under the law for collection of any amount imposed under this division. Any information, information sources, enforcement remedies, and capabilities available to the Department of Industrial Relations shall be available to the department to be used in conjunction with, or independent of, the information, information sources, remedies, and capabilities available to the department for purposes of administering this code.
CHAPTER 8. Hearing Procedure [1951. - 1960.]
The manner in which disputed claims, appeals and petitions shall be presented, the reports required thereon from the claimant and from any employing unit and the conduct of hearings and appeals shall be in accordance with rules prescribed by the appeals board. The appeals board shall require administrative law judges to consolidate for hearing cases with respect to which the alleged facts and the points of law are the same. The appeals board shall permit a party or representative to participate in a hearing by telephone upon the party’s or representative’s request and showing a good cause, in accordance with regulations adopted by the board.
The appeals board and its representatives and administrative law judges are not bound by common law or statutory rules of evidence or by technical or formal rules of procedure but may conduct the hearings and appeals in such manner as to ascertain the substantial rights of the parties. A full and complete record shall be kept of all proceedings in connection with disputed claims. All testimony at any hearing held in this state upon a disputed claim arising under this division shall be recorded and, when feasible, by a reporter in shorthand or by machine writing. The testimony need not be transcribed unless the disputed claim is further appealed.
In any proceeding, hearing, investigation or in the discharge of any duties imposed under this division any member of the appeals board, an administrative law judge and any authorized employee designated by it may administer oaths, take depositions, certify to official acts and issue subpoenas to compel the attendance of witnesses and the production of books, papers, correspondence, memoranda and other records.
The presiding officer may conduct all or part of a hearing by telephone, television, or other electronic means, notwithstanding a party’s objection pursuant to Section 11440.30 of the Government Code, on a showing of good cause by the party requesting the hearing by telephone, television, or other electronic means.
Obedience to subpenas issued in accordance with this chapter may be enforced by application to the superior court as set forth in Article 2, Chapter 2, Part 1 of Division 3 of Title 2 of the Government Code.
No person shall be excused from attending and testifying or from producing books, papers, correspondence, memoranda and other records as required by a subpena issued pursuant to this chapter on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture. No individual shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise. Nothing in this section exempts any individual from prosecution and punishment for perjury committed in so testifying.
Witnesses subpoenaed pursuant to this division shall be allowed the same fees which are prescribed in Section 68093 of the Government Code relative to proceedings in the superior court. Such fees and all expenses incurred in any proceeding, hearing, review or investigation by the director or the Appeals Board or the representative of either, except charges for services by counsel or other agent representing claimant, employer, or other interested person, shall be part of the expenses of administering this division, and no individual claiming benefits shall be charged by the Appeals Board, or its representative, fees of any kind in any procedure under this division.
Any individual claiming benefits in any proceedings before the appeals board or its authorized representative may be represented by counsel or agent but no such counsel or agent shall charge or receive for such services more than an amount approved by the appeals board. Any person who violates any provision of this section shall for each such violation be fined not less than fifty dollars ($50) nor more than one thousand dollars ($1,000) or be imprisoned not more than six months or both.
The department shall make available without charge printed forms for the use of any individual claiming benefits to authorize a counsel or an agent to represent him in any proceedings before the appeals board or its administrative law judges or authorized representatives. If any claimant files an authorization for such representation with the appeals board or its administrative law judges, the appeals board or its administrative law judges shall, upon request by the claimant, serve copies of all notices and transcript pertinent to such proceedings on the claimant and his counsel or agent.
No cost shall be awarded in hearings on appeal by the Appeals Board, but if in the opinion of the Appeals Board, the claimant or an employer has acted in bad faith and without reasonable basis for appeal, a penalty not exceeding 10 percent of the amount finally awarded on the appeal may be taxed against and deducted from the award by the Appeals Board and shall be placed in the Unemployment Fund. In those cases where a penalty is assessed against an employer his account, as maintained under this act, shall be debited with the amount of the penalty so assessed.
For the purpose of any investigation, hearing or proceeding under this division, the appeals board may delegate its power in relation thereto to any deputy, administrative law judge, or other person properly authorized in writing by it.
Any finding of fact or law, judgment, conclusion, or final order made by a hearing officer, administrative law judge, or any person with the authority to make findings of fact or law in any action or proceeding before the appeals board, shall not be conclusive or binding in any separate or subsequent action or proceeding, and shall not be used as evidence in any separate or subsequent action or proceeding, between an individual and his or her present or prior employer brought before an arbitrator, court, or judge of this state or the United States, regardless of whether the prior action was between the same or related parties or involved the same facts.
CHAPTER 9. Public Employment Offices [2051. - 2061.]
The State of California accepts the provisions of the Wagner-Peyser Act, approved June 6, 1933, as amended by the Workforce Investment Act of 1998 (Public Law 105-220) passed by the Congress of the United States, and entitled “An act to provide for the establishment of a national employment system and for cooperation with the states in the promotion of the system, and for other purposes,” in conformity with Section 4 thereof, and will observe and comply with the requirements of that act.
The department is the agency of this state for the purposes of that act.
The director may cooperate with any authority of the United States having powers and duties under the Wagner-Peyser Act, and may do and perform all things necessary to secure to this State the benefits of that act in the promotion and maintenance of a system of public employment offices.
All money received by the State under the Wagner-Peyser Act and paid into the Unemployment Administration Fund shall be expended as provided by this division and by that act of Congress.
The director shall:
Establish, maintain, and operate adequately staffed public employment offices for men, women, and youth who are legally qualified to engage in gainful occupations and shall maintain a veterans’ placement service to be devoted to securing work for veterans and a farm placement service to promote the placement and clearance of agricultural labor, and a youth placement service to promote the placement of youth in suitable fields of employment. The director shall also establish and maintain a job counseling and placement service for those persons who are encountering, or may be expected to encounter difficulty in securing or keeping a job principally because of their age. The maintenance of a farm placement service shall not be required during such time as applicable federal laws provide for a system of farm labor placement financed from federal funds which is separate and apart from the general system of public employment offices. Adequate records and statistics on all the classifications specified in this subdivision shall be compiled and kept, and a report of these records, statistics, applications, and placements shall be made semiannually.
Procure, by lease or otherwise, suitable offices, and incur the necessary expenses in the conduct thereof.
It is the policy of this state to make every reasonable effort to assist men and women who are leaving active duty with the armed services of the United States in obtaining employment in the civilian workforce. These efforts shall include outreach to those service personnel who will be leaving active duty in the near future, including job seminars and job fairs at military bases.
The director shall perform the duties required by this section within existing budgetary resources of the agency within which the department operates.
Free public employment offices shall be maintained in the Cities of San Francisco, Los Angeles, Oakland and Sacramento, and, whenever the director deems it necessary, in other cities.
The director may:
Create unemployment districts.
Promulgate such rules as he finds desirable for the registration of unemployed persons, and for placing them in available employment. To this end he may accept financial contributions from any governmental unit or agency, or private persons.
For the purpose of establishing and maintaining free public employment offices, the director may enter into agreements with the Railroad Retirement Board, or any other agency of the United States charged with the administration of an unemployment compensation law, with any political subdivision of this State, or with any private, nonprofit organization, and as a part of any such agreement, may accept money, services, quarters, or other valuable consideration as a contribution to the employment service account in the Unemployment Administration Fund.
The department shall cooperate with other departments, agencies, and institutions both public and private in providing youth placement services and in the development of youth employment programs.
The department shall maintain current information on operations within the State of all types of youth employment programs such as the Youth Employment Service (Y.E.S.) and the Youth Employment Organization (Y.E.O.) plans, the work experience experimental program of the Department of Education, the Berkeley Workreation program, the effort by the Congress of Youth Coordinating Councils, and other similar programs. Upon request the department shall distribute to public and private agencies and groups information concerning any or all recognized plans for developing youth employment programs, the cooperative services offered by the various state and other public agencies in the field of youth employment, and the methods of initiating and developing such programs.
For the purpose of implementing the program set forth in Chapter 2.5 (commencing with Section 10650) of Part 2 of Division 9 of the Welfare and Institutions Code, the department may utilize funds available to provide training and placement for present and potential recipients of public assistance to the extent permitted by federal law.
It is the intent of the Legislature in adopting this section to ensure that job order information registered with the Job Service of the Employment Development Department and the One-Stop Career Centers System be shared as expeditiously and thoroughly as possible between the department’s field offices and one-stop career centers both in the local labor market and throughout the state.
The Legislature finds that job order sharing will result in better service to employers and more efficient service to job seekers.
The provisions of this section shall be subject to the limitations of federal budgetary constraints.
CHAPTER 9.5. Employment for Older Workers [2070. - 2078.]
It is the public policy of the State of California that manpower should be used to its fullest extent. This statement of policy compels the further conclusion that human beings seeking employment, or retention thereof, should be judged fairly and without resort to rigid and unsound rules that operate to disqualify significant portions of the population from gainful and useful employment. Accordingly, use by employers, employment agencies, and labor organizations of arbitrary and unreasonable rules which bar or terminate employment on the ground of age offend the public policy of this State.
As used in this chapter:
“Employee” does not include any individual employed by his parents, spouse or child or in the domestic service of any person.
“Employer” does not include any employer with less than six persons in his employ. It does include any employer with six or more employees. It also includes the State of California and any political subdivision thereof.
“Employment agency” includes any person undertaking to procure employees or opportunities to work.
“Labor organization” includes any organization that is constituted for the purpose, in whole or in part, of collective bargaining or in dealing with employers concerning grievances, terms or conditions of employment or of other mutual aid or protection in connection with employees.
“Person” includes one or more individuals, partnerships, associations, corporations, limited liability companies, legal representatives, trustees, trustees in bankruptcy or receivers.
The department shall co-operate with other departments, agencies, and institutions both public and private in providing job counseling and placement services and developing employment programs for older workers, including employment programs to protect and safeguard the right and opportunity of such workers to seek, obtain, and hold employment without discrimination or abridgement on account of age, unless based upon a bona fide occupational qualification or upon applicable security regulations established by the United States or the State of California.
The department shall formulate policies to effectuate the purposes of this chapter and make recommendations to agencies and officers of the State and of local governments in aid of such policies and purposes. Nothing herein shall modify or supersede the authority or responsibility of the State Personnel Board to enforce the provisions of the State Civil Service Act.
The department shall carry on a continuing program of education, information, research, study, and community organization concerning the problems of older workers in seeking, obtaining, and holding employment without discrimination on account of age. The department shall create such local advisory agencies as in its judgment will aid in effectuating the purposes of this section, and may empower them to study the problems of discrimination on account of age and all problems relating to employment programs for older workers, and to foster through community effort co-operation among the various groups and elements of the population of the State and to make recommendations to the department for the development of policies and procedures to carry out the purposes of this section. Such advisory agencies shall be composed of representative citizens, serving without pay.
The department shall issue such publications and such results of research and other activities as in its judgment will tend to minimize or eliminate discrimination in employment on account of age.
The age limitations of the apprenticeship programs in which the State participates shall not be considered discriminatory within the meaning of this chapter.
CHAPTER 10. Violations [2101. - 2129.]
It is a violation of this chapter to willfully make a false statement or representation, to knowingly fail to disclose a material fact, or to use a false name, false social security number, or other false identification to obtain, increase, reduce, or defeat any benefit or payment, whether for the maker or for any other person, under any of the following statutes administered by the department:
The provisions of this division.
The provisions of any unemployment insurance law of the federal government.
The provisions of any training allowance law of the federal government.
The provisions of any trade readjustment allowance law of the federal government.
The provisions of any other allowance law of the federal government.
Nothing in this section shall be construed to preclude the applicability of Section 470 of the Penal Code to any acts or omissions which violate this section.
It is a violation of this chapter to willfully make a false statement or representation or knowingly fail to disclose a material fact for the purpose of lowering or avoiding any contribution required of the maker or other person, or to avoid becoming or remaining subject to this division.
It is a violation of this chapter for any person or business entity to procure, counsel, advise, or coerce anyone to willfully make a false statement or representation, or to knowingly fail to disclose a material fact in order to lower or avoid any contribution or to avoid being or remaining subject to this division.
It is a violation of this chapter for any person or business entity to willfully aid or assist anyone in making a false statement or representation, or in knowingly failing to disclose a material fact, in order to lower or avoid any contribution, or to avoid being or remaining subject to this division.
For purposes of this section, “business entity” means a partnership, corporation, association, limited liability company, or Indian tribe, as described in Section 3306(u) of Title 26 of the United States Code, or any other legal entity.
It is a violation of this chapter for any person residing in this state to willfully make a false statement or representation or knowingly fail to disclose a material fact to obtain or increase benefits or payments under the provisions of the unemployment insurance law of any other state.
Nothing in this section shall be construed to preclude the applicability of Section 470 of the Penal Code to any acts or omissions which violate this section.
It is a violation of this chapter for any employing unit or any officer or agent of an employing unit to make a greater deduction from the wages of a worker than the contribution required of such worker under this division, for the purpose of paying any contribution required under this division.
It is a violation of this chapter for any employing unit or any officer or agent of an employing unit to willfully and unlawfully fail to appear, testify, or produce books, papers, and records, required at any hearing under this division.
It is a violation of this chapter for any employing unit or any officer or agent of an employing unit, to willfully and unlawfully fail or neglect to make available required records for the inspection of the director or his authorized representatives at any reasonable time during business hours.
It is a violation of this chapter for any employing unit, or any officer or agent of an employing unit, to willfully and unlawfully fail or neglect to furnish to the director reports required by him when necessary for the enforcement of this division.
It is a violation of this chapter for any employing unit, including a manager or managing member of a limited liability company, or any officer or agent of an employing unit or any individual to connive or conspire to aid such individual to obtain benefits to which he or she is not entitled by the willful withholding of information or by the willful failure to report any relevant information.
It is a violation of this chapter for any person to willfully fail or refuse to make any contributions which are due under this division.
The executive officer, general manager, or any other person having charge of the affairs of a corporation, association, or limited liability company who willfully fails to register such corporation, association, or limited liability company as an employing unit, or willfully fails to submit contribution returns, earning reports, or other returns and reports required by this division, or by authorized regulations, is in violation of this chapter.
Any employing unit, including any individual member of a partnership employing unit, any officer of a corporate or association employing unit, any manager or managing member of a limited liability company, or any other person having charge of the affairs of a corporate, association, or limited liability company employing unit, that knowingly withholds the deductions required by this division from remuneration paid to its workers, and willfully fails or is willfully financially unable to pay such deductions to the department on the date on which they become delinquent is in violation of this chapter.
Any employing unit, including any individual member of a partnership employing unit, any officer of a corporate or association employing unit, any manager or managing member of a limited liability company, or any other person having charge of the affairs of a corporate, association, or limited liability company employing unit, that knowingly undertakes or agrees to pay without deduction from remuneration paid to its workers the amount of any contributions to the Disability Fund required of the workers under this division and that willfully fails or is willfully financially unable to pay the amount to the department on the date on which the contributions become delinquent is in violation of this chapter.
Any employing unit, including any individual member of a partnership employing unit, any officer of a corporate or association employing unit, any manager or managing member of a limited liability company, or any other person having charge of the affairs of a corporate, association, or limited liability company employing unit, that willfully fails to withhold in trust the deductions required by this division from remuneration paid to its workers, except where such employing unit undertakes or agrees to pay without deduction from the wages of its workers the amount of worker contributions required of its workers under this division, is in violation of this chapter.
Any employing unit, including any individual member of a partnership employing unit, any officer of a corporate or association employing unit, any manager or managing member of a limited liability company, or any other person having charge of the affairs of a corporate, association, or limited liability company employing unit, that knowingly undertakes or agrees to pay without deduction from remuneration paid to its workers the amount of any contributions to the Disability Fund required of such workers under this division and that willfully fails to hold in trust the amount of worker contributions required of such workers under this division is in violation of this chapter.
Except as otherwise provided in Section 1094, and except with respect to information furnished by the department in connection with its participation as a party or as a lien claimant in a judicial or administrative proceeding, information obtained in the course of administration of this division is confidential and shall not be published or open to public inspection in any manner. Any officer or employee of the state (including its political subdivisions), or any former member, officer or employee or other individual, who in the course of his or her employment or duty has or had access to returns, reports, or documents maintained under this division, who violates this section is in violation of this chapter.
Nothing in this division shall prevent the department from accepting restitution or an acceptable arrangement for restitution, made voluntarily before the department files a criminal complaint under Section 2101 or 2102, for overpayment of benefits from any person, who has not previously claimed any right under this section, who has not been convicted of an offense under Section 2101 or 2102 within three years preceding the service under this section of a written notice of intent to file a criminal complaint and who has willfully made a false statement or representation or knowingly failed to disclose a material fact to obtain or increase any benefit under any provision of this division. The department shall by mail or personal service give the person written notice of intent to file a criminal complaint under Section 2101 or 2102 not less than 10 days prior to the filing of the criminal complaint. The department may accept restitution or an arrangement for restitution and any such acceptance shall be in lieu of any criminal action against the person, except that the department shall not be precluded from filing a criminal action against any person who defaults under an arrangement for restitution which it has accepted. For purposes of this section, no period of time during which an arrangement for restitution is in effect shall be a part of any limitation of the time for commencing a criminal action. The department shall deposit amounts received from any person under this section in the fund from which the overpayments were made.
Any individual who, with the intent to defraud, reports or registers a fictitious employer or fictitious employee, and fictitious wages, to the department in order to obtain benefits or increase any benefit or payment, whether for the maker or for any other person, is in violation of this chapter.
Any employing unit or any officer or agent of an employing unit who, with the intent to defraud, falsely reports the amount of wages earned by an employee or who falsely reports the time period in which wages are earned by an employee for the purpose of obtaining or increasing any benefit amount for that employee, is in violation of this chapter.
It is unlawful to do any of the following:
Falsely certify the medical condition of any person in order to obtain disability insurance benefits, including family temporary disability insurance benefits, whether for the maker or for any other person.
Knowingly present or cause to be presented any false or fraudulent written or oral material statement in support of any claim for disability insurance including family temporary disability insurance benefits.
Knowingly solicit, receive, offer, pay, or accept any rebate, refund, commission, preference, patronage, dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for soliciting a claimant to apply for disability insurance including family temporary disability insurance benefits unless the payment is lawful pursuant to Section 650 of the Business and Professions Code.
Knowingly assist, abet, solicit, or conspire with any person who engages in an unlawful act under this section.
Any person who, with or without intent to evade any requirement of this code or any lawful requirement of the department under this code, fails to file any return or report, or to supply any information required by this code or who, with or without like intent, makes, renders, signs, or verifies any false or fraudulent return, report, or statement, or supplies any false or fraudulent information, is liable for a civil penalty of not more than one thousand dollars ($1,000), and is also guilty of a misdemeanor and shall, upon conviction, be fined an amount not to exceed one thousand dollars ($1,000), or be imprisoned for not more than one year, or both the fine and imprisonment, at the discretion of the court.
Any person who, within the time required by this code, willfully fails to file any return or report, or to supply any information with intent to evade any tax imposed by this code, or who, willfully and with like intent, makes, renders, signs, or verifies any false or fraudulent return, report, or statement or supplies any false or fraudulent information, is punishable by imprisonment in the county jail not to exceed one year, or in the state prison, or by a fine of not more than twenty thousand dollars ($20,000), or by both the fine and imprisonment, at the discretion of the court.
Any person or employer who, with or without intent to evade, fails to withhold, pursuant to Section 13020, or fails to pay over any tax withheld, is guilty of a misdeameanor and, upon conviction, shall be fined an amount not to exceed one thousand dollars ($1,000), or imprisoned for not more than one year, or both the fine and imprisonment, at the discretion of the court.
Any person required by this code to collect, account for, and pay over any tax or amount required to be withheld who willfully fails to collect or truthfully account for and pay over the tax or amount shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined an amount not more than twenty thousand dollars ($20,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both the fine and imprisonment, at the discretion of the court.
Any person or employer required under Section 13050 to furnish a statement who willfully furnishes a false or fraudulent statement or who willfully fails to furnish a statement in the manner, at the time, and showing the information required under Section 13050, or regulations prescribed thereunder, is in violation of this chapter.
Any individual required to supply information to his or her employer under Section 13040, 13041, or 13042, who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder which would require an increase in the tax to be withheld under Section 13020, is in violation of this chapter.
Any person who willfully aids or assists in, or procures, counsels, advises, or coerces anyone in the preparation or presentation under, or in connection with any matter arising under, this code, of a return, report, affidavit, claim, or other document, that is fraudulent or is false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the person authorized or required to present the return, report, affidavit, claim, or document is in violation of this chapter.
Except as provided in Sections 2117, 2117.5, 2118, and 2118.5, a violation of this chapter is punishable by imprisonment in the county jail not to exceed one year, or in the state prison, or by a fine of not more than twenty thousand dollars ($20,000), or by both the fine and imprisonment, at the discretion of the court.
Any fine imposed by the court pursuant to this chapter, except for fines imposed under Sections 2101 and 2102, shall be paid to the office of the prosecutor bringing the complaint, but if the case was referred to the prosecutor by the department, or some other governmental unit, one-half of the criminal fine shall be paid to that governmental unit.
The certificate of the department to the effect that a return or report has not been filed or that information has not been supplied as required by Division 6 (commencing with Section 13000) is prima facie evidence that the return or report has not been filed or that the information has not been supplied.
The place of trial for offenses enumerated in this chapter shall be in any of the following:
The county of residence or principal place of business of the defendant or defendants.
Any county where the defendant or defendants were transacting business that resulted in the alleged offenses.
Any county where any money or property from the alleged offenses was obtained.
If none of the counties under subdivision (a) are applicable, then the place of trial for offenses enumerated in this chapter shall be in the County of Sacramento.
Any action or prosecution under this chapter shall be instituted within four years after the discovery of the offense.
Any person or employing unit convicted under this chapter may be charged the costs of investigation and prosecution at the discretion of the court.
The prosecutor may, with the consent of the department, compromise any penalty for which he or she may bring an action under this chapter. The penalties provided by this chapter are additional to all other penalties provided in this code and Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.
Any employer or agent of an employer who provides a wage statement or similar document to any undocumented worker or former undocumented worker at that person’s request for the purpose of documenting that person’s eligibility for legalization pursuant to the federal Immigration Reform and Control Act (Public Law 99-603), shall not be liable for any penalty or criminal or civil violation under this division relative to any undocumented worker or former undocumented worker based on any facts disclosed in the wage statement or similar document so provided.
Nothing in this section shall be construed to limit the liability under any provision of law of any person who engages in the procurement or production of false or fraudulent wage statements or similar documents to any person for purposes of legalization under the federal Immigration Reform and Control Act.
This section does not apply to penalties assessed or criminal actions filed prior to May 1, 1987.
This section does not apply where the Employment Development Department, through independent means, discovers that an employer has withheld personal income tax and disability insurance contributions from workers’ paychecks and has not remitted those moneys to the department.
The immunity from liability pursuant to this section shall apply only to facts disclosed in the wage statement or similar document provided commencing on or after the effective date of this section and only until the date of the termination of the legalization provisions for agricultural and nonagricultural workers of the federal Immigration Reform and Control Act. However, the immunity from liability pursuant to this section shall continue until the cause of action is tolled by the applicable statute of limitations.
For the purposes of this chapter, “person” includes, a claimant for benefits and any officer, employee, director, partner, or agent having charge of the affairs of any employer or employing unit with regard to the violation which occurred. “Person” also includes both natural persons and legal entities. More than one person may be charged with violations under this chapter, where control of the affairs of the employing unit, or employer, is shared by more than one person.
PART 2. DISABILITY COMPENSATION [2601. - 3308.]
CHAPTER 1. General Provisions [2601. - 2615.]
The purpose of this part is to compensate in part for the wage loss sustained by any individual who is unable to work due to the employee’s own sickness or injury, the sickness or injury of a family member, or the birth, adoption, or foster care placement of a new child, and to reduce to a minimum the suffering caused by unemployment resulting therefrom. This part shall be construed liberally in aid of its declared purpose to mitigate the evils and burdens that fall on the unemployed worker and his or her family.
Except as otherwise provided, the provisions and definitions of Part 1 (commencing with Section 100) of this division apply to this part. In case of any conflict between the provisions of Part 1 and the provisions of this part, the provisions of this part shall prevail with respect to unemployment compensation disability benefits, and the provisions of Part 1 shall prevail with respect to unemployment compensation benefits.
The provisions of Chapter 6 (commencing with Section 1501) of Part 1, of this division do not apply to this part.
Disability benefits paid pursuant to this part shall not be charged against an employer’s account maintained pursuant to Article 4 of Chapter 4, Part 1 of this division.
Whenever the Director of Employment Development believes that a change in contributions rate or disability benefit amounts may become necessary to protect the solvency of the Disability Fund, he shall at once inform the Governor and the Legislature thereof and make recommendations accordingly. In such case the Governor may declare an emergency and authorize the Director of Employment Development to announce a modified scale of benefits or increased waiting period, or other changes in regulations regarding the eligibility for payment of benefits which the Director of Employment Development may deem necessary to assure the solvency of the Disability Fund; such modified regulations to be in effect until the Governor declares the emergency at an end or until further action is taken by the Legislature.
If at any time the Secretary of Labor or other higher authority rules or determines that any section of this part is not in conformity with the provisions of Title III of the Social Security Act or Section 3302 and Section 3303 of the Federal Unemployment Tax Act by reason of any provision contained in this part, such section shall be immediately inoperative.
“Employment” for the purposes of this part means:
Service for a hospital established, maintained and operated pursuant to Division 23 (commencing with Section 32000) of the Health and Safety Code.
Service performed for a public housing administration agency whether operated by state or local governmental subdivisions.
Service performed by a state employee to the extent provided by Section 2781.
Service covered under this part by an elective coverage agreement.
Notwithstanding any other provision of this division, all service performed in the employ of a corporation, community chest, fund, or foundation, in connection with the operation of a health facility as defined in Section 1250 of the Health and Safety Code including the institutions described in subdivision (a) of Section 1270 of the Health and Safety Code but not including county hospitals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office and which is exempt from income tax under Section 501(a) of the Internal Revenue Code of 1954, except service performed by an individual as a duly ordained priest, clergyman, rabbi, rector, vicar, pastor, or minister of religion, or by a practitioner who heals the sick by prayer in the practice of religion, or by a reader whose duty it is to conduct regular religious services of a religious organization, or by a member of a religious order in the exercise of duties required by the order, or by any other individual performing service in the practice of religion by designation of the governing body of a religious organization and subject to discipline by, including removal by, the governing body.
This section shall become operative on July 1, 1978.
Notwithstanding Section 632, “employment” for purposes of this part also means service performed as a clerk-carrier in the employ of the United States Postal Service, to the extent Congress permits this part to be applicable to the postal service, and if Congress permits the states to require the postal service to withhold workers’ contributions and to transmit those contributions into a state fund for unemployment compensation disability benefits.
“Employment” for purposes of this part also means domestic service in a private home, local college club, or local chapter of a college fraternity or sorority performed for an employing unit which pays wages in cash of seven hundred fifty dollars ($750) or more to individuals employed in such service during any calendar quarter in the calendar year or the preceding calendar year.
“Employment” for purposes of this part also means domestic service comprising in-home supportive services under Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of the Welfare and Institutions Code, performed for an employing unit which pays wages in cash of seven hundred fifty dollars ($750) or more to individuals employed in such service during any calendar quarter in the calendar year or preceding calendar year, and is one of the following:
The recipient of such services, if the state or county makes or provides for direct payment to a provider chosen by the recipient or to the recipient of such services for the purchase of services, subject to the provisions of Section 12302.2 of the Welfare and Institutions Code.
The individual or entity with which a county contracts to provide in-home supportive services.
Any county which hires and directs in-home supportive personnel in accordance with established county civil service requirements or merit system requirements for those counties not having civil service systems.
“Disability benefit period,” with respect to any individual, means the continuous period of unemployment and disability beginning with the first day with respect to which the individual files a valid claim for unemployment compensation disability benefits. For the purposes of this part, two consecutive periods of disability due to the same or related cause or condition and separated by a period of not more than 60 days shall be considered as one disability benefit period.
This section shall become operative on July 1, 2016.
“Valid claim” means any claim for unemployment compensation disability benefits made in accordance with the provisions of this code and rules and regulations adopted thereunder if the individual is unemployed and disabled and has been paid wages in employment for employers necessary to qualify for benefits under Section 2652.
“Disability base period,” with respect to an individual who does not have an unexpired benefit year for unemployment compensation benefits, means for disability benefit periods beginning in October, November, or December, the four calendar quarters ended in the next preceding month of June; the disability base period for disability benefit periods beginning in January, February, or March, shall be the four calendar quarters ended in the next preceding month of September; the disability base period for disability benefit periods beginning in April, May, or June, shall be the four calendar quarters ended in the next preceding month of December; the disability base period for disability benefit periods beginning in July, August, or September shall be the four calendar quarters ended with the next preceding month of March.
“Disability base period,” with respect to an individual who has an unexpired benefit year for unemployment compensation benefits, shall be:
The same as the disability base period in Section 2610 if the individual has sufficient qualifying earnings in that disability base period.
The same as the base period used to establish the benefit year for unemployment compensation benefits if the individual does not have sufficient qualifying earnings in the disability base period in Section 2610.
Notwithstanding any other provision of law, except as provided in subdivision (b) of Section 2611, in determining the benefit rights of any person who cannot establish a valid claim pursuant to Section 2652 because he or she is unemployed during the normal disability base period established pursuant to Section 2610, there shall be excluded from the disability base period those quarters during which the person performed no services in employment for 60 days or more and was actively seeking work. For all quarters so excluded, there shall be substituted an equal number of quarters immediately preceding the commencement of the normal disability base period. Benefit rights under this section shall terminate for any disability benefit period that begins when the substitution quarters no longer contain sufficient wages to establish a valid claim under Section 2652.
The Director of Employment Development shall develop and maintain a program of education concerning disability insurance rights and benefits.
The director shall provide to each employer of employees subject to this part a notice informing workers of their disability insurance rights and benefits due to sickness, injury, or pregnancy. The notice shall be given by every employer to each new employee hired on or after June 1, 1988, and to each employee leaving work due to pregnancy or nonoccupational sickness or injury on or after July 1, 1989.
Commencing January 1, 2004, the director shall provide to each employer of employees subject to this part a notice informing workers of their disability insurance rights and benefits due to the employee’s own sickness, injury, or pregnancy, or the employee’s need to provide care for any sick or injured family member, or the employee’s need to bond with a minor child within the first year of the child’s birth or placement in connection with foster care or adoption. The notice shall also instruct the employee to provide notification of the reason for taking leave in a manner consistent with company policy. The notice shall be given by every employer to each new employee hired on or after January 1, 2004, and to each employee leaving work on or after July 1, 2004, due to pregnancy, nonoccupational sickness or injury, or the need to provide care for any sick or injured family member, or the need to bond with a minor child within the first year of the child’s birth or placement in connection with foster care or adoption.
The director shall report to the Assembly Committee on Insurance, Assembly Committee on Labor and Employment, and the Senate Committee on Labor, Public Employment and Retirement by June 30 of each year on the department’s fraud deterrence and detection activities.
The department shall assess the effectiveness of the department’s system of cross matching claims against information about incarcerated individuals. The assessment shall include how regularly the department performs the cross matches, how successful the cross matches are in detecting and preventing fraud, and whether the cross matches negatively affect eligible claimants attempting to legally obtain benefits. The department shall include this assessment in its annual report on fraud deterrence and detection activities. Details on fraud methods and tools may be generalized, excluded, or redacted to protect the fraud deterrence practices of the department.
The department, in the administration of this part, shall collect demographic data for individuals who claim disability benefits under Chapter 2 (commencing with Section 2625) or family temporary disability insurance benefits under Chapter 7 (commencing with Section 3300), including race and ethnicity data and sexual orientation and gender identity data. The department shall implement the requirements of this section by July 1, 2026.
The department shall collect race and ethnicity data using standardized federal race and ethnicity categories from the federal Office of Management and Budget’s “Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity.”
The department shall also collect subgroup data for race and ethnicity subgroups that aggregate to the federal Office of Management and Budget categories.
The department shall collect subgroup data for Hispanic or Latino individuals in a manner that is at least as detailed as that required by the 2011 federal standards for health care surveys, entitled “U.S. Department of Health and Human Services Implementation Guidance on Data Collection Standards for Race, Ethnicity, Sex, Primary Language, and Disability Status,” allowing individuals to not only self-identify as Hispanic or Latino but to also self-identify as Mexican, Mexican American, Chicano; Puerto Rican; Cuban; or other Hispanic or Latino origin.
Individuals who choose the residual category “other Hispanic or Latino origin” shall be given the opportunity to specify the group with which they self-identify.
The department shall collect subgroup data for Asian and Pacific Islander individuals in a manner that provides for data reporting that is at least as detailed as that required by paragraphs (1) and (2) of subdivision (a) of Section 8310.5 of the Government Code for Asian and Pacific Islander individuals, allowing individuals to not only self-identify as Asian or Pacific Islander but to also self-identify as a member of one of the Asian or Pacific Islander subgroups specified in paragraphs (1) and (2) of subdivision (a) of Section 8310.5 of the Government Code or to choose a residual category of “other Asian” or “other Pacific Islander.”
Individuals who choose the residual categories “other Asian” or “other Pacific Islander” shall be given the opportunity to specify the group with which they self-identify.
The department shall collect sexual orientation and gender identity data in accordance with Section 8310.8 of the Government Code.
The department shall adopt demographic data collection standards, procedures, and processes to implement this section. As the federal Office of Management and Budget’s race and ethnicity categories and standards evolve, the department shall update demographic data collection standards, procedures, and processes in accordance with any new minimum federal Office of Management and Budget race and ethnicity categories or standards, including, but not limited to, those pertaining to Middle Eastern and North African populations and the manner in which race and ethnicity questions are sequenced or combined.
The department shall develop and make available online a public-facing dashboard that publishes disaggregated demographic data pertaining to program participation by individuals and is updated on at least a quarterly basis. The department shall benchmark that information to relevant demographic population estimates to ascertain whether program enrollment by members of the state’s various demographic groups is consistent with, or departs from, their share of the appropriate estimated population benchmarks. For race and ethnicity demographic data, such benchmarks shall be determined using population estimates for the federal Office of Management and Budget categories initially specified in subdivision (b) and subsequently specified pursuant to subdivision (e). Wherever available, additional benchmarks shall also be used for population estimates for the subgroup categories specified pursuant to subdivision (c).
CHAPTER 2. Disability Benefits [2625. - 2778.]
ARTICLE 1. Eligibility [2625. - 2630.]
Unemployment compensation disability benefits are payable from the Disability Fund to individuals who are eligible to receive such benefit payments under this part.
An individual shall be deemed disabled on any day in which, because of his or her physical or mental condition, he or she is unable to perform his or her regular or customary work.
For purposes of this section, “disability” or “disabled” includes:
Illness or injury, whether physical or mental, including any illness or injury resulting from pregnancy, childbirth, or related medical condition.
Inability to work because of a written order from a state or local health officer to an individual infected with, or suspected of being infected with, a communicable disease.
Acute alcoholism being medically treated or, to the extent specified in Section 2626.1, resident status in an alcoholic recovery home.
Acute drug-induced illness being medically treated or, to the extent specified in Section 2626.2, resident status in a drug-free residential facility.
An individual who is a resident in an alcoholic recovery home pursuant to referral or recommendation by a physician shall be eligible for disability benefits for a period not in excess of 30 days in any disability benefit period while receiving resident services, if an authorized representative of the alcoholic recovery home certifies that the individual is a resident participating in an alcoholic recovery program which has been certified by the State Department of Health Care Services. The individual shall be eligible for disability benefits for an additional period not in excess of 60 days if the referring physician certifies to the need of the individual for continuing resident services.
The department shall reimburse the State Department of Health Care Services from the Disability Fund, in a reasonable amount as determined by the department, for the expense of reviewing any alcoholic recovery program, as required by the department in the administration of subdivision (a) which is not funded in the county alcohol program plan provided for in Article 3 (commencing with Section 11810) or Article 4 (commencing with Section 11830) of Part 2 of Division 10.5 of the Health and Safety Code.
Outside the State of California, an individual who is a resident in an alcohol recovery home pursuant to referral or recommendation by a physician shall be eligible for disability benefits for a period not in excess of 30 days in any disability benefit period while receiving resident services, if an authorized representative of the alcoholic recovery home certifies that the individual is a resident participating in an alcoholic recovery program, licensed by or satisfying a program review by the state in which the facility is located. The individual shall be eligible for disability benefits for an additional period not in excess of 60 days if the referring physician certifies to the need of the individual for continuing resident services.
An individual who is a resident in a drug-free residential facility pursuant to referral or recommendation by a physician shall be eligible for disability benefits for a period not in excess of 45 days in any disability benefit period while receiving resident services, if an authorized representative of the drug-free residential facility certifies that the individual is a resident participating in a drug-free residential facility which has satisfied a program review by the State Department of Health Care Services. The individual shall be eligible for disability benefits for an additional period not in excess of 45 days if the referring physician certifies to the need of the individual for continuing resident services.
The department shall reimburse the State Department of Health Care Services from the Disability Fund, in a reasonable amount as determined by the department, for the expense of reviewing any drug-free residential facility, as required by the department in the administration of subdivision (a), which is not funded under the federal Drug Abuse Office and Treatment Act of 1972 (Public Law 92-255) or in conformance with Article 2 (commencing with Section 11975) of Chapter 2 of Part 3 of Division 10.5 of the Health and Safety Code.
Outside the State of California, an individual who is a resident in a drug-free residential facility pursuant to referral or recommendation by a physician shall be eligible for disability benefits for a period not in excess of 45 days in any disability benefit period while receiving resident services, if an authorized representative of the drug-free residential facility certifies that the individual is a resident participating in a drug-free residential program, licensed by or satisfying a program review by the state in which the facility is located. The individual shall be eligible for disability benefits for an additional period, but not in excess of 45 days, if the referring physician certifies to the need of the individual for continuing resident services.
A disabled individual is eligible to receive disability benefits equal to one-seventh of his or her weekly benefit amount for each full day during which he or she is unemployed due to a disability only if the director finds that:
He or she has made a claim for disability benefits as required by authorized regulations.
He or she has been unemployed and disabled for a waiting period of seven consecutive days during each disability benefit period with respect to which waiting period no disability benefits are payable.
The waiting period requirement shall not apply to a person who has met the waiting period requirements on the initial claim for disability benefits when that person files a subsequent claim for disability benefits for the same or a related cause or condition within 60 days after the original disability benefit period.
The director shall report to the Legislature regarding the effect of the modified waiting period in paragraph (2) of subdivision (b) on or before January 1, 2020, and may submit subsequent reports thereafter. The report shall be submitted in compliance with Section 9795 of the Government Code.
This section shall become operative on July 1, 2016.
An individual is not eligible for disability benefits with respect to any period for which the director finds that he has received or is entitled to receive unemployment compensation benefits under Part 1 of this division or under an unemployment compensation act of any other state or of the Federal Government.
Except as provided in this section, an individual is not eligible for disability benefits under this part for any day of unemployment and disability for which he or she has received, or is entitled to receive, “other benefits” in the form of cash payments.
“Other benefits,” as used in this section and Section 2629.1, means any of the following:
Temporary disability indemnity under a workers’ compensation law of this state or of any other state or of the federal government.
Temporary disability benefits under any employer’s liability law of this state or of any other state or of the federal government.
Permanent disability benefits for the same injury or illness under the workers’ compensation law of this state, any other state, or the federal government.
If these “other benefits” are less than the amount an individual would otherwise receive as disability benefits under this part, he or she shall be entitled to receive, for that day, if otherwise eligible, disability benefits under this part reduced by the amount of these “other benefits.”
An individual shall be entitled to receive, for any day, if otherwise eligible, disability benefits under this part reduced by the amount of the permanent disability indemnity if the permanent disability indemnity is less than the amount an individual would otherwise receive as disability benefits under this part.
Nothing in Section 2629 shall be construed to authorize the delay of payment of unemployment compensation disability benefits except where the claimant is currently in receipt of other benefits or where the department has received notice that the claimant’s employer or insurer has agreed to commence the payment of other benefits.
Notwithstanding Section 2701.5, payments shall commence within 14 days after notice to the employer or insurer under this section unless the employer or insurer has either paid or has agreed to commence the payment of other benefits.
Upon the filing of a claim for unemployment compensation disability benefits, the department shall make an initial determination as to the claimant’s entitlement to other benefits for purposes of Section 2629.
The department shall notify the claimant and the claimant’s employer if it determines that the claimant is entitled to other benefits.
The notice to the claimant shall inform the claimant that disability benefits will be paid pending receipt of other benefits if the employer fails to agree to pay these other benefits within 14 days of notification of industrial injury and shall advise the claimant of the provisions of Section 2629.
The department shall also include with the claimant’s notice a pamphlet to be provided by the Department of Industrial Relations which meets the criteria specified in subdivision (b) of Section 139.6 of the Labor Code.
The notice to the employer shall constitute a claim for compensation and knowledge of an injury for purposes of Section 5402 of the Labor Code, and shall inform the employer of its potential liability for interest and penalties under this section.
If the employer or the insurance carrier disputes liability for the payment of other benefits, or the extent thereof, the department’s right to reimbursement shall be subject to the jurisdiction of the Workers’ Compensation Appeals Board in accordance with Part 4 (commencing with Section 5300) of Division 4 of the Labor Code.
An employer or insurance carrier who subsequently assumes liability or is determined to be liable for reimbursement to the department for unemployment compensation disability benefits which the department has paid in lieu of other benefits shall be assessed for this liability by the department. In addition, the employer shall pay the department interest on the disability benefits at the annual rate provided in Section 19521 of the Revenue and Taxation Code. The employer shall also pay a penalty of 10 percent of the amount reimbursed to the department if the Workers’ Compensation Appeals Board finds that the failure of the employer to pay other benefits upon notice by the department under this section was unreasonable and a penalty has not been awarded for the delay under Section 5814 of the Labor Code. All funds received by the department pursuant to this section shall be deposited in the Disability Fund.
The employer shall reimburse the department in accordance with subdivision (e) within 60 days of either voluntarily accepting liability for other benefits or after a final award, order, or decision of the Workers’ Compensation Appeals Board.
To the extent permitted by federal law, excludable restitution payments, as defined in Section 17131.1 of the Revenue and Taxation Code, and excludable settlement payments, as defined in Section 17131.2 of the Revenue and Taxation Code, may not be applied to reduce the amount of disability benefits to which an individual may otherwise be entitled under law.
The Department of Child Support Services shall periodically notify the department of individuals who are certified, as provided in Section 17518 of the Family Code, as having support obligations, as defined by subdivision (g) and notify the department of any changes in the status of these individuals to ensure that the department has a current record.
Upon receipt of the notifications referred to in subdivision (a), the department shall determine whether the individuals have claims for unemployment compensation disability benefits, either with the department or under an approved voluntary plan.
If the department determines that an individual referred to in subdivision (a) has a claim for unemployment compensation disability benefits with an approved voluntary plan, it shall notify the voluntary plan payer. When the Department of Child Support Services notifies the department of any changes in the individual’s status as to his or her support obligations, the department shall in turn notify the voluntary plan payer. Upon notification from the department, the voluntary plan payer shall deduct and withhold the amounts specified in Section 17518 of the Family Code from the unemployment compensation disability benefits that would otherwise be payable to the individual. For each withholding, the voluntary plan payer shall deduct an amount which represents the amount withheld for support obligations and may also deduct an administrative fee representing actual costs, not to exceed two dollars ($2). In no event shall the withholding and the administrative fee exceed 25 percent or a lesser amount as specified in subdivision (e) of Section 17518 of the Family Code. The voluntary plan payer shall pay the amounts for support deducted and withheld pursuant to this section to the appropriate certifying county.
The department shall maintain a current record of individuals certified as owing support obligations. If the department determines that the individual has a claim for unemployment compensation disability benefits with the department, it shall deduct and withhold the amounts specified in Section 17518 of the Family Code from the unemployment compensation disability benefits that would otherwise be payable to the individual. The department shall periodically pay the amounts deducted and withheld to the appropriate county or to the Department of Child Support Services as the assigned payee, as stipulated by mutual agreement, in the interagency agreement between the department and the Department of Child Support Services.
Amounts deducted and withheld from an individual’s unemployment compensation disability benefits in accordance with subdivision (c) or (d) shall for all purposes be treated as if it were paid to the individual and then paid by the individual to the Department of Child Support Services or the appropriate certifying county.
This section shall apply only if appropriate arrangements are made for the Department of Child Support Services to reimburse the department for its administrative costs for performing the functions required of it by this section.
For purposes of this section, “support obligations” means the child and related spousal support obligations described in the state plan approved pursuant to Section 454 of the Social Security Act and as that section may hereafter be amended. However, to the extent “related spousal support obligations” may not be collected from unemployment compensation under federal law, those obligations shall not be included in the definition of support obligations under this section.
ARTICLE 2. Computation (Amount and Duration) [2652. - 2658.]
An individual cannot establish a valid claim unless he has during his disability base period been paid wages for employment by employers of not less than three hundred dollars ($300).
Except as provided in Sections 708 and 708.5, the maximum amount of benefits payable to an individual during any one disability benefit period shall be 52 times his or her weekly benefit amount, but in no case shall the total amount of the benefits payable be more than the total wages paid to the individual during his or her disability base period. If the benefit is not a multiple of one dollar ($1) it shall be computed to the next higher multiple of one dollar ($1).
This section shall apply to periods of disability commencing on or after January 1, 1984.
For the purpose of this article wages due to any individual but unpaid within the time limit provided by law, shall be deemed wages paid to such individual.
Except as provided in subdivisions (b), (c), (d), (e), and (f), an individual’s “weekly benefit amount” shall be the amount appearing in column B in the table set forth in this subdivision on the line of which in column A of the table there appears the wage bracket containing the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which wages were the highest.
For periods of disability commencing on or after January 1, 1990, and prior to January 1, 1991, if the amount of wages paid an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest exceeds one thousand seven hundred forty-nine dollars and twenty cents ($1,749.20), the weekly benefit amount shall be 55 percent of these wages divided by 13, but not exceeding two hundred sixty-six dollars ($266) or the maximum workers’ compensation temporary disability indemnity weekly benefit amount, whichever is less. If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For periods of disability commencing on or after January 1, 1991, but before January 1, 2000, if the amount of wages paid an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest exceeds one thousand seven hundred forty-nine dollars and twenty cents ($1,749.20), the weekly benefit amount shall be 55 percent of these wages divided by 13, but not exceeding three hundred thirty-six dollars ($336). If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For periods of disability commencing on or after January 1, 2000, but before January 1, 2018, if the amount of wages paid an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest exceeds one thousand seven hundred forty-nine dollars and twenty cents ($1,749.20), the weekly benefit amount shall be equal to 55 percent of these wages divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount.
Notwithstanding the maximum workers’ compensation temporary disability indemnity weekly benefit amount of paragraph (1), if the benefit under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For periods of disability commencing on and after January 1, 2018, but before January 1, 2025, an individual’s “weekly benefit amount” shall be as follows:
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is less than nine hundred twenty-nine dollars ($929), then fifty dollars ($50).
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is nine hundred twenty-nine dollars ($929) or more, and is less than one-third of the amount of the state average quarterly wage, then 70 percent of the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13. If the weekly benefit amount is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
Except as provided in paragraph (4), when the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is one-third of the amount of the state average quarterly wage, or more, then either (A) 23.3 percent of the state average weekly wage or (B) 60 percent of the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest divided by 13, whichever amount is greater. If the weekly benefit amount is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
An individual’s “weekly benefit amount” shall not exceed the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.
For periods of disability commencing on or after January 1, 2025, the weekly benefit amount shall be as follows:
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is less than seven hundred twenty-two dollars and fifty cents ($722.50), then fifty dollars ($50).
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is more than 70 percent of the state average quarterly wage, the weekly benefit amount shall be equal to the greater of 70 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code, or 63 percent of the state average weekly wage.
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is seven hundred twenty-two dollars and fifty cents ($722.50) or more, but 70 percent or less than the state average quarterly wage, then the weekly benefit amount shall be equal to 90 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.
Notwithstanding the maximum workers’ compensation temporary disability indemnity weekly benefit amount of paragraph (1), if the benefit under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
For purposes of this section:
“State average quarterly wage” means the state average weekly wage multiplied by 13.
“State average weekly wage” means the average weekly wage paid by employers to employees covered by unemployment insurance as reported by the United States Department of Labor for California for the 12 months ending on March 31 of the calendar year preceding the year in which the disability occurred.
An individual eligible to receive disability benefits who receives wages or regular wages from his or her employer during the period of his or her disability or period of family care leave shall be paid disability benefits for any seven-day week or partial week in an amount not to exceed his or her maximum weekly amount which together with the wages or regular wages does not exceed his or her weekly wage, exclusive of wages paid for overtime work, immediately prior to the commencement of his or her disability or period of family care leave.
For purposes of this section, to determine the wages or regular wages received by the eligible individual, the amount as stated by the individual shall be presumed to be accurate. This presumption is one affecting the burden of producing evidence.
Except as provided in subdivision (g) of Section 3303, for purposes of periods of disability commencing on or after January 1, 1992, vacation pay is not considered wages for determining eligibility for disability benefits.
If the remuneration of an individual is not based upon a fixed period or duration of time or if the individual’s wages are paid at irregular intervals or in such manner as not to extend regularly over the period of employment, the wages for any week or for any calendar quarter for the purpose of computing an individual’s right to disability benefits shall be determined pursuant to authorized regulations. The regulations shall, so far as possible, secure results reasonably similar to those which would prevail if the individual were paid his wages at regular intervals.
Notwithstanding any inconsistent provisions in this part, except as provided in subdivision (b) of Section 2611, in determining the benefit rights of any person who was involved in a trade dispute during the disability base period, as determined pursuant to Section 2610, there shall be excluded from the disability base period those quarters during which the person performed no services in employment for 60 days or more as a result of a trade dispute. For all quarters so excluded there shall be substituted an equal number of quarters immediately preceding the commencement of the trade dispute. In the event the disability base period so determined includes wages in calendar quarters for which the records have been destroyed under proper approval, a claimant may establish the amount of wages by affidavit in accordance with authorized regulations. The quarter of commencement of the trade dispute shall be counted as a completed quarter if the director finds that the inclusion thereof would be more equitable to the claimant.
ARTICLE 3. Disqualifications [2675. - 2681.]
An individual shall be disqualified from receiving benefits under this part if he or she has willfully, for the purpose of obtaining benefits, either made a false statement or representation, with actual knowledge of the falsity thereof, or withheld a material fact in order to obtain any benefits under this part.
An individual disqualified under subdivision (a) under a determination transmitted to him or her by the department, shall be ineligible to receive benefits from the date the disqualifying determination was issued and for not less than seven nor more than 35 subsequent days for which he or she is otherwise eligible for benefits under this part. When successive disqualifications under subdivision (a) occur, the director may extend the period of ineligibility for an additional period not to exceed 56 days.
If all or any of the assessed days of ineligibility cannot be served because the individual is no longer otherwise eligible for benefits under this part, the assessed days of ineligibility shall be applied to any subsequent disability benefit period for which he or she is otherwise eligible for benefits. No disqualification under this subdivision shall be applied, however, to any day of eligibility which falls beyond the three-year period next succeeding the date upon which the determination was mailed or served by the department.
The amendments made to this section by the act adding this subdivision shall apply to disqualifying determinations issued on or after January 1, 1992.
An individual who is disqualified from receiving unemployment compensation benefits under Sections 1256, 1257, 1260, 1261, and 1263 shall be presumed to be ineligible to receive disability benefits under this part for the same period or periods unless he or she establishes to the satisfaction of the director that he or she is suffering a bona fide illness or injury or claiming a period of family care leave and the director finds that there is good cause for paying disability benefits.
An individual who is otherwise eligible for benefits under this part shall not be disqualified from receiving such benefits because of a disqualification from receiving unemployment compensation benefits under Section 1262.
An individual shall be disqualified from receiving benefits under this part while he is confined, pursuant to commitment or court order or certification, in an institution or other place, as a dipsomaniac, drug addict or sexual psychopath.
Notwithstanding any other provision of law, an individual who is otherwise eligible shall not be disqualified for benefits under this part for the day on which he or she or a family member, as defined in Chapter 7 (commencing with Section 3300), for whom the individual is providing care, died.
An individual shall be ineligible for benefits under this part for any day during which he or she is incarcerated in any federal, state, or municipal penal institution, jail, medical facility, public or private hospital, or in any other place because of a criminal violation of a federal, state, or other municipal law or ordinance. For purposes of this section, “incarceration” includes any time spent in the custody of law enforcement authorities upon adjudication or conviction by a court of competent jurisdiction.
This section shall apply only with respect to periods of incarceration commencing on or after January 1, 1994.
Any individual who commits a crime shall be ineligible for benefits under this part if the individual is disabled due to an illness or injury caused by, or arising out of the commission of, arrest, investigation, or prosecution of any crime that results in a felony conviction.
For purposes of this section, a plea or verdict of guilty, or a felony conviction following a plea of nolo contendere or no contest shall be considered to be a felony conviction under this part, irrespective of whether an order granting probation or suspending the imposition or execution of any sentence is issued.
This section shall apply only with respect to convictions rendered on or after January 1, 1994, regardless of the date the disability commenced, or benefits were paid.
ARTICLE 4. Filing, Determination and Payment of Disability Benefit Claims [2701. - 2714.]
Disability benefits shall be paid by the department through public employment offices or other agencies approved by the director.
Beginning January 1, 2024, the department shall provide a person entitled to receive disability benefits or family temporary disability insurance benefits under Chapter 7 (commencing with Section 3300) the option to receive payments by direct deposit, as regulated under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), into a qualifying account, as defined in paragraph (3) of subdivision (e), of the recipient’s choice, in addition to other alternative disbursement payment methods, including, but not limited to, debit cards and checks.
Notwithstanding any other law, if disability benefits or family temporary disability insurance benefits are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments shall only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (3) of subdivision (e).
A person or entity that is not an insured depository financial institution that offers, maintains, or manages an account that does not comply with paragraph (3) of subdivision (e) shall not solicit, accept, or facilitate the direct deposit of disability benefits or family temporary disability insurance benefits to the account.
For purposes of this section, the department shall not be held liable for authorizing a direct deposit of disability benefits or family temporary disability insurance benefits into an account designated by the recipient that does not comply with paragraph (3) of subdivision (e). The department has no obligation to determine whether an account at the insured depository financial institution of the recipient’s choice is a qualifying account, as described in paragraph (3) of subdivision (e).
For the purposes of this section, the following definitions shall apply:
“Insured depository financial institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.
“Prepaid account” has the same meaning as that term is defined in regulations under the EFTA.
“Qualifying account” is one of the following:
A demand deposit or savings account at an insured depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is in the name of the person entitled to the receipt of disability benefits or family temporary disability insurance benefits.
A prepaid account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution, that meets all of the following:
The account is held at an insured depository financial institution.
The account is set up to meet the requirements for direct or passthrough deposit or share insurance payable to the person entitled to the receipt of disability benefits or family temporary disability insurance benefits by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
The account is not attached to a credit or overdraft feature that is automatically repaid from the account unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations.
The account complies with all of the requirements, and provides the holder of the account with all of the consumer protections, that apply to an account under the rules implementing the EFTA.
The department shall issue the initial payment for unemployment compensation disability benefits to a monetarily eligible claimant who is otherwise determined eligible by the department under applicable law and regulation within 14 days of receipt of the claimant’s properly completed first disability claim.
This section shall remain in effect only until Section 2701.5.5 is incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project, and as of that date is repealed.
The department shall issue the initial payment for unemployment compensation disability benefits to a monetarily eligible claimant who is otherwise determined eligible by the department under applicable law and regulation within 14 days of receipt of the claimant’s properly completed first disability claim or as soon as eligibility begins for the claimant, whichever is later.
This section shall become operative when incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project.
Minors who are eligible for disability benefits may be paid and receive such benefits in their own right and a receipt signed by a minor shall be valid and binding in all respects.
The establishment of a disability benefit period for unemployment compensation disability benefits shall not establish a benefit year for unemployment compensation benefits and the filing of a valid claim for one shall not establish a valid claim for the other. Wages used to establish a valid claim for disability benefits may be used to establish a subsequent claim for disability benefits or unemployment compensation benefits provided such wages were paid in the base period applicable to the subsequent claim.
Where an individual who would be eligible to receive disability benefits dies before making a claim therefor, the director may in accordance with authorized regulations allow the filing of a claim for such benefits by a person legally entitled thereto under Section 1341.
Where an individual who would be eligible to receive disability benefits is mentally unable to make a claim therefor, the director shall, in accordance with authorized regulations, allow the filing of a claim for these benefits by the spouse or domestic partner of the individual, in the absence of any other legally authorized representative of the individual. A payment shall be made upon affidavit executed by the spouse or domestic partner or person or persons claiming to be entitled to the benefits and the receipt of the affidavit or affidavits shall fully discharge the Director of Employment Development from any further liability with reference to the payments, without the necessity of inquiring into the truth of any of the facts stated in the affidavit.
For the purposes of this section “mentally unable to make a claim” shall be limited to those cases in which the individual is certified by a healing arts practitioner specified in Sections 2708 and 2709 to be mentally unable to make a claim pursuant to this part.
Claims for disability benefits shall be made in accordance with authorized regulations of the Director of Employment Development. Each employer shall post and maintain in places readily accessible to individuals in his service printed statements concerning such regulations and shall make available to each such individual copies of such printed statements, regulations or matters relating to claims for disability benefits as the Director of Employment Development may prescribe. Such printed statements shall be supplied to each employer by the Director of Employment Development without cost to the employer.
A first claim, accompanied by a certificate on a form furnished by the department to the claimant, shall be filed not later than the 41st consecutive day following the first compensable day of unemployment and disability with respect to which the claim is made for benefits, which time shall be extended by the department upon a showing of good cause. If a first claim is not complete, the claim form shall be returned to the claimant for completion and it shall be completed and returned not later than the 10th consecutive day after the date it was mailed by the department to the claimant, except that such time shall be extended by the department upon a showing of good cause.
This section shall remain in effect only until Section 2706.1.5 is incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project, and as of that date is repealed.
A claimant may initiate the claim process up to 30 days in advance of the anticipated first compensable day. A first claim, accompanied by a certificate on a form furnished by the department to the claimant, shall be filed not later than the 41st consecutive day following the first compensable day of unemployment and disability with respect to which the claim is made for benefits, which time shall be extended by the department upon a showing of good cause. If a first claim is not complete, the claim form shall be returned to the claimant for completion and it shall be completed and returned not later than the 10th consecutive day after the date it was mailed by the department to the claimant, except that the time shall be extended by the department upon a showing of good cause.
This section shall become operative when incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project.
Any continued medical certification shall be submitted to the department within 20 days of the date the claimant is issued a notice of final payment or departmental request for additional medical certification. The 20-day time limit shall be extended by the department upon a showing of good cause.
The department shall give a notice of the filing of a first claim for each disability benefit period to the employing unit by which the claimant was last employed immediately preceding the filing of such claim.
Within two working days after receipt of the notice provided for in Section 2707, or if there has been a termination of the claimant’s service within five days after such termination, whichever is the later, the last employer shall notify the department of any information known to him which may bear upon the eligibility of the claimant.
The department shall consider the facts submitted by the employer pursuant to Section 2707.1 and make a determination as to the eligibility of the claimant for benefits. The department shall promptly notify the claimant of the determination and the reasons therefor. The claimant may appeal therefrom to an administrative law judge within 30 days from service of the notice of determination. The 30-day period may be extended for good cause. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on March 1, 2018.
Except as provided in subdivision (b) of this section, upon the filing of a claim for unemployment compensation disability benefits, the Employment Development Department shall promptly make a computation on the claim which shall set forth the maximum amount of benefits potentially payable during the disability benefit period and the weekly benefit amount. The Employment Development Department shall promptly notify the claimant of the computation.
No computation shall be made on a claim of an employee for disability benefits under an approved self-insured plan if the uninterrupted period of disability for such claim does not exceed the waiting period prescribed for benefits from the Disability Fund under subdivision (b) of Section 2627.
The claimant may, within 30 days after the service of the notice of computation or recomputation, protest the accuracy of the computation or recomputation. The 30-day period may be extended for good cause. The department shall consider any such protest and shall promptly notify the claimant of the recomputation or denial of recomputation. The claimant may appeal from a notice of denial of recomputation in the manner prescribed in Section 2707.2. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on March 1, 2018.
The department may for good cause reconsider any determination provided for in this part prior to the filing of an appeal therefrom, or within 30 days after an appeal to an administrative law judge is filed. The department shall promptly notify the claimant of any reconsidered determination, and the claimant may appeal therefrom in the manner prescribed in Section 2707.2. The director shall be an interested party to any appeal.
The department may for good cause reconsider any computation or recomputation provided for in this part within one year from the beginning date of the disability benefit period to which the notice of computation or recomputation relates, except that no recomputation may be considered with respect to any issue considered or under consideration in an appeal taken from a denial of recomputation. The department shall promptly notify the claimant of the recomputation. The claimant may protest the accuracy of the recomputation as prescribed in Section 2707.4.
Notices, protests, and information required under this article shall be submitted in accordance with authorized regulations.
An administrative law judge, after affording a reasonable opportunity for fair hearing, shall, unless the appeal is withdrawn, affirm, reverse, modify, or set aside any determination that is appealed under this article. The claimant and the director shall be promptly notified in writing of the administrative law judge’s decision, together with reasons for the decision. The decision shall be final unless, within 30 days after mailing of the decision, further appeal is initiated to the appeals board pursuant to Section 1336. The 30-day limitation may be extended for good cause.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
In accordance with the director’s authorized regulations, and except as provided in subdivision (c) and Sections 2708.1 and 2709, a claimant shall establish medical eligibility for each uninterrupted period of disability by filing a first claim for disability benefits supported by the certificate of a treating physician or practitioner that establishes the sickness, injury, or pregnancy of the employee, or the condition of the family member that warrants the care of the employee. For subsequent periods of uninterrupted disability after the period covered by the initial certificate or any preceding continued claim, a claimant shall file a continued claim for those benefits supported by the certificate of a treating physician or practitioner. A certificate filed to establish medical eligibility for the employee’s own sickness, injury, or pregnancy shall contain a diagnosis and diagnostic code prescribed in the International Classification of Diseases, or, if no diagnosis has yet been obtained, a detailed statement of symptoms.
A certificate filed to establish medical eligibility of the employee’s own sickness, injury, or pregnancy shall also contain a statement of medical facts, including secondary diagnoses when applicable, within the physician’s or practitioner’s knowledge, based on a physical examination and a documented medical history of the claimant by the physician or practitioner, indicating the physician’s or practitioner’s conclusion as to the claimant’s disability, and a statement of the physician’s or practitioner’s opinion as to the expected duration of the disability.
An employee shall be required to file a certificate to establish eligibility when taking leave to care for a family member with a serious health condition. The certificate shall be developed by the department. In order to establish medical eligibility of the serious health condition of the family member that warrants the care of the employee, the information shall be within the physician’s or practitioner’s knowledge and shall be based on a physical examination and documented medical history of the family member and shall contain all of the following:
A diagnosis and diagnostic code prescribed in the International Classification of Diseases, or, if no diagnosis has yet been obtained, a detailed statement of symptoms.
The date, if known, on which the condition commenced.
The probable duration of the condition.
An estimate of the amount of time that the physician or practitioner believes the employee needs to care for the child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.
A statement that the serious health condition warrants the participation of the employee to provide care for their child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.
“Warrants the participation of the employee” includes, but is not limited to, providing psychological comfort, and arranging “third party” care for the child, parent, grandparent, grandchild, sibling, spouse, or domestic partner, as well as directly providing, or participating in, the medical care.
The department shall develop a certification form for bonding that is separate and distinct from the certificate required in subdivision (a) for an employee taking leave to bond with a minor child within the first year of the child’s birth or placement in connection with foster care or adoption.
The first and any continuing claim of an individual who obtains care and treatment outside this state shall be supported by a certificate of a treating physician or practitioner duly licensed or certified by the state or foreign country in which the claimant is receiving the care and treatment. If a physician or practitioner licensed by and practicing in a foreign country is under investigation by the department for filing false claims and the department does not have legal remedies to conduct a criminal investigation or prosecution in that country, the department may suspend the processing of all further certifications until the physician or practitioner fully cooperates, and continues to cooperate, with the investigation. A physician or practitioner licensed by, and practicing in, a foreign country who has been convicted of filing false claims with the department may not file a certificate in support of a claim for disability benefits for a period of five years.
For purposes of this part:
“Physician” has the same meaning as defined in Section 3209.3 of the Labor Code.
“Practitioner” means a person duly licensed or certified in California acting within the scope of their license or certification who is a dentist, podiatrist, or a nurse practitioner, and in the case of a nurse practitioner, after performance of a physical examination by a nurse practitioner and collaboration with a physician and surgeon, or as to pregnancy, childbirth, or postpartum conditions consistent with the scope of their professional licensure, a midwife or nurse-midwife, or nurse practitioner.
“Practitioner” also means a physician assistant who has performed a physical examination under the supervision of a physician and surgeon. Funds appropriated to cover the costs required to implement this subparagraph shall come from the Unemployment Compensation Disability Fund. This subparagraph shall be implemented on or before January 1, 2017.
For a claimant who is hospitalized in or under the authority of a county hospital in this state, a certificate of initial and continuing medical disability, if any, shall satisfy the requirements of this section if the disability is shown by the claimant’s hospital chart, and the certificate is signed by the hospital’s registrar. For a claimant hospitalized in or under the care of a medical facility of the United States government, a certificate of initial and continuing medical disability, if any, shall satisfy the requirements of this section if the disability is shown by the claimant’s hospital chart, and the certificate is signed by a medical officer of the facility duly authorized to do so.
Nothing in this section shall be construed to preclude the department from requesting additional medical evidence to supplement the first or any continued claim if the additional evidence can be procured without additional cost to the claimant. The department may require that the additional evidence include any or all of the following:
Identification of diagnoses.
Identification of symptoms.
A statement setting forth the facts of the claimant’s disability. The statement shall be completed by any of the following individuals:
The physician or practitioner treating the claimant.
The registrar, authorized medical officer, or other duly authorized official of the hospital or health facility treating the claimant.
An examining physician or other representative of the department.
This section shall become operative on July 1, 2014.
Except as provided in subdivision (b), where an individual is entitled to receive unemployment compensation disability benefits reduced by the amount of temporary workers’ compensation received for any day under Section 2629, it shall not be necessary that he or she obtain a certificate of a physician as required by subdivision (a) of Section 2708 to receive the reduced amount of disability benefits for that day, provided that the claimant submits evidence to the department of receipt of temporary disability benefits under a workers’ compensation law for that day.
This section does not apply to Chapter 7 (commencing with Section 3300).
If any individual in good faith adheres to the teachings of any bona fide church, sect, denomination or organization and in accordance with its principles depends for healing entirely upon prayer or spiritual means, no medical examination shall be required, but in lieu thereof the director may accept the certificate of a duly authorized and accredited practitioner of that bona fide church, sect, denomination or organization as to the disability of the claimant, or the serious health condition of the family member that warrants the care of the individual, for purposes of Chapter 7 (commencing with Section 3300) of Part 2, and the estimated duration of such disability, and no authorized regulation prescribing the manner of proof of illness, injury, or serious health condition shall discriminate against that individual.
Whenever an individual is entitled to benefits under this part but there is a dispute whether such benefits are payable from the Disability Fund or from one or another voluntary plan, benefits shall be paid to the individual, pursuant to authorized regulations, from the source against which his claim was first filed, at not less than the Disability Fund rate, pending the determination of the dispute. The appeals board may prescribe by regulation the time, manner, method, and procedure through which such disputes may be determined by administrative law judges and the appeals board. If it is finally determined that the benefits should have been paid from one of said sources other than the one which paid the benefits, reimbursement shall be promptly made from the Disability Fund or the voluntary plan, as the case may be, and the claimant shall be promptly paid the accumulated excess, if any, to which he is entitled. Reimbursement shall also be made to the extent of actual liability for benefits from one to another of the above mentioned sources when it is determined that benefits have been paid in error from one source which should have been paid from another.
If, in a disputed coverage proceeding under Section 2712 a final decision of an administrative law judge or of the appeals board finds that an employer or insurer shall reimburse the Disability Fund and the employer or insurer fails to pay all or any part of the reimbursement within 15 days after the decision of an administrative law judge or of the appeals board becomes final, the director shall assess the unpaid amount against the employer or the insurer. The provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 with respect to the assessment of contributions shall apply to the recovery of the unpaid amount. The provisions of Chapter 7 (commencing with Section 1701) of Part 1 with respect to the collection of contributions shall apply to the recovery of unpaid amounts under this section. Amounts so collected shall be deposited in the Disability Fund.
The provisions of Article 9 (commencing with Section 1176) of Chapter 4 of Part 1 shall apply to amounts collected under this section and to amounts reimbursed to the Disability Fund after a final decision by an administrative law judge or the appeals board in a disputed coverage proceeding under Section 2712.
In proceedings under this part the claimant, upon a showing of good cause, may request a closed hearing except that the last employer and each base period employer of the claimant shall be entitled to participate in any such hearing.
All medical records of the department obtained under this part, except to the extent necessary for the proper administration of this part, or as provided elsewhere in law shall be confidential and shall not be published or be open to public inspection in any manner revealing the identity of the claimant or family member, or the nature or cause of his or her disability. Medical records that are disclosed shall be disclosed only pursuant to Section 1095, and shall remain confidential.
ARTICLE 5. Overpayments [2735. - 2742.]
Any person who is overpaid any amount as benefits under this part is liable for the amount overpaid unless:
The overpayment was not due to fraud, misrepresentation or wilful nondisclosure on the part of the recipient, and
The overpayment was received without fault on the part of the recipient, and its recovery would be against equity and good conscience.
If the director finds that an individual has been overpaid unemployment compensation disability benefits because he or she willfully, for the purpose of obtaining unemployment compensation disability benefits, either made a false statement or representation, with actual knowledge of the falsity thereof, or withheld a material fact, the director shall assess against the individual an amount equal to 30 percent of the overpayment amount. For the purpose of collection, an assessment made pursuant to this section may be treated as an overpayment. Assessments collected under this section shall be deposited in the Unemployment Compensation Disability Fund. No penalty under this section shall be assessed with regard to any false statement or representation made prior to January 1, 1986.
No claim of overpayment shall be based upon the disallowance by the Workmen’s Compensation Appeals Board of a claim of lien filed under Section 4903 of the Labor Code, or the allowance of such lien for less than the amount claimed, or upon the approval by the said appeals board of a compromise and release agreement providing for the allowance of such lien in an amount less than the claim.
The Director of Employment Development shall determine the amount of the overpayment and shall notify the recipient of the basis of the overpayment determination. In the absence of fraud, misrepresentation or willful nondisclosure, notice of the overpayment determination shall be served on the recipient within two years after the beginning of the disability benefit period for which the overpayment was made.
Within 30 days from the date of mailing or serving of the notice of overpayment determination, the person affected may file an appeal to an administrative law judge. The director shall be an interested party to this appeal. The administrative law judge, after affording reasonable opportunity for a fair hearing, shall, unless the appeal is withdrawn, affirm, reverse, modify, or set aside the findings set forth in the notice of overpayment determination. The party and the director shall be notified of the administrative law judge’s decision, together with his or her reasons therefor, which shall be final unless within 30 days from the date of notification or mailing of the decision a further appeal is initiated to the appeals board pursuant to Section 1336. The 30-day period for an appeal to the administrative law judge or to the appeals board may be extended for good cause.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on March 1, 2018.
The Director of Employment Development, subject to this article, may do any or all of the following in the recovery of overpayments of disability benefits:
File a civil action against the liable person for the recovery of the amount of the overpayment within one year after any of the following, or, in cases where the individual has been overpaid benefits due to fraud, misrepresentation, or nondisclosure as described in Section 2735.1, within three years of any of the following:
The service of the notice of overpayment determination if the person affected does not file an appeal to an administrative law judge.
The mailing of the decision of the administrative law judge if the person affected does not initiate a further appeal to the appeals board.
The date of the decision of the appeals board.
Initiate proceedings for a summary judgment against the liable person. However, this subdivision applies only where the director has found, pursuant to Section 2735, that the overpayment shall not be waived because it was due to fraud, misrepresentation, or willful nondisclosure on the part of the recipient. The director may, not later than three years after the overpayment became final, file with the clerk of the proper court in the county in which the claimant resides, a certificate containing all of the following:
A statement that the director has complied with all of the provisions of this article prior to the filing of the certificate.
A request that judgment be entered against the liable person in the amount set forth in the certificate.
The clerk, immediately upon filing of the certificate, shall enter a judgment for the State of California against the liable person in the amount set forth in the certificate.
For purposes of this subdivision only, an overpayment is final and due and payable after one of the following:
The liable person has not filed an appeal pursuant to Section 2737.
The liable person has filed an appeal to an administrative law judge and a decision of the administrative law judge upholding the overpayment has become final.
The liable person has filed an appeal to the appeals board and the decision of the appeals board upholding the overpayment has become final because the liable person has not sought judicial review within the six-month period provided by Section 410.
Reduce or vacate a summary judgment by filing a certificate to that effect with the clerk of the proper court.
Offset the amount of the overpayment received by the liable person against any amount of disability benefits to which they may become entitled under this division within six years of the date of service of the notice of overpayment determination.
An abstract of judgment obtained pursuant to subdivision (a) or (b) of Section 2739, or a copy thereof, may be recorded with the county recorder of any county. From the time of recording, the judgment shall constitute a lien against all real or personal property of the liable person in that county owned by the liable person at the time, or which the liable person may afterwards, but before the lien expires, acquire. The lien shall have the force, effect, and priority of a judgment lien and shall continue for 10 years from the time of recording of the abstract of judgment obtained pursuant to subdivision (a) or (b) of Section 2739, unless sooner released or otherwise discharged.
The lien may, within 10 years from the date of recording of the abstract of judgment or within 10 years from the date of the last extension of the lien in the manner provided, be extended by recording a new abstract in the office of the county recorder of any county. From the date of the recording, the lien shall be extended for 10 years unless sooner released or otherwise discharged.
Execution shall issue upon the judgment upon request of the director in the same manner as execution may issue upon other judgments. Sales shall be held under the execution as prescribed in the Code of Civil Procedure. In all proceedings under this section, the director or his or her authorized agents may act on behalf of the state.
File an acknowledgment of satisfaction of judgment with the court.
Serve an acknowledgment of satisfaction of judgment on the claimant. Service shall be made personally or by mail.
Record an acknowledgment of satisfaction of judgment in the office of the county recorder where the abstract of judgment is recorded.
If an acknowledgment of satisfaction of judgment is recorded, the cost of recording shall be an obligation of the claimant and may be collected from the claimant in any manner provided by law for the collection of the benefit overpayment.
If payment is made by check, any action specified in subdivision (a) shall not be required until the check has been paid by the financial institution upon which it was drawn.
Notwithstanding any other provision of law to the contrary, the Franchise Tax Board shall aid the director in the recovery of overpayments of disability benefits through the exchange of information.
No person shall be liable for the amount of benefits received where the benefits were paid pursuant to an administrative law judge’s decision which affirmed an initial determination or in accordance with a final decision of the appeals board, regardless of any further appeal.
Any claim of lien filed with the Workmen’s Compensation Appeals Board under the provisions of Section 4903 of the Labor Code shall be fully discharged and satisfied by payment of the amount of such lien allowed by the said appeals board under the provisions of Section 4904 of said code or the amount specified in any compromise and release agreement filed and approved by the said appeals board pursuant to Sections 5000 through 5004 of said code.
The director shall enforce collection of any judgment obtained by him or her under subdivision (a) or subdivision (b), or both, of Section 2739. Amounts collected under this section shall be deposited in the fund from which the overpayment was made.
ARTICLE 6. Rights of Trainees [2765. - 2772.]
Notwithstanding any inconsistent provisions of this part the benefit rights of trainees shall be determined in accordance with the provisions of this article for the periods and with respect to the matters specified in this article. Except as otherwise provided in this article all other provisions of this part shall continue to be applicable in connection with such benefits.
“Military service” as used in this article means active service in the land or naval forces of the United States, but the service of an individual in any reserve component of the land or naval forces of the United States who is ordered to active duty in any such force for a period of 30 days or less shall not be deemed active service in that force during that period.
“Trainee” as used in this article means an individual who entered military service after April 1, 1940, and who continued such service for not less than 90 consecutive days.
When any trainee has an unexpired benefit year for disability benefits at the time of induction into the armed forces, the unexpended balance of disability benefits remaining to his account shall be reestablished beginning with the first day of the first week succeeding the date of his termination of service. The balance shall be paid at a weekly rate in accordance with Section 2655. In the event the records relating to the unexpended balance have been destroyed under proper approval, the trainee may establish the unexpended balance by affidavit as provided by authorized regulation. Whenever this balance is exhausted the trainee may file a claim and his disability base period shall be determined in accordance with Sections 2770 and 2610 or Section 2611. All reestablished balances shall lapse 65 weeks after termination of military service.
The filing of a valid claim for disability benefits by a trainee shall establish a disability benefit period.
Except when subdivision (b) of Section 2611 is applicable, in determining the benefit rights of trainees the disability base period shall exclude those quarters during which the trainee was in military service 60 days or more. For all quarters so excluded there shall be substituted an equal number of quarters immediately preceding the trainee’s entry into military service. In the event the base period so determined includes wages in calendar quarters for which the records have been destroyed under proper approval, the claimant may establish the amount of the wages by affidavit in accordance with authorized regulation. The quarter of entry into military service shall be counted as a completed quarter if the director finds that the inclusion thereof would be more equitable to the trainee.
No disqualification shall be applied to any trainee after the termination of his military service, by reason of any act or course of action on his part prior to the date of his entry into such service.
Notwithstanding any inconsistent provision of this part, any trainee who was a resident of this state at the time of his entrance into the military service, who is a resident of this state at the time he applies for disability compensation benefits under this section, and who has been disabled in the military service and is eligible to receive disability compensation from the federal government for such disability, shall be eligible, upon his discharge from the military service, to receive disability compensation benefits under Section 2655 from the time he is determined by the federal government to be eligible for disability compensation payments from the federal government until such time as he begins to receive his disability compensation payments from the federal government.
Such trainee’s weekly benefit amount shall be the maximum amount specified in Section 2655 or the amount of the disability compensation which he is eligible to receive from the federal government, whichever is smaller.
Each trainee receiving any benefits pursuant to this section shall repay to the state the amount received as benefits hereunder. Each trainee, as a condition of receiving benefit hereunder, shall assign to the state the disability compensation which he is eligible to receive from the federal government to the extent that he receives benefits from the state pursuant to this section and shall enter into a contract with the director, in a form prescribed by the director, under which the trainee will be obligated to repay the state over a period of not more than one year following the date he first receives disability compensation from the federal government for his disability. Repayments made by such trainees shall be deposited by the director in the General Fund.
ARTICLE 7. Rights of Industrially Disabled Persons [2775. - 2778.]
Notwithstanding any inconsistent provisions of this part, the benefit rights of industrially disabled persons shall be determined in accordance with the provisions of this article for the period and with respect to the matters specified in this article. Except as otherwise provided in this article, all of the provisions of this part shall continue to be applicable in connection with such benefits.
As used in this article:
“Industrially disabled person” means an individual who has received or is entitled to receive benefits under Division 4 (commencing with Section 3201) of the Labor Code, and who is unable to perform his regular or customary work for 60 consecutive days or more, but not to exceed two calendar years from the date of commencement of his industrial disability.
“Industrial disability” means a disability compensable under Division 4 (commencing with Section 3201) of the Labor Code.
Except as provided in subdivision (b) of Section 2611, in determining the benefit rights of any industrially disabled person the disability base period shall exclude those quarters during which such person was industrially disabled for 60 days or more. For all quarters so excluded there shall be substituted an equal number of quarters immediately preceding the commencement of his or her industrial disability. In the event the base period so determined includes wages in calendar quarters for which the records have been destroyed under proper approval, a claimant may establish the amount of wages by affidavit in accordance with authorized regulations. The quarter of commencement of an industrial disability shall be counted as a completed quarter if the director finds that the inclusion thereof would be more equitable to the industrially disabled person.
No disqualification shall be applied to any industrially disabled person after the termination of his industrial disability, by reason of any act or course of action on his part prior to the date on which his industrial disability commenced.
CHAPTER 2.4. Nonindustrial Disability Insurance for State Employees [2781. - 2783.]
Except as provided in this chapter and Chapter 2.5 (commencing with Section 19878) of Part 2.6 of Division 5 of Title 2 of the Government Code, a state employee shall be eligible for nonindustrial disability benefits on the same terms and conditions as are specified by this part. Except as inconsistent with the provisions of this chapter and Chapter 2.6 (commencing with Section 19878) of Part 2.6 of Division 5 of Title 2 of the Government Code, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this chapter.
Nonindustrial disability benefits are payable by the Controller upon authorization by the Employment Development Department to individuals who are eligible to receive such benefit payments under this chapter.
In lieu of the contributions required of employees, the State of California shall pay into the Disability Fund in the State Treasury at the times and in the manner provided in subdivision (c), an amount equal to the additional cost to the Disability Fund for added administrative work arising out of nonindustrial disability insurance for state employees.
In making the payments prescribed by subdivision (b), there shall be paid or credited to the Disability Fund, either in advance or by way of reimbursement, as may be determined by the director, such sums as he estimates the Disability Fund will be entitled to receive from the State of California under this section for each fiscal year, reduced or increased by any sum by which he finds that his estimates for any prior fiscal year were greater or less than the amounts which should have been paid to the fund. Such estimates may be made upon the basis of statistical sampling, or other method as may be determined by the director.
Upon making such determination, the director shall certify to the Controller the amount determined with respect to the State of California. The Controller shall pay to the Disability Fund the contributions due from the State of California.
The director may require from each state agency such employment, wage, financial, statistical, or other information and reports, properly verified, as may be deemed necessary by the director to carry out his duties under this chapter, which shall be filed with the director at the time and in the manner prescribed by him.
The director may tabulate and publish information obtained pursuant to this chapter in statistical form and may divulge the name of the employing unit.
Each state agency shall keep such work records as may be prescribed by the director for the proper administration of this chapter.
CHAPTER 4. Contributions [2901. - 2903.]
Notwithstanding any other provision of this division, any individual who adheres to the faith or teaching of any bona fide religious sect, denomination, or organization, and in accordance with its creed, tenets, or principles, depends for healing upon prayer in the practice of religion, upon filing with the department and with each of his employers a statement declaring such adherence and dependence and disclaiming any benefits under this part, shall be exempt from contributions under this division in respect to any wages paid to him by any such employer in the calendar quarter in which such statement is filed, in all subsequent calendar quarters while such statement is in effect, and, if the individual so elects, in any prior calendar quarter for which wages are reported to the department on or after the date such statement is filed. Such individual shall be ineligible to receive benefits under this part based upon such wages.
The time, procedure, manner of payment and collection of contributions under this part shall be in accordance with the provisions of Part 1 of this division.
CHAPTER 5. Financial Provisions [3001. - 3075.]
ARTICLE 1. Disability Fund [3001. - 3015.]
The Unemployment Compensation Disability Fund is continued in existence as a special fund in the State Treasury, separate and apart from all other public money or funds of this state. The moneys and assets of this fund shall be held in trust by the State Treasurer and administered under the direction of the director exclusively, for the purpose of this part.
Notwithstanding any other law, the Controller may use the moneys in the Unemployment Compensation Disability Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the Unemployment Compensation Disability Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the Unemployment Compensation Disability Fund was created.
The State Treasurer is the treasurer of the Disability Fund and shall have the custody of all money belonging to the Disability Fund and not otherwise held, deposited or invested under this part. The official bond of the State Treasurer shall cover the faithful performance of his or her duties as treasurer of the Disability Fund. The State Treasurer shall invest or otherwise deal with the Disability Fund under the supervision of the director. The State Treasurer may, pursuant to Section 16470 of the Government Code, file with the Pooled Money Investment Board a notice of election that investment of surplus money in the Disability Fund shall come under the provisions of the Surplus Money Investment Fund, and may revoke such election pursuant to Section 16470 of the Government Code. As of the effective date of any election with respect to the Disability Fund filed pursuant to Section 16470 of the Government Code, the State Treasurer shall transfer the surplus money in the Disability Fund to the Surplus Money Investment Fund, and may transfer all or any portion of the investments held by the Disability Fund at the date of such election, from the Disability Fund to the Surplus Money Investment Fund. As of the effective date of the revocation of any such election, the State Treasurer shall transfer from the Surplus Money Investment Fund to the Disability Fund the surplus money and earnings attributable to the Disability Fund.
Except as provided in subdivision (c), all surplus money in the Disability Fund may be invested solely in securities set forth in subdivision (b) of this section, and all interest or earnings therefrom shall be deposited in the Disability Fund.
Eligible securities for the investment of surplus money shall be:
Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
Bonds of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
Bonds of any county, city, metropolitan water district, municipal utility district, or school district of this state.
Bonds, consolidated bonds, collateral trust debentures, consolidated debentures, or other obligations issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act.
Debentures and consolidated debentures issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933.
Bonds or debentures of the Federal Home Loan Bank Board established under the Federal Home Loan Bank Act.
Bonds of any federal home loan bank established under the Federal Home Loan Bank Act.
Stock, bonds, debentures and other obligations of the Federal National Mortgage Association established under the National Housing Act.
Bonds, notes, and other obligations issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act.
This section shall not apply during the period of any election under Section 16470 of the Government Code for investment of surplus money in the Disability Fund under the provisions of the Surplus Money Investment Fund.
The Disability Fund consists of all contributions required of individuals under Section 984 with respect to wages paid by employers for employment; all money received for the purpose of disability benefits from the United States of America or any agency thereof, or from any other source; and any property or securities acquired through the use of money belonging to the Disability Fund and all earnings of such money or securities.
All money received from the Federal Government for disability benefit purposes or for the administration of this part shall be deposited in the Disability Fund in accordance with the terms of the federal grant. Unless the Federal Government approves, no money made available to this State under Title 3 of the Social Security Act shall be used for disability benefits or for the administration of this part.
There shall be no further transfer of money from the Unemployment Trust Fund to the Disability Fund.
All money collected under Section 984 shall be deposited in the Disability Fund.
Any amounts determined by the director or his authorized representatives to be payable to employing units or workers as refunds of amounts deposited in the various accounts of the Disability Fund which are unclaimed at the end of three years from such determination, shall be included in the revenue to the account in the Disability Fund in which they were deposited. The employing unit or person entitled to such payment shall not thereafter maintain any claim, action or proceeding with respect to such amounts.
Whenever any warrant is drawn on an account in the Disability Fund by the Controller, and the same remains unclaimed after one year, the amount thereof shall revert to that account in the Disability Fund from which the amount was payable.
Notwithstanding Section 13340 of the Government Code, all money in the Disability Fund is continuously appropriated for the purpose of providing disability benefits pursuant to this part, including the payment of refunds, credits, or judgments, and interest thereon, the payment of disability benefits to all eligible persons not covered exclusively by an approved voluntary plan, and the payment of the expenses of administration of this part and Section 17061 of the Revenue and Taxation Code by the department and the Franchise Tax Board. “Eligible persons” as used in this section, means those individuals who are covered by the Disability Fund at the time his or her disability benefit period commences, or whose employment has terminated or who is in noncovered employment at the time his or her disability benefit period commences, and who is otherwise eligible for benefits under this part.
For the purpose of keeping a record of the payments to and the disbursements from the Disability Fund with respect to the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability period commences, the director shall maintain the Unemployed Disabled Account in the Disability Fund. This account shall be credited with 12 percent of the product obtained by multiplying the rate of worker contributions as determined in Section 984, by the amount of the taxable wages paid to employees covered by voluntary plans for disability benefits for each calendar year. This account shall also be credited with an amount equal to 12 percent of the product obtained by multiplying the rate of worker contributions, as determined in Section 984, by the amount of the taxable wages paid to employees covered by the Disability Fund for each calendar year. This account shall be charged each calendar year with disbursements from the Disability Fund for the payment of benefits and the additional administrative costs of the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability benefit period commences.
A sum to be determined by the Director of Finance, of amounts deposited in the disability fund, may be used for the necessary expenses of administration of this part and Sections 17061 and 17061.5 of the Revenue and Taxation Code in addition to any other fund or money available for such purpose. Such sum shall be available to the department for the payment of the expenses of administration of this part and Sections 17061 and 17061.5 of the Revenue and Taxation Code by the department and the Franchise Tax Board only to the extent that money received from the United States or any of its agencies is not available for such purposes.
Withdrawals by the director from the Disability Fund for the payment of refunds, credits, or judgments, and disability benefits are exempted from the operation of Section 925.6 of the Government Code.
The department shall have priority to occupy any space in the buildings and facilities financed by the Disability Fund, which comprise any space in the department’s central office building and related parking facilities in Sacramento and the department’s branch office in Los Angeles, at rental rates not exceeding the cost of providing maintenance and other services.
ARTICLE 2. Disability Administration Account [3051. - 3051.]
There is a Disability Administration Account within the Disability Fund. The director may, without at the time furnishing vouchers and itemized statements, withdraw from this account sums not to exceed in the aggregate an amount equal to three percent of the total disbursements made from the fund during the immediately preceding fiscal year to be used as a revolving fund where payment of compensation earned, traveling expense advances, or other cash payments are necessary. At the close of each fiscal year or at any other time, upon the demand of the Department of Finance, the money so drawn shall be accounted for and substantiated by vouchers and itemized statements submitted to and audited by the Controller.
ARTICLE 3. Disability Benefit Payment Account [3075. - 3075.]
The director shall, without presenting vouchers and itemized statements, withdraw from the Disability Fund any sums that he or she deems necessary for the payment of disability benefits for a reasonable future period. The Controller shall draw his or her warrant for any claim presented by the director for the payment and the Treasurer shall pay the warrant. Upon the withdrawal thereof, those sums shall be deposited in a disability benefit payment account in such bank or public depositary and under those conditions as the director determines, with the approval of the Department of Finance. The bank or public depositary shall be one in which general funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of that account. Money in this account shall be used solely to pay disability benefits by the department pursuant to authorized regulations and no other disbursement shall be made from that account, except that amounts erroneously and illegally deposited in that account may be refunded. The procedure prescribed by those regulations shall satisfy and be in lieu of any and all statutory requirements of specific appropriation or other form of release by state officers of money in their custody prior to expenditure that might otherwise be applicable to withdrawals from that account.
CHAPTER 6. Voluntary Plans [3251. - 3272.]
An employer, a majority of the employees employed in this state of an employer, or both, may apply to the Director of Employment Development for approval of a voluntary plan for the payment of disability benefits to the employees so electing. The benefits payable as indemnification for loss of wages under any voluntary plan shall be separately stated and designated in the plan “unemployment compensation disability benefits” separate and distinct from other benefits, if any.
Except as provided by subdivision (b) of this section, neither an employee nor his or her employer shall be liable for the worker contributions required under this division with respect to wages paid by the employer while the employee is covered by an approved voluntary plan.
Each voluntary plan shall pay to the department for the Disability Fund 14 percent of the product obtained by multiplying the rate of worker contributions, as determined in Section 984, by the amount of the taxable wages paid to employees covered by the voluntary plan for disability benefit coverage for each calendar year. Such payments shall not constitute a part of the voluntary plan premium for purposes of any tax under any provision of law. Payments under this section shall be deposited in the Disability Fund.
The payments made under subdivision (b) of this section in excess of the credit to the unemployed disabled account made pursuant to Section 3012 shall reimburse the Disability Fund for the amounts paid for administrative costs arising out of voluntary plans as determined pursuant to Section 3269, and the aggregate amount paid as refunds and credits made to employees applicable to voluntary plans pursuant to Section 1176 as determined pursuant to Section 3266.
Each voluntary plan shall file with the director within the time required for payments under subdivision (e) of this section, a return containing the employer’s business name, address, and account number, and such other information as the director shall prescribe. The director shall prescribe the form for the return.
Payments required under this section 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 such month.
The provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of this division with respect to the assessment of contributions and the provisions of Chapter 7 (commencing with Section 1701) of Part 1 of this division with respect to the collection of contributions shall apply to payments required by this section.
Whenever the director believes that a change in the percentage rate of payment specified in subdivision (b) may be necessary, he or she shall inform the Governor and the Legislature thereof and make recommendations accordingly.
Except as provided in this part, an employee covered by an approved voluntary plan at the commencement of a disability benefit period shall not be entitled to benefits from the Disability Fund. Benefits payable to that employee shall be the liability of the approved voluntary plan under which the employee was covered at the commencement of the disability benefit period, regardless of any subsequent disabling condition which may occur during that disability benefit period. The Director of Employment Development shall prescribe authorized regulations to allow benefits to individuals simultaneously covered by one or more approved voluntary plans and the Disability Fund.
The Director of Employment Development shall approve any voluntary plan, except one filed pursuant to Section 3255, as to which he or she finds that there is at least one employee in employment and all of the following exist:
The plan has been made available to all of the employees of the employer employed in this state or to all employees at any one distinct, separate establishment maintained by the employer in this state. “Employees” as used in this subdivision includes those individuals in partial or other forms of short-time employment and employees not in employment as the Director of Employment Development shall prescribe by authorized regulations.
A majority of the employees of the employer employed in this state or a majority of the employees employed at any one distinct, separate establishment maintained by the employer in this state have consented to the plan.
If the plan provides for insurance the form of the insurance policies to be issued have been approved by the Insurance Commissioner and are to be issued by an admitted disability insurer.
The employer has consented to the plan and has agreed to make the payroll deductions required, if any, and transmit the proceeds to the plan insurer, if any.
The plan provides for the inclusion of future employees.
The plan will be in effect for a period of not less than one year and, thereafter, continuously unless the Director of Employment Development finds that the employer or a majority of its employees employed in this state covered by the plan have given notice of withdrawal from the plan. The notice shall be filed in writing with the Director of Employment Development and shall be effective only on the anniversary of the effective date of the plan next following the filing of the notice, but in any event not less than 30 days from the time of the filing of the notice; except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal from the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of that law or change. If the plan is not withdrawn on the 30 days’ notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to that increase or change on the operative date of the increase or change.
The amount of deductions from the wages of an employee in effect for any plan shall not be increased on other than an anniversary of the effective date of the plan except to the extent that any increase in the deductions from the wages of an employee allowed by Section 3260 permits that amount to exceed the amount of deductions in effect.
The approval of the plan or plans will not result in a substantial selection of risks adverse to the Disability Fund.
For the purposes of this section, “small-business-third-party administrator” (hereafter SBTPA), means an applicant that the director finds meets all of the following criteria at the time of application:
The SBTPA administers voluntary disability plans on behalf of its clients pursuant to a written agreement in a form and manner approved by the director.
The SBTPA has at least 1,000 California domiciled clients, 80 percent of whom have fewer than 20 employees.
The SBTPA processes payroll for its California domiciled clients.
The SBTPA offers workers’ compensation insurance to its California domiciled clients through an affiliated California domiciled insurance company.
Except as modified by this section, “voluntary plan” shall be defined as, and shall be subject to the same provisions as, a “voluntary plan,” as set forth in this chapter.
The director may approve a single voluntary plan for all of an SBTPA’s clients and their employees where all of the following criteria are met:
The plan is administered by the SBTPA.
The plan establishes a master trust account that is administered by the SBTPA, and requires the SBTPA to maintain a separate accounting ledger for each individual employer that is a client of the SBTPA to reflect each client’s specific plan contributions. The master trust account shall be held in a federally insured bank.
If the plan does not provide for the assumption by an admitted disability insurer of the liability of the employer to pay the benefits afforded by the plan, the director shall not approve it unless the SBTPA meets the financial security requirements of Section 3258 on behalf of the SBTPA clients and their employees.
The single voluntary plan will be in effect for a period of not less than one year and, thereafter, continuously, unless the Director of Employment Development finds that the SBTPA has given notice of withdrawal of the plan. The notice filed by the SBTPA shall be filed in writing with the Director of Employment Development and shall be effective on the anniversary of the effective date of the plan next following the filing of the notice, but in any event shall not be less than 30 days from the time of the filing of the notice; except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal from the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of that law or change. If the plan is not withdrawn on the 30 days’ notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to that increase or change on the operative date of the increase or change.
Any individual employer who is a client of the SBTPA, or a majority of that client’s employees employed in this state covered by the plan, may also terminate their participation in the plan by giving written notice of withdrawal from the plan to the SBTPA and to the Director of Employment Development not less than 30 days prior to the date of withdrawal.
The Director of Employment Development may terminate the participation of an individual employer client of the SBTPA from the plan for cause, and the employer’s voluntary plan assets shall be recovered from the SBTPA and not from the employer as referenced in Section 3262.
The plan has been made available to all of the employees of the employer employed in this state or to all employees at any one distinct, separate establishment maintained by the employer in this state. “Employees” as used in this paragraph includes those individuals in partial or other forms of short-time employment and employees not in employment as the director shall prescribe by authorized regulations.
A majority of the employees of the client employed in this state or a majority of the employees employed at any one distinct, separate establishment maintained by the client in this state have consented to the plan.
If the plan provides for insurance, the form of the insurance policies to be issued has been approved by the Insurance Commissioner and is to be issued by an admitted disability insurer.
The client has consented to the plan and has authorized the SBTPA to make the payroll deductions required, if any, and deposit the proceeds into the master account administered by the SBTPA as referenced in paragraph (2).
The plan provides for the inclusion of future employees.
The amount of deductions from the wages of an employee of any client in effect for the plan shall not be increased on other than an anniversary of the effective date of the plan except to the extent that any increase in the deductions from the wages of an employee allowed by Section 3260 permits that amount to exceed the amount of deductions in effect.
The approval of the plan or plans will not result in a substantial selection of risks adverse to the Disability Fund.
The department may adopt application forms and procedures as deemed necessary to ensure compliance with this section.
It is the intent of the Legislature in enacting paragraph (3) of subdivision (c) that, in the event of the insolvency of an employer-client of the SBTPA, or of the SBTPA, the disability claims against the subaccount of any employer-client arising prior to the date of the insolvency shall be satisfied by first accessing the security of the SBTPA, as described in paragraph (3) of subdivision (c), rather than satisfying the claims from the Disability Fund.
A voluntary plan in force and effect at the time a successor employing unit acquires the organization, trade, or business, or substantially all the assets thereof, or a distinct and severable portion of the organization, trade, or business, and continues its operation without substantial reduction of personnel resulting from the acquisition, shall not withdraw without specific request for withdrawal thereof. The successor employing unit and the insurer shall be deemed to have consented to the provisions of the plan unless written request for withdrawal, effective as of the date of acquisition, is transmitted to the Director of Employment Development, by the employer or the insurer, within 30 days after the acquisition date, or within 30 days after notification from the Director of Employment Development that the plan is to continue, whichever is later. Unless the plan is withdrawn as of the date of acquisition by the successor employer or the insurer, a written request for withdrawal shall be effective only on the anniversary of the effective date of the plan next occurring on or after the date of acquisition, except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal of the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of law or change. If the plan is not withdrawn on 30 days’ notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to the increase or change on the operative date of the increase or change. Promptly, upon notice of change in ownership, any insurer of a plan shall prepare and issue policy forms and amendments as required, unless the plan is withdrawn. Nothing contained in this section shall prevent future withdrawal of any plans on an anniversary of the effective date of the plan upon 30 days’ notice, except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal of the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of the law or change. If the plan is not withdrawn on 30 days’ notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to the increase or change on the operative date of the increase or change.
When workers are engaged in an employment that normally involves working for several employers in the same industry interchangeably, and several employers or some of them cooperate to establish a plan for the payment of wages at a central place or places, and have appointed an agent under Section 1096, that agent, or a majority of workers regularly paid through a central place or places, or both, may apply to the Director of Employment Development for approval of a voluntary plan for the payment of disability benefits applicable to all employees whose wages are paid at one or more central place or places. The Director of Employment Development shall approve any voluntary plan under this section as to which he or she finds that all of the following exist:
The rights afforded to the covered employees are greater than those provided for in Chapter 2 (commencing with Section 2625) of this part, and are separately stated and designated “unemployment compensation disability benefits” separate and distinct from other benefits, if any.
The plan applies to all employees whose wages are paid at a central place or places with respect to all employment for which wages are paid at central place or places.
Seventy-five percent of the workers regularly paid at the central place or places have consented to the plan prior to the filing of the initial application for approval.
If the plan provides for insurance the form of the insurance policies to be issued have been approved by the Insurance Commissioner and are to be issued by an admitted disability insurer.
All employers paying wages through the central place or places have agreed to participate in the plan and the agent appointed under Section 1096 has agreed to make the payroll deductions required, if any, and transmit the proceeds to the plan insurer, if any.
The plan provides for the inclusion of all future employees paid at the central place or places.
The plan is to be in effect for a period of not less than one year and, thereafter, continuously unless the Director of Employment Development finds that the agent or a majority of the employees regularly paid at the central place or places has given written notice of withdrawal from the plan. The notice shall be filed in writing with the Director of Employment Development at least 30 days before it is to become effective and, upon the filing, will be effective only as to wages paid after the beginning of the calendar quarter next occurring on or after the anniversary of the effective date of the plan; except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal from the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of that law or change. If the plan is not withdrawn on 30 days’ notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to that increase or change on the operative date of the increase or change.
The amount of deductions from the wages of an employee in effect for any plan shall not be increased on other than an anniversary of the effective date of the plan except to the extent that any increase in the deductions from the wages of an employee allowed by Section 3260 permits that amount to exceed the amount of deductions in effect.
The approval of the plan or plans will not result in a substantial selection of risks adverse to the Disability Fund.
Whenever eighty-five percent (85%) of the employees to whom a plan is available have consented to the plan, the employer, or seventy-five percent (75%) of the employees who have consented to the plan, or both, may elect to make the plan applicable to all employees to whom it is available, except those who reject the plan. In such case, there shall be filed with the Director of Employment Development a notice stating that the requisite percentage of employees has consented to the plan and fixing the date upon which the plan will become applicable to all employees to whom it is available. At least 10 days before the date fixed in the notice, a notice shall be posted and circulated in a manner reasonably calculated to bring it to the attention of all employees to whom the plan is available but who have not consented thereto. The notice to such employees shall set forth the date the plan is to become applicable and the manner in which an employee may reject it.
From the time fixed in the notice filed with the Director of Employment Development all employees to whom the plan is available shall be deemed to have elected to be covered by the plan, except those who advise the employer in writing of their rejection within the time fixed.
Every person employed after the date the plan becomes applicable and to whom the plan is available, shall be deemed to have elected to be covered by the plan from the time of employment unless he rejects the plan prior to or at the time of employment. Each employee at the time of employment shall be given a written notice specifying his right to consent to or to reject such plan and a written statement setting forth the essential features of the plan.
Any employee covered by a plan may withdraw from the plan as of the beginning of any calendar quarter upon giving reasonable notice in writing directed to the employer.
The form of the statement and the forms of the notices required under this Section shall be approved by the Director of Employment Development.
If a voluntary plan does not provide for the assumption by an admitted disability insurer of the liability of the employer to pay the benefits afforded by the plan, the director shall not approve it unless the employer files with the director the bond of an admitted surety insurer conditioned on the payment by the employer of its obligations under the plan, deposits with the director securities approved by the director to secure the payment of the obligations, or deposits with the director an irrevocable letter of credit. The penal sum of the bond or the amount of the deposit of securities or letter of credit shall be determined by the director and shall be not less than the product obtained by multiplying the rate of worker contributions in the ensuing year, as determined in Section 984, by 0.5 of the estimated taxable wages prescribed by Section 985 to be paid to the employees for the ensuing year. Upon approval, the bond, money, or securities shall upon the director’s written order be deposited with the Treasurer for the purpose specified in this section. The Treasurer shall give a receipt for the deposits and the state shall be responsible for the custody and safe return of any securities so deposited.
Whenever an approved voluntary plan is insured by an admitted disability insurer, the insurer shall be substituted for the employer with respect to any assessments under this part which relate to the portion of the voluntary plan insured by such insurer.
An employer may, but need not, assume all or part of the cost of the plan, and may deduct from the wages of an employee covered by the plan, for the purpose of providing the disability benefits specified in this part, an amount not in excess of that which would be required by Sections 984 and 985 if the employee were not covered by the plan.
All deductions from the wages of an employee remaining in the possession of the employer upon its voluntary withdrawal of the plan as a result of plan contributions being in excess of plan costs, that are not disposed of in conformity with authorized regulations of the Director of Employment Development, shall be remitted to the department and deposited in the Disability Fund. If an employer fails to remit any deductions to the Disability Fund, the Director of Employment Development shall assess the amount thereof against the employer.
The provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to the assessment of contributions, and the provisions of Chapter 7 (commencing with Section 1701) of Part 1, with respect to the collection of contributions, shall apply to assessments provided by this section, except that interest may not accrue until 30 days after issuance of the notice of assessment.
With respect to individuals covered by a voluntary plan on January 1 of any calendar year for which the limitation on wages under Section 985 is increased or the tax rate under Section 984 is increased, the amount of the deduction on or after that date may be increased to apply to not more than the maximum limitation on taxable wages or to not more than the maximum tax rate, as applicable, without any further consent of the individual or approval of the Director of Employment Development, but only if such increase in the amount of the deductions is made effective as of January 1 of the affected calendar year.
All employee contributions and income arising therefrom received or retained by an employer under an approved voluntary plan are trust funds that are not considered to be part of an employer’s assets. An employer shall either maintain a separate, specifically identifiable account for voluntary plan trust funds in a financial institution, or an employer may transmit voluntary plan trust funds, including any earned interest or income, directly to the admitted disability insurer. If an employer, with prior approval from the Director of Employment Development, invests voluntary plan trust funds in securities purchased through a commercial bank under Article 4 of Chapter 10 of Division 1 of the Financial Code, the securities account shall be separately identifiable from any other securities accounts maintained by the employer. In the event of commingling of voluntary plan trust funds, or the bankruptcy or insolvency of the employer, or the appointment of a receiver for the business of the employer, those voluntary plan trust funds are entitled to the same preference as are the claims of the state under Sections 1701 and 1702.
The Director of Employment Development may terminate any voluntary plan if the director finds that there is danger that the benefits accrued or to accrue will not be paid, that the security for the payment is insufficient, or for other good cause shown. The Director of Employment Development shall give notice of their intention to terminate a plan to the employer, employee group, and insurer. The notice shall state the effective date and the reason for the withdrawal. The Director of Employment Development may change or stay the effective date of the termination.
Notwithstanding Section 3260.5, on the effective date of the termination of a plan by the Director of Employment Development, all moneys in the plan, including moneys paid by the employer, moneys paid by the employee, moneys owed to the voluntary plan by the employer but not yet paid to the plan, and any interest accrued on all these moneys, shall be remitted to the department and deposited into the Disability Fund.
If an employer fails to remit all moneys owed to the Disability Fund after termination of the plan, the Director of Employment Development shall make an assessment against the employer equal to the amount of the moneys owed. The Director of Employment Development shall also make an assessment against the employer for all benefits paid from the Disability Fund after the termination of the plan, less any moneys received from the employer after the termination of the plan.
The provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to the assessment of moneys, and the provisions of Chapter 7 (commencing with Section 1701) of Part 1, with respect to the collection of moneys owed, shall apply to assessments authorized under this section, except that interest may not accrue until 30 days after issuance of the notice of assessment.
The employer, employee group or insurer may, within 10 days from service of the notice, appeal to the Appeals Board. The 10-day period may be extended for good cause. The Appeals Board may prescribe by regulation the time, manner, method and procedure through which it may determine appeals under this section.
The payment of benefits from the Disability Fund and the transfer of moneys in the voluntary plan may not be delayed during an employer’s appeal of the termination of a voluntary plan.
An employee is no longer covered by an approved voluntary plan if a disability arose after the employment relationship with the voluntary plan employer ends, or if the Director of Employment Development terminates a voluntary plan in accordance with Section 3262.
An employee who has ceased to be covered by an approved voluntary plan shall, if otherwise eligible, thereupon immediately become entitled to benefits from the Disability Fund to the same extent as though there had been no exemption from contributions as provided in this chapter.
If any employer or insurer wholly or partially denies liability upon the claim of an employee for disability benefits under an approved plan, the employee may appeal the denial in the manner provided by law and authorized regulations for an appeal on a claim for benefits payable out of the Disability Fund. All decisions of the Appeals Board denying benefits under this section shall be subject to review by the courts of this State by the exclusive remedy of filing a petition for writ of mandate. No such petition may be filed, however, until the employee exhausts the administrative remedies provided for in this division, nor may any other action be commenced by an employee upon a denial of his claim by his employer or insurer, as the case may be, other than that prescribed herein.
If, on appeal, it is decided that an employee is entitled to receive disability benefits under an approved voluntary plan and the employer or insurer fails to pay the same within 15 days after notice of a decision by an administrative law judge or the appeals board, the director shall pay such benefits and shall assess the amount thereof against the employer or the insurer, and the provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of this division with respect to the assessment of contributions and the provisions of Chapter 7 (commencing with Section 1701) of Part 1 of this division with respect to the collection of contributions shall apply to the recovery of such benefit payments. Amounts so collected shall be deposited in the Disability Fund.
If an approved voluntary plan is not terminated because of the enactment of any law increasing the benefit amounts provided by Sections 2653 and 2655, and the employer or insurer fails to pay such increase under the plan, the director shall pay such benefits to an employee, if otherwise eligible, and shall assess the amount thereof against the employer or the insurer and the provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of this division with respect to the assessment of contributions and the provisions of Chapter 7 (commencing with Section 1701) of Part 1 of this division with respect to the collection of contributions shall apply to the recovery of such benefit payments. Amounts so collected shall be deposited in the Disability Fund.
The director shall in accordance with his or her authorized regulations determine the portion of the aggregate amount of refunds and credits to employees made under Section 1176 during any calendar year which is applicable to voluntary plans for which deductions were made under Section 3260, such determination to be based upon the relation during the preceding calendar year of the amount of wages subject to contributions to the Disability Fund to the amount of wages exempt from contributions to the Disability Fund under Section 3252.
Employers whose employees are participating in an approved voluntary plan and any insurer of an approved plan shall furnish such reports and information and make available to the department such records as the director may by authorized regulations require for the proper administration of this part.
The Director of Employment Development shall, in accordance with his authorized regulations, promptly furnish to employers, employees, or insurers, such information as may be required for the proper administration of an approved voluntary plan.
The director shall in accordance with his or her authorized regulations, determine each fiscal year the total amount expended for added administrative work arising out of voluntary plans.
The director shall approve any amendment to a voluntary plan adjusting the provisions thereof as to periods after the effective date of the amendment as to which he or she finds that the plan, as amended, will conform to the standards set forth in Section 3254, and that any of the following exist:
A majority of the employees covered by the plan have consented in writing to the amendment.
All of the employees covered by the plan who are adversely affected by the amendment have consented in writing to the amendment.
The insurer of such plan, if any, has certified to the director that notice of the amendment either separately or as a part of a new certificate or statement of coverage, has, at least 10 days prior to the effective date of the proposed amendment, been delivered to the employer for distribution to his or her employees within 10 days thereafter and has further certified that such notice specifically included notification to the employees covered by the plan of their right to withdraw from the plan.
Nothing contained in this section is intended to deny or limit the right of the director to make regulations supplementary thereto, nor on the general subject of requirements for amendments of voluntary plans.
The provisions of Article 9 (commencing with Section 1176) of Chapter 4 of Part 1 of this division shall apply to amounts collected under Sections 3252, 3260, and 3265, to amounts remitted to the Disability Fund under Section 3260, and to amounts paid to an employee by an employer or insurer after a final decision on appeal under Section 3264 to an administrative law judge or the appeals board that the employee is entitled to disability benefits.
CHAPTER 7. Paid Family Leave [3300. - 3308.]
The Legislature finds and declares all of the following:
It is in the public benefit to provide family temporary disability insurance benefits to workers to care for their family members. The need for family temporary disability insurance benefits has intensified as the participation of both parents in the workforce has increased, and the number of single parents in the workforce has grown. The need for partial wage replacement for workers taking family care leave will be exacerbated as the population of those needing care, both children and parents of workers, increases in relation to the number of working age adults.
Family Temporary Disability Insurance shall be known as Paid Family Leave.
Developing systems that help families adapt to the competing interests of work and home not only benefits workers, but also benefits employers by increasing worker productivity and reducing employee turnover.
The federal Family and Medical Leave Act (FMLA) and California’s Family Rights Act (CFRA) entitle eligible employees working for covered employers to take unpaid, job-protected leave for up to 12 workweeks in a 12-month period. Under the FMLA and the CFRA, unpaid leave may be taken for the birth, adoption, or foster placement of a new child; to care for a seriously ill child, parent, or spouse; or for the employee’s own serious health condition.
State disability insurance benefits currently provide wage replacement for workers who need time off due to their own nonwork-related injuries, illnesses, or conditions, including pregnancy, that prevent them from working, but do not cover leave to care for a sick or injured child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, or leave to bond with a new child.
The majority of workers in this state are unable to take family care leave because they are unable to afford leave without pay. When workers do not receive some form of wage replacement during family care leave, families suffer from the worker’s loss of income, increasing the demand on the state unemployment insurance system and dependence on the state’s welfare system.
It is the intent of the Legislature to create a family temporary disability insurance program to help reconcile the demands of work and family. The family temporary disability insurance program shall be a component of the state’s unemployment compensation disability insurance program, shall be funded through employee contributions, and shall be administered in accordance with the policies of the state disability insurance program created pursuant to this part. Initial and ongoing administrative costs associated with the family temporary disability insurance program shall be payable from the Disability Fund.
The purpose of this chapter is to establish, within the state disability insurance program, a family temporary disability insurance program. Family temporary disability insurance shall provide up to eight weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, domestic partner, or designated person, to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Nothing in this chapter shall be construed to abridge the rights and responsibilities conveyed under the California Family Rights Act or pregnancy disability leave.
An individual’s “weekly benefit amount” for periods of disability commencing before January 1, 2025, shall be the amount provided in Section 2655, and for periods of disability commencing on or after January 1, 2025, shall be the amount provided in paragraph (2). An individual is eligible to receive family temporary disability insurance benefits equal to one-seventh of the individual’s weekly benefit amount for each full day during which the individual is unable to work due to caring for a seriously ill or injured family member, bonding with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
For periods of disability commencing on or after January 1, 2025, the weekly benefit amount shall be as follows:
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is less than seven hundred twenty-two dollars and fifty cents ($722.50), then fifty dollars ($50).
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is more than 70 percent of the state average quarterly wage, the weekly benefit amount shall be equal to the greater of 70 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code, or 63 percent of the state average weekly wage.
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is seven hundred twenty-two dollars and fifty cents ($722.50) or more, but 70 percent or less than the state average quarterly wage, then the weekly benefit amount shall be equal to 90 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.
For purposes of this subdivision, “state average weekly wage” and “state average quarterly wage” have the same meanings as defined in subdivision (g) of Section 2655.
The maximum amount payable to an individual during any disability benefit period for family temporary disability insurance shall be eight times the individual’s “weekly benefit amount,” but in no case shall the total amount of benefits payable be more than the total wages paid to the individual during the individual’s disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
No more than eight weeks of family temporary disability insurance benefits shall be paid within any 12-month period.
An individual shall file a claim for family temporary disability insurance benefits not later than the 41st consecutive day following the first compensable day with respect to which the claim is made for benefits, which time shall be extended by the department upon a showing of good cause. If a first claim is not complete, the claim form shall be returned to the claimant for completion and it shall be completed and returned not later than the 10th consecutive day after the date it was mailed by the department to the claimant, except that such time shall be extended by the department upon a showing of good cause.
This section shall remain in effect only until Section 3301.5 is incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project, and as of that date is repealed.
This section shall become operative on July 1, 2028.
The purpose of this chapter is to establish, within the state disability insurance program, a family temporary disability insurance program. Family temporary disability insurance shall provide up to eight weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Nothing in this chapter shall be construed to abridge the rights and responsibilities conveyed under the California Family Rights Act or pregnancy disability leave.
An individual’s “weekly benefit amount” for periods of disability commencing before January 1, 2025, shall be the amount provided in Section 2655, and for periods of disability commencing on or after January 1, 2025, shall be the amount provided in paragraph (2). An individual is eligible to receive family temporary disability insurance benefits equal to one-seventh of the individual’s weekly benefit amount for each full day during which the individual is unable to work due to caring for a seriously ill or injured family member, bonding with a minor child within one year of the birth or placement of the child in connection with foster care or adoption, or participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
For periods of disability commencing on or after January 1, 2025, the weekly benefit amount shall be as follows:
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is less than seven hundred twenty-two dollars and fifty cents ($722.50), then fifty dollars ($50).
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is more than 70 percent of the state average quarterly wage, the weekly benefit amount shall be equal to the greater of 70 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code, or 63 percent of the state average weekly wage.
When the amount of wages paid to the individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest is seven hundred twenty-two dollars and fifty cents ($722.50) or more, but 70 percent or less than the state average quarterly wage, then the weekly benefit amount shall be equal to 90 percent of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.
For purposes of this subdivision, “state average weekly wage” and “state average quarterly wage” have the same meanings as defined in subdivision (g) of Section 2655.
The maximum amount payable to an individual during any disability benefit period for family temporary disability insurance shall be eight times the individual’s “weekly benefit amount,” but in no case shall the total amount of benefits payable be more than the total wages paid to the individual during the individual’s disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
No more than eight weeks of family temporary disability insurance benefits shall be paid within any 12-month period.
An individual may initiate the claims process up to 30 days in advance of the anticipated first compensable day. An individual shall file a claim for family temporary disability insurance benefits not later than the 41st consecutive day following the first compensable day with respect to which the claim is made for benefits, which time shall be extended by the department upon a showing of good cause. If a first claim is not complete, the claim form shall be returned to the claimant for completion and it shall be completed and returned not later than the 10th consecutive day after the date it was mailed by the department to the claimant, except that the time shall be extended by the department upon a showing of good cause.
This section shall become operative when incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project.
On and after July 1, 2028, for purposes of this part:
“Care recipient” means the family member who is receiving care for a serious health condition or the new child with whom the care provider is bonding. For the purposes of a qualifying exigency as set forth in Section 3302.2, “care recipient” also includes the military member, or child or parent of the military member, who is receiving assistance, or the employee who is participating in a qualifying exigency.
“Care provider” means the family member who is providing the required care for a serious health condition; the family member who is bonding with the new child; or the employee who is participating in a qualifying exigency as provided in Section 3302.2.
“Child” means a biological, adopted, or foster son or daughter, a stepson or stepdaughter, a legal ward, a son or daughter of a domestic partner, or the person to whom the employee stands in loco parentis.
“Designated person” means any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.
“Domestic partner” has the same meaning as defined in Section 297 of the Family Code.
“Family care leave” means any of the following:
Leave to bond with a minor child within the first year of the child’s birth or placement in connection with foster care or adoption.
Leave to care for a child, parent, grandparent, grandchild, sibling, spouse, domestic partner, or designated person who has a serious health condition.
Leave to participate in a qualifying exigency as provided in Section 3302.2.
“Family member” means a child, parent, grandparent, grandchild, sibling, spouse, domestic partner, or designated person.
“Grandchild” means a child of the employee’s child.
“Grandparent” means a parent of the employee’s parent.
“Military member” means a child, spouse, domestic partner, or parent of the employee, where the military member is on covered active duty or call to active duty in the Armed Forces of the United States as defined in subdivision (a) of Section 3302.1.
“Parent” means a biological, foster, or adoptive parent, a parent-in-law, a stepparent, a legal guardian, or other person who stood in loco parentis to the employee when the employee was a child.
“Parent-in-law” means the parent of a spouse or a domestic partner.
“Serious health condition” means an illness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice, or residential health care facility, or continuing treatment or continuing supervision by a health care provider, as defined in Section 12945.2 of the Government Code.
“Sibling” means a person related to another person by blood, adoption, or affinity through a common legal or biological parent.
“Spouse” means a partner to a lawful marriage.
“Valid claim” means any claim for family temporary disability insurance benefits made in accordance with the provisions of this code, and any rules and regulations adopted thereunder, if the individual claiming benefits is unemployed and has been paid the necessary wages in employment for employers to qualify for benefits under Section 2652 and is caring for a seriously ill family member, or bonding with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption.
“Twelve-month period,” with respect to any individual, means the 365 consecutive days that begin with the first day the individual first establishes a valid claim for family temporary disability benefits.
This section shall become operative on July 1, 2028.
For purposes of this chapter:
“Covered active duty” means, with respect to a member of the regular Armed Forces of the United States, duty during the deployment of the member with the regular armed forces to a foreign country and, with respect to a member of the reserve components of the Armed Forces of the United States, duty during the deployment of the member of those reserve components to a foreign country under a federal call or order to active duty.
“Disability benefit period” with respect to any individual, means the period of unemployment beginning with the first day an individual establishes a valid claim for family temporary disability insurance benefits to care for a seriously ill family member, to bond with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Periods of family care leave for the same care recipient within a 12-month period shall be considered one disability benefit period.
Periods of disability for pregnancy, as defined in Section 2608, and periods of family care leave for bonding associated with the birth of that child shall be considered one disability benefit period.
This section shall become operative on January 1, 2021.
For purposes of this chapter, a “qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States” means any of the following:
Activities undertaken within seven calendar days from the date that a spouse, domestic partner, child, or parent has been notified of an impending call or order to covered active duty in the Armed Forces of the United States to address any issue that arises from the call or order.
Attendance in either or both of the following:
An official ceremony, program, or event sponsored by the military that is related to the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent.
A family support or assistance program and informational briefing sponsored or promoted by the military, military service organizations, or the American Red Cross that is related to the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent.
Any of the following activities related to the biological, adopted, or foster child, stepchild, legal ward, or child for whom the spouse, domestic partner, child, or parent in the Armed Forces of the United States stands in loco parentis, who is either not more than 18 years of age or, if equal to or more than 18 years of age, is incapable of self-care because of a disability at the time that the paid leave is to commence:
Enrolling or transferring the child to a new school or day care facility when enrollment or transfer is necessitated by the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Attending meetings with staff at the child’s school or day care facility, including, but not limited to, meetings with school officials regarding disciplinary measures, parent-teacher conferences, or meetings with school counselors, when these meetings are necessary due to circumstances arising from the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
To make financial and legal arrangements for either or both of the following purposes:
Attending counseling provided by someone other than a health care provider, for oneself, for the spouse, domestic partner, child, or parent in the Armed Forces of the United States, or for the biological, adopted, or foster child, a stepchild, or a legal ward of the spouse, domestic partner, child, or parent in the Armed Forces of the United States, or a child for whom this person stands in loco parentis, who is either not more than 18 years of age, or equal to or more than 18 years of age and incapable of self-care because of a disability at the time that paid family leave is to commence, provided that the need for counseling arises from the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Accompanying a spouse, domestic partner, child, or parent in the Armed Forces of the United States while that individual is on short-term, temporary, rest and recuperation leave during the period of deployment in a foreign country, provided that any leave taken for this purpose is for not more than 15 calendar days beginning on the date of commencement for the rest and recuperation leave.
Attending arrival ceremonies, reintegration briefings and events, and any other official ceremony or program sponsored by the military for a period of 90 days following the termination of the covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Addressing issues that arise from the death of the spouse, domestic partner, child, or parent in the Armed Forces of the United States while on covered active duty status, including meeting and recovering the body of the spouse, domestic partner, child, or parent in the Armed Forces of the United States, making funeral arrangements, and attending funeral services.
Any of the following activities related to the parent of the spouse, domestic partner, child, or parent in the Armed Forces of the United States while the parent of the spouse, domestic partner, child, or parent in the armed forces during covered active duty is incapable of self-care by requiring active assistance or supervision over daily self-care in three or more of the activities of daily living or instrument activities of daily living:
Arranging for alternative care for the parent of the spouse, domestic partner, child, or parent in the Armed Forces of the United States when the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States necessitates a change in the existing care arrangement for the parent.
Providing care for the parent who is incapable of self-care on an urgent, immediate need basis when the need to provide this care arises from the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Admitting or transferring the parent to a care facility when admission or transfer is necessitated by the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Attending meetings with staff at the parent’s care facility, including, but not limited to, meetings with hospice or social service providers of the parent of the spouse, domestic partner, child, or parent in the Armed Forces of the United States when these meetings are necessary due to circumstances arising from the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States.
For purposes of this subdivision, “activities of daily living” include adaptive activities, such as caring appropriately for one’s grooming and hygiene, bathing, dressing, and eating. Instrumental activities of daily living include, but are not limited to, cooking, cleaning, shopping, taking public transportation, paying bills, maintaining a residence, using telephones and directories, and using a post office.
Any other activities to address other events that arise out of the covered active duty or call to covered active duty of the spouse, domestic partner, child, or parent in the Armed Forces of the United States, provided that the employer and employee agree that this leave shall qualify as an exigency, and agree to both the timing and duration of this leave.
This section shall become operative on January 1, 2021.
On and after July 1, 2028, only if the director makes both of the findings described in subdivision (b), an individual shall be deemed eligible for family temporary disability insurance benefits equal to one-seventh of their weekly benefit amount on any day in which the individual is unable to perform their regular or customary work because of any of the following:
The individual is bonding with a minor child during the first year after the birth or placement of the child in connection with foster care or adoption.
The individual is caring for a seriously ill child, parent, grandparent, grandchild, sibling, spouse, domestic partner, or designated person.
When an individual requests for the first time family temporary disability insurance benefits to care for a designated person, the individual shall do both of the following:
The individual shall identify the designated person.
The individual shall, under penalty of perjury, attest to either of the following:
How the individual is related by blood to the designated person.
(II) How the individual’s association with the designated person is the equivalent of a family relationship.
The individual is participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
An individual shall be deemed eligible for family temporary disability insurance benefits described in subdivision (a) only if the director finds both of the following:
The individual has made a claim for temporary disability benefits as required by authorized regulations.
The individual has filed a certificate, as required by Sections 2708 and 2709, or for purposes of participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, has provided the information requested pursuant to Section 3307.
This section shall become operative on July 1, 2028.
An individual is not eligible for family temporary disability insurance benefits with respect to any day that any of the following apply:
The individual has received, or is entitled to receive, unemployment compensation benefits under Part 1 (commencing with Section 100) or under an unemployment compensation act of any other state or of the federal government.
The individual has received, or is entitled to receive, “other benefits” in the form of cash benefits as defined in Section 2629.
The individual has received, or is entitled to receive, state disability insurance benefits under Part 2 (commencing with Section 2601) or under a disability insurance act of any other state.
Another family member, as defined in Section 3302, is ready, willing, and able and available for the same period of time in a day that the individual is providing the required care or participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
An individual who is entitled to leave under the FMLA and the CFRA shall take Family Temporary Disability Insurance (FTDI) leave concurrent with leave taken under the FMLA and the CFRA.
As a condition of an employee’s initial receipt of family temporary disability insurance benefits during any 12-month period in which an employee is eligible for these benefits, an employer may require an employee to take up to two weeks of earned but unused vacation leave prior to the employee’s initial receipt of these benefits.
This subdivision may not be construed in a manner that relieves an employer of any duty of collective bargaining the employer may have with respect to the subject matter of this subdivision.
This subdivision shall not apply to any period of disability commencing on or after January 1, 2025.
Eligible workers shall receive benefits in accordance with provisions established under this division.
This section shall remain in effect only until Section 3304.5 is incorporated in the Employment Development Department’s integrated claims management system as part of the EDDNext project, and as of that date is repealed.
The department shall issue the initial payment for family temporary disability insurance benefits under this chapter to a monetarily eligible claimant who is otherwise determined by the department as eligible to receive those benefits within 14 days of receipt of the claimant’s properly completed first family temporary disability insurance claim or as soon as eligibility begins, whichever occurs later.
This section shall become operative when incorporated into the Employment Development Department’s integrated claims management system as part of the EDDNext project.
If the director finds that any individual falsely certifies the medical condition of any person in order to obtain family temporary disability insurance benefits, with the intent to defraud, whether for the maker or for any other person, the director shall assess a penalty against the individual in the amount of 25 percent of the benefits paid as a result of the false certification. The provisions of Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to assessments, the provisions of Article 9 (commencing with Section 1176) of Chapter 4 of Part 1, with respect to refunds, and the provisions of Chapter 7 (commencing with Section 1701) of Part 1, with respect to collections, shall apply to the assessments provided by this section. Penalties collected under this section shall be deposited in the contingent fund.
The director may request additional medical evidence to supplement the first or any continued claim if the additional evidence can be procured without additional cost to the care recipient. The director may require that the additional evidence include any or all of the following information:
Identification of diagnoses.
Identification of symptoms.
A statement setting forth the facts of the care recipient’s serious health condition that warrants the participation of the employee. The statement shall be completed by any of the following people:
The physician or practitioner treating the care recipient.
The registrar, authorized medical officer, or other duly authorized official of the hospital or health facility treating the care recipient.
An examining physician or other representative of the department.
Except as provided in Section 2709, the director may require the care recipient to submit to reasonable examinations for the purpose of determining all of the following:
Whether a serious health condition exists.
Whether a care provider’s participation is warranted.
The period of time that the care provider’s participation is warranted.
When an employee requests for the first time leave because of a qualifying exigency arising out of the covered active duty or call to covered active duty or notification of an impending call or order to covered active duty of the employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, the department may require the employee to provide a copy of the covered active duty orders or other documentation issued by the military that indicates that the employee’s spouse, domestic partner, child, or parent is in the Armed Forces of the United States, is on covered active duty or call to covered active duty status, and the dates of the covered active duty service. This information need only be provided to the department. A copy of new active duty orders or other documentation issued by the military may be required by the department if the need for leave because of a qualifying exigency arises out of a different covered active duty or call to covered active duty or notification of an impending call or order to covered active duty of the same or a different eligible family member.
The department may require that a request for paid family leave for any qualifying exigency specified in Section 3302.2 be supported by sufficient information from the employee that sets forth the following:
A statement or description, signed by the employee, of appropriate facts regarding the qualifying exigency for which paid family leave is requested. The facts shall be sufficient to support the need for leave and may include information on the type of qualifying exigency for which leave is requested and any available written documentation that supports the request for leave. For example, this information may include a copy of a meeting announcement for informational briefings sponsored by the military, a document confirming an appointment with a counselor or school official, or a copy of a bill for services for the handling of legal or financial affairs.
The approximate date of the commencement or pending commencement of the qualifying exigency.
If an employee requests leave because of a qualifying exigency for a single, continuous period of time, the beginning and end dates for that leave.
If an employee requests leave because of a qualifying exigency on an intermittent basis, an estimate of the frequency and duration of the qualifying exigency.
If the qualifying exigency involves meeting with a third party, appropriate contact information for the individual or entity with whom the employee is meeting, including, but not limited to, the name, title, organization, address, telephone number, fax number, and email address, if available, and a brief description of the purpose of the meeting.
If the qualifying exigency involves rest and recuperation leave, a copy of the rest and recuperation orders for the employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States, or other documentation issued by the military that indicates that this person has been granted rest and recuperation leave, and the dates of that rest and recuperation leave.
If an employee submits complete and sufficient information to support the employee’s request for leave because of a qualifying exigency, the department may not request additional information from the employee. However, if the qualifying exigency involves meeting with a third party, the department may contact the individual or entity with whom the employee is meeting for purposes of verifying a meeting or appointment schedule and the nature of the meeting between the employee and the specified individual or entity. The employee’s permission is not required in order to verify meetings or appointments with third parties, but no additional information may be requested by the department. The department also may contact an appropriate unit of the Department of Defense to request verification that an individual is on covered active duty or call to covered active duty or has been notified of an impending call or order to covered active duty. No additional information may be requested, and the employee’s permission is not required.
This section shall become operative on January 1, 2021.
In addition to English, the department shall distribute the application for family temporary disability insurance benefits in all non-English languages spoken by a substantial number of non-English-speaking applicants. As used in this section, “substantial number of non-English-speaking applicants” has the same meaning as “substantial number of non-English-speaking people” is defined in Section 7296.2 of the Government Code.
This section shall become operative on January 1, 2025.
PART 3. EXTENDED UNEMPLOYMENT COMPENSATION [3501. - 3751.]
CHAPTER 1. General Provisions [3501. - 3506.]
The purpose of this part is to compensate in part for the added wage loss sustained by individuals because of the extended duration of unemployment during prolonged periods of cyclical and technological unemployment in California. This part may be cited as the “Miller-Collier Act.”
Except as otherwise provided, the provisions and definitions of Part 1 of this division apply to this part. In case of any conflict between the provisions of Part 1 and the provisions of this part, the provisions of this part shall prevail with respect to extended unemployment compensation.
The provisions of Part 2 of this division do not apply to this part.
For the purposes of this part:
“Extended duration benefits” means the extended unemployment compensation benefits payable under this part.
“Normal benefits” means the unemployment compensation benefits payable under Part 1 (commencing with Section 100) of this division.
“Exhaustee” means an individual who is not entitled to normal benefits due to either of the following:
He or she has an unexpired benefit year and has exhausted his or her normal benefits.
His or her most recent benefit year expired in the week in which he or she filed a primary claim or in the immediately preceding 13 calendar weeks and he or she is not entitled to establish a benefit year.
“Insured unemployment rate” for a week means the percentage arrived at by dividing:
“Extended benefit period” means the period beginning with the third week after the first week for which there is an “on” indicator, and ending with the third week after the first week for which there is an “off” indicator, except no extended benefit period shall last for a period of less than 13 consecutive weeks and no extended benefit period may begin before the 14th week after the close of a prior extended benefit period. There is an “on” indicator for a week if the insured unemployment rate equals or exceeds 6 percent. There is an “off” indicator for a week if the insured unemployment rate is less than 6 percent.
“Primary claim” means the first claim for extended duration benefits filed by an exhaustee with an effective date within an extended benefit period for the purpose of establishing an extended duration award and an extended duration period.
“Extended duration award” means the maximum amount of extended duration benefits allowable under this part to an eligible exhaustee.
“Extended duration period” means a period beginning with the first day of the week with respect to which an exhaustee filed a valid primary claim and ending with the last week which begins on or before the last day of the fifth calendar month following the calendar month which contains the extended duration week or a major portion of the extended duration week in which the valid primary claim was filed.
“Parent benefit year” means the benefit year with respect to which an individual becomes an exhaustee.
“Federal act” means the “Federal-State Extended Unemployment Compensation Act of 1970”.
The director shall during the week immediately preceding each calendar week compute the insured unemployment rate for that calendar week. The computation shall be a public record.
Notwithstanding any other provision of this part, no payment of extended duration benefits shall be made to any individual for any week or part of any week with respect to which he is entitled to receive unemployment compensation benefits as a result of participation by this state pursuant to the provision of any federal law providing for the payment of such benefits or as a result of the application in any other manner to this state of any federal law providing for the payment of such benefits.
With respect to weeks commencing on or after November 29, 1970, this subdivision shall apply and subdivision (a) of this section shall not apply to benefits under the “Federal-State Extended Unemployment Compensation Act of 1970”.
Notwithstanding any other provision of this part, if an individual would have rights to receive benefits under the federal act within an “extended benefit period” under the federal act, the director shall cancel such individual’s rights to extended duration benefits within that “extended benefit period”.
A cancellation under this section does not affect extended duration benefits paid with respect to a week preceding such cancellation.
Notwithstanding a cancellation under this section, an individual otherwise qualified for extended duration benefits during an “extended benefit period” under the federal act, may, upon the expiration of his “eligibility period” specified by the federal act, establish rights to, and be paid, extended duration benefits subject to the following conditions:
If the individual has filed a primary claim in the “extended benefit period”, under the federal act, he may reestablish his extended duration benefit rights, if the extended duration period would not have expired.
If the individual has not filed a primary claim in the “extended benefit period”, under the federal act, and he has claimed benefits pursuant to the federal act during an extended duration week in such “extended benefit period”, he may file a primary claim effective with that extended duration week, if the extended duration period would not have expired.
If the individual has not filed a primary claim in the “extended benefit period”, under the federal act, and he has claimed benefits pursuant to the federal act but not during an extended duration week in such “extended benefit period”, he may file a primary claim in an extended duration week.
The individual shall not be paid extended duration benefits for any week for which he receives federal benefits.
An individual may be paid extended duration benefits with respect to a parent benefit year only to the extent that the total amount of such extended duration benefits and benefits paid under the federal act since the beginning of such parent benefit year does not exceed 13 times his weekly benefit amount or one-half of the maximum amount of normal benefits payable to him during that parent benefit year, whichever is the lesser.
Notwithstanding any other provision of this part, the Governor may, if permitted by federal law, suspend the payment of extended duration benefits under this part, to the extent necessary to ensure that otherwise eligible individuals are not denied, in whole or in part, the receipt of emergency unemployment compensation benefits authorized by the federal Emergency Unemployment Compensation Act of 1991 (P.L. 102-164) or any extension of that act, including, but not limited to, Public Law 102-244, and that the state receives maximum reimbursement from the federal government for the payment of those emergency benefits.
CHAPTER 2. Extended Duration Benefits [3551. - 3751.]
ARTICLE 1. Eligibility and Disqualifications [3551. - 3553.]
Extended duration benefits are payable from the Unemployment Fund to unemployed individuals who are eligible under this part.
An unemployed individual is eligible to receive extended duration benefits with respect to any week only if the director finds that:
An extended duration award has been established for the individual.
The week is:
Within the extended duration period of the award; and
Within an extended benefit period.
He or she is not subject to disqualification, and is not under disqualification for normal benefits, under any provision of Part 1 (commencing with Section 100) of this division.
He or she had earnings from employment subject to the provisions of this division which exceed 40 times his or her most recent weekly benefit amount in the base period in which he or she exhausted all rights to regular compensation.
For the purpose of this section “wages” includes wages due to an individual but unpaid within the time limit provided by law.
The filing of a valid primary claim by an exhaustee shall constitute an election by him to claim extended duration benefits to the exclusion of filing a new claim for normal benefits for any week of unemployment subsequent to the filing of such primary claim for which extended duration benefits are payable to him.
ARTICLE 2. Computation (Amount and Duration) [3601. - 3603.]
An exhaustee’s weekly benefit amount under an extended duration award shall be the same as his weekly benefit amount for the parent benefit year.
An exhaustee’s extended duration award during any one extended duration period shall be 13 times his weekly benefit amount or one-half of the maximum amount of normal benefits payable to him during his parent benefit year, whichever is the lesser.
Only one extended duration award may be established for an exhaustee based on any one parent benefit year.
ARTICLE 3. Filing, Determination, and Payment of Extended Duration Benefit Claims [3651. - 3656.]
Claims for extended duration benefits shall be made as provided in this article.
An exhaustee who desires to claim extended duration benefits shall file a valid primary claim. A primary claim for extended duration benefits shall be valid only if its effective date is within an extended benefit period and the individual filing it is an unemployed exhaustee. For the purpose of determining whether a primary claim is a “valid primary claim” within the meaning of this section, an individual otherwise unemployed shall be deemed unemployed even though wages, as defined in Section 1252, which are for a period subsequent to the termination of performance of services are payable with respect to the week for which the individual files the claim.
The effective date of a valid primary claim shall be determined in the same manner as the effective date of a new claim for normal benefits pursuant to Section 1326.
The department shall give a notice of the filing of a primary claim or an additional claim to the employing unit by which the exhaustee was last employed immediately preceding the filing of the claim unless the additional claim is the result of the filing of a partial claim as defined by the department, there has not been a subsequent employing unit which is designated as the last employer, and there is no separation issue. The employing unit so notified shall submit within 10 days after the mailing of the notice any facts then known which may affect the exhaustee’s eligibility for extended duration benefits. The 10-day period may be extended for good cause. If after the 10-day period the employing unit acquires knowledge of facts which may affect the eligibility of the exhaustee and those facts could not reasonably have been known within the period, the employing unit shall within 10 days of acquiring that knowledge submit those facts to the department, and the 10-day period may also be extended for good cause.
For the purpose of determining whether an unemployed individual meets the eligibility requirements of subdivision (e) of Section 3552, the director may pursuant to his authorized regulations require that wage and employment information shall be submitted to the director, within 10 days after the mailing of a request by the director, by any or all of the following:
Each employing unit subsequent to the end of the base period of the new claim and prior to the effective date of a valid primary claim for extended duration benefits.
Each employing unit in the four quarters immediately preceding the beginning of the base period of the new claim.
The 10-day period may be extended for good cause.
Any employing unit who fails to furnish wage information requested by the director pursuant to Section 3654.1 shall be subject to a penalty of ten dollars ($10) for each such report not submitted. The director shall assess the penalty and the provisions of Part 1 (commencing with Section 100) of this division with respect to assessments, refunds, and collections shall apply. Penalties collected under this section shall be deposited in the Unemployment Fund.
If any employing unit fails to respond to a request for wage information within the period prescribed by Section 3654.1, the director shall make a determination based upon available information.
The department shall consider the facts submitted by an employing unit pursuant to Section 3654.1 and make a determination as to the exhaustee’s eligibility for extended duration benefits under subdivision (e) of Section 3552. The department shall promptly notify the exhaustee and any employing unit who prior to the determination has submitted any facts pursuant to Section 3654.1 of the determination and the reasons therefor. The exhaustee and the employing unit may appeal therefrom to an administrative law judge within 30 days from service of notice of the determination. The 30-day period may be extended for good cause. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
The Employment Development Department shall consider the facts submitted by an employer pursuant to Section 3654 and, if benefits are claimed subsequent to the filing of the extended duration benefits claim, make a determination as to the exhaustee’s eligibility for the extended duration benefits. The Employment Development Department shall promptly notify the exhaustee and any employer who prior to the determination has submitted any facts pursuant to Section 3654 of the determination and the reasons therefor. The exhaustee and the employer may appeal therefrom to an administrative law judge within 30 days from service of notice of the determination. The 30-day period may be extended for good cause. The Director of Employment Development shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall take effect on July 1, 2015.
Upon the filing of a valid primary claim by an exhaustee, the department shall promptly make an extended duration award computation that shall set forth the maximum amount of extended duration benefits potentially payable during the extended duration period, the weekly benefit amount, and the expiration date of the extended duration period. The department shall promptly notify the exhaustee of the computation. The exhaustee may, within 30 days after the service of the notice of computation, protest its accuracy. The 30-day period may be extended for good cause. The department shall consider the protest and shall promptly notify the exhaustee of the recomputation or denial of recomputation. An appeal may be taken from a notice of denial of recomputation in the manner prescribed in Section 3655. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall take effect on July 1, 2015.
ARTICLE 4. Reserve Accounts [3701. - 3702.]
An employer that is entitled under Section 3654 to notice of the filing of a primary claim or additional claim and that, within 10 days after mailing of the notice, submits to the department any facts within its possession disclosing whether the exhaustee left the most recent employment with the employer voluntarily and without good cause or was discharged from the employment for misconduct connected with their work, or whether the claimant was a student employed on a temporary basis and whose employment began within, and ended with their leaving to return to school at the close of, their vacation period, or whether the claimant left the employer’s employ to accompany their spouse or domestic partner to a place or join their spouse at a place from which it is impractical to commute to the employment, and to which a transfer of the claimant by the employer is not available, or whether the claimant’s discharge or quit from their most recent employer was the result of an irresistible compulsion to use or consume intoxicants, including alcoholic beverages, or whether the claimant left the employer’s employ to protect their family or themselves from domestic violence abuse, or whether the claimant left the employer’s employ to take a substantially better job, shall be entitled to a ruling as prescribed by this section. The period during which the employer may submit these facts may be extended by the director for good cause.
For purposes of this section, “spouse” includes a person to whom marriage is imminent, and “domestic partner” includes a person to whom a domestic partnership, as described in Section 297 of the Family Code, is imminent.
The department shall consider these facts together with any information in its possession. If the employer is entitled to a determination pursuant to Section 3655, the department shall promptly notify the employer of its ruling as to the cause of the termination of the exhaustee’s most recent employment. The employer may appeal from a ruling or reconsidered ruling to an administrative law judge within 30 days after service of notice of the ruling or reconsidered ruling. The 30-day period may be extended for good cause, which shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect. The director shall be an interested party to an appeal. The department may for good cause reconsider a ruling or reconsidered ruling within either five days after the date an appeal to an administrative law judge is filed or, if an appeal is not filed, within 30 days after service of notice of the ruling or reconsidered ruling, except that a ruling or reconsidered ruling that related to a determination that is reconsidered pursuant to subdivision (a) of Section 1332 may also be reconsidered by the department within the time provided for reconsideration of that determination.
For purposes of this section only, if the claimant voluntarily leaves the employer’s employ without notification to the employer of the reasons therefor, and if the employer submits all of the facts within its possession concerning the leaving within the applicable time period referred to in this section, the leaving shall be presumed to be without good cause.
An individual whose employment is terminated under the compulsory retirement provisions of a collective bargaining agreement to which the employer is a party shall not be deemed to have voluntarily left their employment without good cause.
Rulings under this section shall have the effect prescribed by Section 1032.
This section shall become operative on July 1, 2015.
Extended duration benefits, to the extent that such extended duration benefits are not reimbursed or reimbursable by the federal government to the State of California, shall be charged except as provided by Section 1032, 1032.5, 1034, 1036, 1335, 1338, or 1380, against the reserve account of the exhaustee’s employer during his or her base period. If the individual performed services in employment for more than one employer during his or her base period, unemployment compensation benefits paid to him or her shall be charged against the respective reserve accounts of such employers in the proportion that the total wages paid to the individual in employment for each employer bears to the total wages paid to the individual in employment for all employers during the base period.
ARTICLE 5. Overpayments [3751. - 3751.]
The provisions of Article 4 (commencing with Section 1375) of Chapter 5 of Part 1 of this division are modified in the following respects:
In the absence of fraud, misrepresentation, or willful nondisclosure, the notice of overpayment of extended duration benefits shall be served by the Employment Development Department not later than one year after the close of the extended duration period in which the overpayment was made.
The Director of Employment Development may offset an overpayment of extended duration benefits, or federal-state extended benefits, or unemployment compensation benefits against any of such three types of benefits or against disability benefits to which the liable person may become entitled under this division. The Director of Employment Development may offset the amount of any such overpayments within any of the periods prescribed by subdivision (b) of Section 1379, and further within the current extended duration period or current extended benefit period established under Part 4 (commencing with Section 4001) of this division or any extended benefit period or any extended duration period which begins during the three-year period next succeeding the date of the service of such notice of overpayment.
PART 4. FEDERAL-STATE EXTENDED COMPENSATION [4001. - 4751.]
CHAPTER 1. General Provisions [4001. - 4004.]
The purpose of this part is to provide that payment of extended compensation, in accordance with the “Federal-State Extended Unemployment Compensation Act of 1970”, as amended by the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), shall be made, for any week of unemployment which begins in the individual’s eligibility period, to individuals who have exhausted all rights to regular compensation under this division and who have no rights to regular compensation with respect to such week under this division or any other state unemployment compensation law or to compensation under any other federal law. For purposes of this section, an individual shall have exhausted his rights to regular compensation under any state law (A) when no payments of regular compensation can be made under such law because such individual has received all regular compensation available to him based on wage credits for his base period, or (B) when his rights to such compensation have terminated by reason of the expiration of the benefit year with respect to which such rights existed. Except where inconsistent with the provisions of the “Federal-State Extended Unemployment Compensation Act of 1970”, as amended by the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), the terms and conditions of this division which apply to claims for regular compensation and to the payment thereof shall apply to claims for extended compensation and to the payment thereof under such federal act. This part shall be operative on September 25, 1982, and extended compensation shall be payable as provided by the Federal-State Extended Unemployment Compensation Act of 1970, as amended by the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), subject to limitations provided by that act, with respect to weeks of unemployment and extended benefit periods beginning after September 25, 1982. The provisions of this section in effect prior to the amendments by the Omnibus Budget Reconciliation Act of 1981 shall continue to apply to weeks beginning after November 28, 1970, and before September 25, 1982.
Except as otherwise provided, the provisions and definitions of Part 1 (commencing with Section 100) apply to this part. In case of any conflict between the provisions of Part 1 and the provisions of this part, the provisions of this part shall prevail with respect to federal-state extended benefits.
The provisions and definitions of terms in the Federal-State Extended Unemployment Compensation Act of 1970, as amended by the federal Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), apply to this part. “Federal-state extended benefits” means benefits payable under this part.
To the extent that the provisions and definitions of terms in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) are in effect in federal law and are in conflict with, or supplement the provisions and definitions applicable pursuant to subdivision (a), the provisions and definitions of the American Recovery and Reinvestment Act of 2009 shall apply to this part.
To the extent that the provisions and definitions of terms in the federal Families First Coronavirus Response Act (Public Law 116-127) are in effect in federal law and are in conflict with, or supplement the provisions and definitions applicable pursuant to, subdivision (a), the provisions and definitions of the federal Families First Coronavirus Response Act shall apply to this part.
There is an “on” indicator for purposes of federal-state extended benefits for a week if one of the following applies:
With respect to weeks of unemployment beginning on or after February 1, 2009, and continuing until the week ending four weeks prior to the last week for which 100 percent federal sharing is authorized by subdivision (a) of Section 2005 of Public Law 111-5 for all claims, except for reimbursable entities described in Section 3306(c)(7) of the Internal Revenue Code, both of the following apply:
The average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the period consisting of the most recent three months for which data for all states are published before the close of that week, equals or exceeds 6.5 percent.
The average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the three-month period referred to in subparagraph (A) equals or exceeds 110 percent of that average rate of total unemployment for either or both of the corresponding three-month periods ending in the two preceding calendar years.
With respect to weeks of unemployment beginning on or after March 18, 2020, and continuing until the week ending four weeks prior to the last week for which 100 percent federal sharing is authorized by the federal Families First Coronavirus Response Act (Public Law 116-127), which shall be interpreted to retroactively include any subsequent extension of the last week for which 100 percent of federal sharing is authorized under that act and shall take effect as if the amendment extending full federal funding was enacted as part of that act, or for weeks of unemployment ending four weeks prior to the last week for which Congress, pursuant to any future legislation, has authorized 100 percent federal sharing, for all claims, except for reimbursable entities described in Section 3306(c)(7) of the Internal Revenue Code as that section read as of the operative of date of the act adding this paragraph, both of the following apply:
The average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the period consisting of the most recent three months for which data for all states are published before the close of that week, equals or exceeds 6.5 percent.
The average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the three-month period referred to in subparagraph (A) equals or exceeds 110 percent of that average rate of total unemployment for either or both of the corresponding three-month periods ending in the two preceding calendar years.
There is an “off” indicator for a week if, for the period consisting of that week, and the 12 weeks immediately preceding the week, none of the criteria specified in subdivision (c) results in an “on” indicator.
For purposes of this section, the rate of insured unemployment for a 13-week period shall be determined by reference to the average monthly covered employment for the first four of the most recent six calendar quarters ending before the close of the period.
The indicators specified in subdivisions (c) and (d) shall be operative only if mandated or permitted by federal law.
Notwithstanding any other provision of this part, the Governor may, if permitted by federal law, suspend the payment of extended duration benefits under this part, to the extent necessary to ensure that otherwise eligible individuals are not denied, in whole or in part, the receipt of emergency unemployment compensation benefits authorized by the federal Supplemental Appropriations Act of 2008 (Public Law 110-252), the Unemployment Compensation Extension Act of 2008 (Public Law 110-449), and the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), and that the state receives maximum reimbursement from the federal government for the payment of those emergency benefits.
Notwithstanding the provisions of subdivision (c), with respect to weeks of unemployment beginning on or after December 19, 2010, and continuing until the earlier of the date authorized by Section 502(b) of Public Law 111-312, or the week ending four weeks prior to the last week for which 100 percent federal sharing is authorized by Section 2005(a) of Public Law 111-5 for all claims, except for reimbursable entities described in Section 3306(c)(7) of the Internal Revenue Code, the following applies:
There is an “on” indicator for purposes of federal-state extended benefits for a week if one of the following applies:
The rate of insured unemployment under this part for the period consisting of that week and the 12 weeks immediately preceding the week equaled or exceeded 120 percent of the average of the rates for the corresponding 13-week period ending in each of the preceding three calendar years, and equaled or exceeded 5 percent.
The rate of insured unemployment under this part for the period consisting of that week and the 12 weeks immediately preceding the week equaled or exceeded 6 percent, regardless of the rate of insured unemployment in the three previous years.
The average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the period consisting of the most recent three months for which data for all states are published before the close of that week, equals or exceeds 6.5 percent and the average rate of total unemployment in this state, seasonally adjusted, as determined by the United States Secretary of Labor, for the three-month period equals or exceeds 110 percent of that average rate of total unemployment for any or all of the corresponding three-month periods ending in the three preceding calendar years.
There is an “off” indicator for a week if, for the period consisting of that week, and the 12 weeks immediately preceding the week, none of the criteria specified in paragraph (1) results in an “on” indicator.
The indicators specified in paragraphs (1) and (2) shall be operative only if mandated or permitted by federal law.
The department shall establish, for each eligible individual who files an application therefor, an extended compensation account with respect to the individual’s benefit year. The amount established in that account, subject to subdivision (b) of this section, shall be not less than whichever of the following is the least:
Fifty percent of the total amount of regular compensation payable to the individual during that benefit year under this division.
Thirteen times the individual’s average weekly benefit amount.
Thirty-nine times the individual’s average weekly benefit amount, reduced by the regular compensation paid to them during that benefit year under this division.
The amount determined under subdivision (a) of this section shall be reduced by the aggregate amount of additional compensation paid to the individual under Part 3 (commencing with Section 3501) of this division for prior weeks of unemployment in a benefit year that did not begin in an extended benefit period.
For purposes of subdivision (a) of this section, an individual’s weekly benefit amount for a week is the amount of regular compensation under Part 1 (commencing with Section 100) of this division payable to such individual for such week of total unemployment.
With respect to weeks beginning in a high unemployment period, subdivision (a) shall be applied in accordance with the following percentages:
In paragraph (1) of subdivision (a), 80 percent shall be substituted for 50 percent.
In paragraph (2) of subdivision (a), 20 times shall be substituted for 13 times.
In paragraph (3) of subdivision (a), 46 times shall be substituted for 39 times.
For purposes of subdivision (d), “high unemployment period” means either of the following:
A period during which an extended benefit period would be in effect if subparagraph (A) of paragraph (3) of subdivision (c) of Section 4003 were applied by substituting 8 percent for 6.5 percent.
A period during which an extended benefit period would be in effect if subparagraph (A) of paragraph (4) of subdivision (c) of Section 4003 were applied by substituting 8 percent for 6.5 percent.
If subdivision (h) of Section 4003 is applicable, for purposes of subdivision (d), “high unemployment period” means a period during which an extended benefit period would be in effect if subparagraph (C) of paragraph (1) of subdivision (h) of Section 4003 was applied by substituting 8 percent for 6.5 percent.
CHAPTER 2. Federal-State Extended Benefits [4551. - 4751.]
ARTICLE 1. Eligibility and Disqualifications [4551. - 4558.]
Federal-state extended benefits are payable from the Unemployment Fund to unemployed individuals who are eligible under this part.
An unemployed individual is eligible to receive federal-state extended benefits with respect to any week only if the director finds that:
An extended compensation claim has been established for him or her.
The week is within an extended benefit period and his or her eligibility period.
He or she is not subject to disqualification for normal benefits under any provision of Part 1 (commencing with Section 100). If the individual has been subject to disqualification under subdivision (b) of Section 1257, he or she has satisfied subdivision (b) of Section 1260 and, during a week following the first week of disqualification, has done either of the following:
Performed service in bona fide employment during a week on a full-time basis.
Performed service in bona fide employment during a week from which service he or she earned remuneration at least equal to his or her weekly benefit amount.
With respect to compensation payable to any individual for any week, he or she had earnings from employment subject to the provisions of this division which exceed 40 times his or her most recent weekly benefit amount or 1.5 times the highest quarter, in the base period in which he or she exhausted all rights to regular compensation.
The amendments to subdivision (e) made by the act adding this subdivision shall not be implemented unless the director determines that those amendments have been approved by the United States Department of Labor. The director shall immediately seek approval of the amendments to subdivision (e) from the United States Department of Labor.
An unemployed individual is disqualified for federal-state extended benefits if the individual, without good cause, refused to accept suitable work when offered to the individual, or failed to apply for suitable work when referred by a public employment office.
For purposes of this section, the term “suitable work” means any work which is within the individual’s capabilities.
An individual shall not be disqualified under this section if any of the following apply:
The gross average weekly remuneration payable to the individual for the position offered or to which referred, does not exceed the individual’s weekly benefit amount plus the amount of any additional benefits (as defined in Section 501(c)(17)(D) of the Internal Revenue Code of 1954) payable to such individual for such week.
The position was not offered to such individual in writing and was not listed with a public employment office.
The position pays less than the federal or state minimum wage, whichever is higher.
The department determines that the individual’s prospects for obtaining work in his or her customary occupation within a reasonably short period are good.
If the department makes a determination described in paragraph (5) of subdivision (b), the determination of whether any work is “suitable work” and whether there is a disqualification from benefits with respect to the individual shall be made in accordance with subdivision (b) of Section 1257, Sections 1258, 1258.5, and 1259, and subdivision (b) of Section 1260.
An individual is disqualified for federal-state extended benefits if the individual fails to actively engage in seeking work.
For purposes of this section, an individual shall be treated as actively engaged in seeking work during any week if both of the following conditions are met:
The individual has engaged in a systematic and sustained effort to obtain work during the week.
The individual provides tangible evidence to the department that he or she has engaged in such an effort during the week.
An individual shall not be disqualified under this section for any week in which the individual is in a training or retraining program under Article 1.5 (commencing with Section 1266) of Chapter 5 of Part 1.
An individual shall not be disqualified under this section for any week solely because the individual is before any court of the United States or any state pursuant to a lawfully issued summons to appear for jury duty, or the individual is hospitalized for treatment of an emergency or life-threatening condition.
Beginning with the week in which the disqualifying act occurs, and
Continuing until the individual has, during at least four weeks subsequent to the week in which the disqualifying act occurred, performed services in bona fide employment for which remuneration is earned equal to or in excess of four times the individual’s weekly benefit amount.
Except as provided in subdivision (b), payment of federal-state extended compensation shall not be made to any individual for any week if both of the following apply:
Extended compensation would, but for this section, have been payable for such week pursuant to an interstate claim filed in any state under the interstate benefit payment plan.
An extended benefit period is not in effect for such week in such state.
Subdivision (a) shall not apply with respect to the first two weeks for which extended compensation is payable as determined without regard to this section, pursuant to an interstate claim filed under the interstate benefit payment plan to the individual from the extended compensation account established with respect to the benefit year.
Sections 4553 to 4557, inclusive, and the amendments made to Section 4552 by legislation enacted during the 1981 portion of the 1981–82 Regular Session of the Legislature shall be operative only during such time as Section 202 of the Federal-State Extended Unemployment Compensation Act of 1970 requires that state unemployment insurance laws contain such provisions as a condition of certification of state unemployment insurance laws by the Secretary of Labor.
ARTICLE 2. Computation (Amount and Duration) [4601. - 4601.]
The computation of the amount and duration of federal-state extended benefits shall be in accordance with Section 4004.
ARTICLE 3. Filing, Determination, and Payment of Federal-State Extended Benefit Claims [4651. - 4656.]
Claims for federal-state extended benefits shall be made as provided in this article.
An individual who desires to claim federal-state extended benefits shall file a valid application. An application for federal-state extended benefits shall be valid only if its effective date is within an extended benefit period and his eligibility period and the individual filing it otherwise meets the requirements of Section 4001. For the purpose of determining whether an application is a “valid application” within the meaning of this section, an individual otherwise unemployed shall be deemed unemployed even though wages, as defined in Section 1252, which are for a period subsequent to the termination of performance of services are payable with respect to the week for which he files the application.
The effective date of a valid application shall be determined in the same manner as the effective date of a new claim for normal benefits pursuant to Section 1326.
The department shall give a notice of the filing of an application or an additional claim to the employing unit by which the individual was last employed immediately preceding the filing of the application or claim unless the additional claim is the result of the filing of a partial claim as defined by the department, there has not been a subsequent employing unit which is designated as the last employer, and there is no separation issue. The employing unit so notified shall submit within 10 days after the mailing of the notice any facts then known which may affect the individual’s eligibility for federal-state extended benefits. The 10-day period may be extended for good cause. If after the 10-day period the employing unit acquires knowledge of facts which may affect the eligibility of the individual and those facts could not reasonably have been known within the period, the employing unit shall within 10 days of acquiring that knowledge submit those facts to the department, and the 10-day period may also be extended for good cause.
The Employment Development Department shall consider the facts submitted by an employer pursuant to Section 4654 and, if benefits are claimed subsequent to the filing of the federal-state extended benefits claim, make a determination as to the individual’s eligibility for the federal-state extended benefits. The Employment Development Department shall promptly notify the individual and any employer who prior to the determination has submitted any facts pursuant to Section 4654 of the determination and the reasons therefor. The individual and this employer may appeal therefrom to an administrative law judge within 30 days from service of notice of the determination. The 30-day period may be extended for good cause. The Director of Employment Development shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
Upon the filing of a valid application by an individual, the department shall promptly make a federal-state extended benefit award computation that shall set forth the maximum amount of federal-state extended benefits potentially payable during the extended benefit period, and the weekly benefit amount. The department shall promptly notify the individual of the computation. The individual may, within 30 days after the service of the notice of computation or recomputation, protest its accuracy. The 30-day period may be extended for good cause. The department shall consider this protest and shall promptly notify the individual of the recomputation or denial of recomputation. An appeal may be taken from a notice of denial of recomputation in the manner provided in Section 4655. The director shall be an interested party to any appeal.
“Good cause,” as used in this section, shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect.
This section shall become operative on July 1, 2015.
ARTICLE 4. Reserve Accounts [4701. - 4702.]
An employer that is entitled under Section 4654 to notice of the filing of an application or additional claim and who, within 10 days after mailing of the notice, submits to the department any facts within its possession disclosing whether the individual left the most recent employment with the employer voluntarily and without good cause or was discharged from the employment for misconduct connected with their work, or whether the claimant was a student employed on a temporary basis and whose employment began within, and ended with their leaving to return to school at the close of, their vacation period, or whether the claimant left the employer’s employ to accompany their spouse or domestic partner to a place or to join their spouse at a place from which it is impractical to commute to the employment, and to which a transfer of the claimant by the employer is not available, or whether the claimant’s discharge or quit from their most recent employer was the result of an irresistible compulsion to use or consume intoxicants, including alcoholic beverages, or whether the claimant left the employer’s employ to protect their family or themselves from domestic violence abuse, or whether the claimant left the employer’s employ to take a substantially better job, shall be entitled to a ruling as prescribed by this section. The period during which the employer may submit these facts may be extended by the director for good cause.
For purposes of this section, “spouse” includes a person to whom marriage is imminent, and “domestic partner” includes a person to whom a domestic partnership, as described in Section 297 of the Family Code, is imminent.
The department shall consider the facts together with any information in its possession. If the employer is entitled to a determination pursuant to Section 4655, the department shall promptly issue to the employer its ruling as to the cause of the termination of the individual’s most recent employment. The employer may appeal from a ruling or reconsidered ruling to an administrative law judge within 30 days after service of notice of the ruling or reconsidered ruling. The 30-day period may be extended for good cause, which shall include, but not be limited to, mistake, inadvertence, surprise, or excusable neglect. The director shall be an interested party to an appeal. The department may for good cause reconsider a ruling or reconsidered ruling within either five days after the date an appeal to an administrative law judge is filed or, if no appeal is filed, within 30 days after service of notice of the ruling or reconsidered ruling, except that a ruling or reconsidered ruling that relates to a determination that is reconsidered pursuant to subdivision (a) of Section 1332 may also be reconsidered by the department within the time provided for reconsideration of that determination.
For purposes of this section only, if the claimant voluntarily leaves the employer’s employ without notification to the employer of the reasons therefor, and if the employer submits all of the facts within its possession concerning the leaving within the applicable time period referred to in this section, the leaving shall be presumed to be without good cause.
An individual whose employment is terminated under the compulsory retirement provisions of a collective bargaining agreement to which the employer is a party shall not be deemed to have voluntarily left their employment without good cause.
Rulings under this section shall have the effect prescribed by Section 1032.
This section shall become operative on July 1, 2015.
Federal-state extended benefits, to the extent that these extended benefits are not reimbursed or reimbursable by the federal government to the State of California, shall be charged except as provided by Section 1032, 1032.5, 1034, 1036, 1335, 1338, or 1380, against the reserve account of the individual’s employer during his or her base period. If the individual performed services in employment for more than one employer during his or her base period, unemployment compensation benefits paid to him or her shall be charged against the respective reserve accounts of such employers in the proportion that the total wages paid to the individual in employment for each employer bears to the total wages paid to the individual in employment for all employers during the base period.
ARTICLE 5. Overpayments [4751. - 4751.]
The provisions of Article 4 (commencing with Section 1375) of Chapter 5 of Part 1 of this division are modified in the following respects:
In the absence of fraud, misrepresentation, or willful nondisclosure, the notice of overpayment of federal-state extended benefits shall be served by the Employment Development Department not later than one year after the close of the extended benefit period in which the overpayment was made.
The Director of Employment Development may offset an overpayment of extended duration benefits, or federal-state extended benefits, or unemployment compensation benefits against any of such three types of benefits or against disability benefits to which the liable person may become entitled under this division. The Director of Employment Development may offset the amount of any such overpayments within any of the periods prescribed by subdivision (b) of Section 1379, and further within the current extended duration period or current extended benefit period or any extended benefit period or extended duration period which begins during the three-year period next succeeding the date of the service of such notice of overpayment.
DIVISION 1.5. AUTOMATION OF THE EMPLOYMENT DEVELOPMENT DEPARTMENT [4900. - 4903.]
CHAPTER 1. Annual Reports [4900. - 4903.]
As used in this division:
“Department” means the Employment Development Department.
“Director” means the Director of Employment Development.
The director shall prepare a biennial report to the Legislature, on or before February 1, 1994, and on or before February 1 of each even-numbered year thereafter, on the department’s automation plans, including any recommendation on improvements for the purpose of consideration by both policy and fiscal committees of the Legislature.
The report, required by Section 4901, shall be transmitted to the Legislative Analyst, the Assembly Committees on Insurance, Labor and Employment, and Budget, the Senate Committees on Industrial Relations and Budget and Fiscal Review, the Department of Finance, and the Governor, on or before February 1 of each even-numbered year. The report shall do all of the following:
Provide a strategic information technology plan that describes the long-term goals and strategies which shall be undertaken by the department to create an information technology environment that will not only support the achievement of the department’s strategic business mission and goals but set the foundation for using information technology to make substantial and sustainable improvements in how it conducts business. The plan shall cover a 10-year planning horizon and include the department’s information vision, its information management principles, and long-term goals and strategies for achieving its information vision.
Provide a tactical information plan of specific automation and infrastructure projects to be undertaken within three years of the date of the report. The plan shall include project description and scope, consistency with the strategic information plan, relationship to other projects, priority of development, estimated project costs and benefits, and improvements in services. For automation projects, it shall also provide reductions in personnel and operating costs, and identification of how personnel and cost savings will be used, transferred, or otherwise accounted for.
Not necessarily be in addition to or replace any reports now submitted by the director to the California Department of Technology.
Thirty days prior to the release of the report identified in Section 4901, the director shall submit it to the California Department of Technology, which shall review and comment on it. These comments shall be attached to the report by the director and distributed with the report.
When commenting on the report, the California Department of Technology shall include, but not be limited to, an assessment of whether:
The requirements for the report have been met.
The strategic plan is consistent with the formal strategic plan submitted separately to the California Department of Technology.
The costs and benefits identified in the report are consistent with the projects previously submitted for approval or contained in the Information Management Annual Plans.
DIVISION 3. EMPLOYMENT SERVICES PROGRAMS [9000. - 11024.]
PART 1. EMPLOYMENT AND EMPLOYABILITY SERVICES [9000. - 11024.]
CHAPTER 1. General Provisions and Definitions [9000. - 9115.]
ARTICLE 1. General Provisions [9000. - 9004.]
The Legislature hereby makes the following declaration of purpose and intent in enacting the Employment Development Act of 1973.
It is the public policy of the State of California to provide for comprehensive statewide and local manpower planning, to improve the efficiency of, and the accountability for, delivery systems for manpower programs, to promptly place job-ready individuals in suitable jobs, to provide qualified job applicants to employers, to assist potentially employable individuals to become job ready, and to create employment opportunities.
In enacting the Employment Development Act of 1973, the Legislature further finds and declares that it is essential to the health and welfare of the people of this state that action be taken by local, state and federal governments to effectively and economically utilize public funds for job training and placement services. To achieve this, it is necessary that:
Explicit priorities be established for the allocation of these funds to ensure that they are first used to assist those in greatest need for job training and placement services;
Definitive goals be established for the total system of job training and placement services to maximize the effectiveness of the system in assisting individuals to find and maintain gainful, competitive employment;
Efforts be made to enlist the full support of private industry in securing jobs for enrollees of training programs, and a closer, more integrated and coordinated effort be established with the federal government as well as state and local public and private agencies involved in performing job training and placement services; and
New approaches involving improved services and changes in traditional organization structures be used to assist persons in economically disadvantaged areas.
It is hereby declared to be the intent of the Legislature to concentrate and account for the funds available for job training and placement services in one state agency whose functions shall be subject to periodic review by the Legislature and appropriate federal agencies, and to which is assigned the responsibility for the efficient administration of job training and placement services in this state and the allocation of these funds to the end that such funds will be more effectively utilized and will be directed primarily to those areas of the state with the largest concentrations of chronically unemployed persons.
It is the further intent of the Legislature (a) to maintain policy control over all job training and placement programs administered by the department pursuant to this part to the maximum extent feasible, consistent with effective program operations, (b) to organize existing job training and placement programs now operating in the state into a coordinated system designed to remove employable persons from dependency on public assistance, and to enlist the full support of private industry in securing jobs, (c) to use funds for job training and placement services in a flexible manner to provide needed services for individuals through contractual arrangements with public and private agencies, (d) to provide a unified system for timely delivery of improved job training placement and related services to eligible persons including individual case responsibility, an outreach effort to seek out those persons who need but do not apply for services, followup to insure that the needs of eligible persons and their families are met, dissemination of information and knowledge to residents of the economically disadvantaged area about available services, and location of services in areas readily accessible to those who need them, and (e) to involve members of each community in identifying the needs to be met and relating them to the services available in order to reduce the isolation of the disadvantaged from their government and the community as a whole and to improve their confidence in government at all levels.
Subject to the provisions of Sections 9600 and 9605, the Secretary of the Health and Welfare Agency shall coordinate all job training placement, and related programs, conducted by state agencies, with the federal government and ensure that there is no duplication of the programs among state agencies and that all agreements, contracts, plans, or programs conform to the provisions of this part. Any plan proposed to be submitted by any agency to the federal government in relation to a job training, placement, or related program, shall first be submitted to the Secretary of the Health and Welfare Agency for his or her review. The Health and Welfare Agency may require state departments to contract with it for services to carry out the provisions of this part.
Notwithstanding any other provisions of this code, individuals with disabilities who are clients of the Department of Rehabilitation shall not be barred as participants in manpower programs, including, but not limited to, retraining programs, work incentive programs, job training and placement programs, career opportunity development programs, and vocational educational programs, because of their mental or physical disability when certified by the Department of Rehabilitation as being potentially employable.
Upon receipt of a formal ruling from the United States Secretary of Labor, the United States Secretary of Health and Human Services, or the head of any federal agency that any provision of Chapter 1206 of the Statutes of 1973 or Chapter 1212 of the Statutes of 1973 cannot be given effect without causing the state’s plan to be out of conformity with federal requirements or would result in decertification of provisions of this code and notification of intention to withdraw federal funds from the state, that provision shall become inoperative to the extent that it is not in conformity with federal requirements.
ARTICLE 2. Definitions [9100. - 9115.]
Unless the context otherwise requires, the definitions in this article govern the construction of this division.
“Department” means the Employment Development Department, which may also be referred to as the Department of Employment Development.
“Director” means the Director of Employment Development.
“State agency” means those agencies enumerated in Section 11000 of the Government Code.
“Job training and placement services” or “job training and placement programs” means any job training, placement, or related services administered or supervised by or provided under contract with the department, directly calculated to increase employability or improve the employment of the individual.
“Unemployed person” means a person who lacks a bona fide employment, suffers economic deprivation because of lack of employment, and is employable or capable of being made employable through the services available under this part.
“Underemployed person” means a person who has a bona fide employment but whose employment, be it full time, or part time, or intermittent, is insufficient to provide an income adequate to avoid economic deprivation.
“Economic deprivation” means annual income insufficient to enable the family or individual to meet a table of income criteria adopted by the director, which takes appropriate factors into account, including, but not limited to, the level indicated by multiplying by 3 the cost of the Low Cost Food Plan of the United States Department of Agriculture for the Western Region of the United States.
“Economically disadvantaged area” means an area which meets all of the following requirements:
It is composed of contiguous census tracts within or partly within an urbanized area as defined by the most recent federal census for which statistics are available.
In the area 20 percent of the families report annual income less than four thousand dollars ($4,000) according to the most recent federal census for which statistics are available.
The area has a population of not less than 25,000.
“Economically disadvantaged area” also includes any portion of an area if:
Such portion is within or partly within an urbanized area but because of technical factors such portion cannot be isolated as a census tract or tracts or cannot be isolated as a “contiguous” census tract; and
The total area when such portion is included meets the requirements of paragraphs (2) and (3) of subdivision (a) of this section.
The director shall periodically review the definition set forth in this section and Section 9110, and he shall recommend necessary changes to the Legislature and the Governor.
“Eligible person” means an unemployed person or underemployed person who resides in an economically disadvantaged area or resides outside of an economically disadvantaged area but who resides in a county in which an economically disadvantaged area exists and qualifies under criteria established by the director.
“Economically displaced persons” means those persons who have been subjected to an involuntary layoff or separation from their employment, and who have not quit voluntarily or been dismissed for disciplinary reasons.
CHAPTER 2. Employment Development Department [9500. - 9925.]
ARTICLE 1. Administration [9500. - 9502.]
The department shall administer all job training and placement programs and services for eligible persons as defined in this division, except as otherwise provided by federal statute or regulation.
For purposes of administration, the director may establish such offices as are appropriate for the administration of this part. Offices administering programs under this part shall be established to the fullest extent possible in economically disadvantaged areas.
ARTICLE 2. Powers and Duties [9600. - 9619.]
The department shall represent the state and local governments upon their request in dealing with the federal government regarding the kinds and quality of job training and placement, employability, and related programs contained in the statewide plan described in subdivision (b), which are administered by or in the State of California pursuant to this division.
The department shall develop a statewide plan and area plans to coordinate all programs it administers pursuant to this division and shall present such plans annually to the Legislature. Such plans shall include, but not be limited to, the review required in Section 9604.
The department shall have the authority to administer the requirements of the federal Workforce Innovation and Opportunity Act including, but not limited to, establishing accounting, monitoring, auditing, and reporting procedures and criteria in order to ensure state compliance with the objectives and requirements of the federal Workforce Innovation and Opportunity Act.
The department shall adopt, amend, or repeal any rules and regulations as necessary to implement Division 7 (commencing with Section 14000).
The department may enter into any contractual agreements with public agencies, community action agencies, private organizations and individuals which are necessary to carry out the purposes of this part. Priority in contracts for services to carry out the provisions of this part shall be given to community action agencies, if the director determines that the agency can effectively provide such services.
The director shall designate economically disadvantaged areas. These areas shall be priority areas for services provided under this part. To the fullest extent possible, offices shall be established within the boundaries of the disadvantaged areas designated by the director.
To the extent permitted by law, the department shall serve eligible persons in such a way as to prevent discrimination by serving persons whose minority group characteristics coincide to the fullest extent possible with the minority group characteristics of the unemployed and underemployed in the economically disadvantaged areas of their community.
A minority shall be interpreted to include women to assure equality of opportunity in employment in accordance with Executive Order 11478 under the Federal Affirmative Action Program.
The department shall to the extent permitted by law provide services under this part in accordance with the following priorities:
Unemployed heads of households.
Underemployed heads of households.
Other unemployed and underemployed persons.
Veterans shall be accorded priority pursuant to federal law.
For purposes of this division, women as a class shall be deemed to constitute a minority group.
The department shall establish, in conjunction with the Department of Social Services, the Department of Industrial Relations, the Department of Education, and the Chancellor’s office of the California Community Colleges, a systemwide policy of actively promoting the training of women in nontraditional occupations. For purposes of this section, “nontraditional occupations” means any job classification in which not more than 25 percent of the employees are women, according to the statistics of the United States Department of Labor.
This section is not intended, and shall not be construed, to require any local agency to make any expenditures to further the policy set forth in this section.
The department shall establish necessary data systems which shall provide administrative information on persons served including, but not limited to, the following information:
Pertinent data on the characteristics of persons served.
The services provided.
The results of services provided.
The department shall also compile annually a report for the state and its principal labor market areas. The report shall contain information on the characteristics of the unemployed and analyses of current trends and projections for population, labor force, employment, and unemployment and shall be provided on a regular basis to cooperative area manpower systems councils or successors.
The department shall:
Conduct the state manpower program, with the exception of manpower programs conducted by units of local general purpose government.
Be the sole state agency to approve and coordinate publicly funded job training and placement programs, which it administers. The department shall approve programs only if consistent with the plans developed under Section 9600 and other provisions of this division.
Be responsible for developing program objectives for each category of the service program it administers, establishing cost-effective results measurement, and providing accountability for results as related to the objectives set.
Appoint an advisory committee of representatives of employers and employer organizations to enlist the advice and support of private industry in developing a statewide system for making jobs available to job trainees following successful completion of job training and placement programs.
Develop controls to insure that job training and placement programs, it administers meet existing labor market needs as viewed by employers. The department shall study training and personnel selection methods used successfully by private industry.
Encourage placement of eligible persons in public employment with the assistance of an advisory group representing state and local officials and representatives of economically disadvantaged areas appointed by the department.
Evaluate the need for specific new public employment opportunities.
Determine the kinds and quality of job training and placement programs, it administers necessary to provide placement in public employment for eligible persons and develop means to realign job tasks to develop greater employment opportunities for eligible persons.
Cooperate with the State Personnel Board and local personnel officials in developing and upgrading employment opportunities for and in eliminating unnecessary barriers to the placement of eligible persons in public employment.
The State Personnel Board and other state and local agencies shall cooperate to the maximum extent feasible to achieve the purposes of this division.
The state manpower program shall serve the needs of employers by providing them with referrals of qualified job applicants. In addition the manpower program shall assist those individuals who are ready for employment, those who are employable with some direct assistance, and those individuals who are potentially employable.
In the administration of the state manpower program, the director shall establish community employment development centers. Within his administrative discretion, he shall determine the number, location and management structure for community employment development centers based on identified community needs. Each center shall be responsible for identifying and meeting manpower needs within the community and for maintaining current community labor market information. This labor market information shall be the basis for more realistic direction to manpower and vocational training efforts.
The director shall, within each community employment development center, establish an intake system to appraise the individual needs of applicants. Each community employment development center shall provide the following services:
Job referral and labor market information services to applicants who are occupationally competitive and qualified by training or experience in the labor market. These applicants shall be encouraged to utilize self-help services.
Employment exploration and job development services to applicants who are employable but need some directed assistance in planning an effective job search or coping with minor barriers to employment. Employment exploration and job development services are designed as follows:
To prepare groups of applicants to use job referral and information services by instructing them in job finding techniques and how to initiate their own job search.
To assist applicants directly by developing job opportunities.
To provide, as necessary, usually on a one-time basis, the following services:
Contacting an employer to explain an applicant’s qualifications or limitations, such as a disability not affecting ability to work, in relation to requirements for a particular job and arranging an interview.
A more thorough appraisal of the applicant’s capabilities and desires in relation to the job market than is required of an applicant seeking only job referral and labor market information.
To arrange for short-term supplemental services.
Individual employability development and placement services to applicants who are potentially employable but are in need of more intensive services before becoming employable because they have vocational barriers due to disability, lack of skills, obsolescence of job skills, limited education, or poor work habits and attitudes. Intensive employability services shall be provided by case-responsible persons to applicants where case-responsible persons are assigned.
Through case managers or case-responsible persons, case services to applicants to the extent funds are available. Case services funds may be made available for services to the disadvantaged. “Case services” means an applicant’s expenses necessary for or incident to training or employability development and includes, but is not limited to, the following:
Books and supplies.
Tools and safety equipment.
Union fees.
Business license fees.
The department shall administer manpower service funds and shall provide, in a balanced and flexible manner, needed services as provided in this part.
The director may enter into contracts for public and private job training and placement programs as may be required, and shall maintain quarterly projections of manpower needs in the public and private sector in each area.
The employees of the department shall be subject to the State Civil Service Act, except for exempt appointees. Members of the California Commission on Aging shall continue to be appointed by the Governor.
The director shall make every effort to secure to the fullest extent possible federal funds available for participation under this part and shall provide that effective and comprehensive placement and manpower information services are made available to eligible persons, both youth and adults, who are served by the department, using funds available to the department under Title III and Title IX of the Social Security Act, in accordance with a plan of service developed by the department and approved by the United States Department of Labor as required by federal law and regulations.
Under a plan of service developed by the department, funds under Title III and Title IX used for the administration of employment service offices and funds under the Manpower Development and Training Act shall be used to administer programs designed to find employment for economically displaced personnel toward the end of meeting the following goals:
Developing a broad inventory of skills of displaced workers.
Establishing labor market information systems necessary to identify the need for skills in waste disposal, power, water reclamation, sea water conversion, communications, biomedical techniques, air pollution control, and transportation systems.
Eligible persons who are registrants pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code shall receive priority for services. The department shall use up to 50 percent of the funds available to it pursuant to Section 7(b) of the federal Wagner-Peyser Act (29 U.S.C. Sec. 49f) to provide for job services required pursuant to subdivision (c) of Section 11320.3 of the Welfare and Institutions Code.
The department, in coordination with the United States Department of Defense and the various branches of the military of the United States, shall determine which military occupational specialties have civilian counterpart jobs that require licensure by state or local agencies.
The department shall further determine, to the degree possible, if any procedural, financial, technological, educational, or bureaucratic barriers exist that impede military personnel reentering the civilian workforce from acquiring these licenses.
The department shall implement this section only to the extent federal funds are available for the costs of implementation.
The department shall convene groups that represent local department field offices, county welfare departments, local workforce investment areas, and community colleges for the purpose of developing a local plan on how these entities will regularly coordinate employer outreach activities and the solicitation of entry-level and other job listings, in order to reduce duplication of effort and to enhance the overall job development activities. Each local plan shall be signed by the local entities convened pursuant to this subdivision and submitted to the department.
The entities involved in formulating each local plan and the department shall review each plan on at least an annual basis.
To the extent that funds are provided in the Budget Act of 2000 for the purposes of providing competitive grants to faith-based organizations that are not owned or operated as pervasively sectarian organizations, those organizations receiving funding shall demonstrate that they are able to meet the following six criteria in the provision of services:
Establishing linkages with local workforce development service delivery systems.
Leveraging resources through collaboration and partnerships.
Establishing intermediate and long-term outcome goals, with measurable indicators.
Collecting and maintaining data that can be used for management decisionmaking.
Using data to assess progress and evaluate effectiveness.
Sharing information with stakeholders.
The department shall provide technical assistance to organizations as needed to enable them to meet the six criteria specified in paragraphs (1) to (6), inclusive, of subdivision (a).
The department shall collect and analyze the following information as it relates to the organizations funded under this section:
The number of participants who experienced job placements, wage gains, increased job retention, increased educational achievement, and reduced use of public assistance programs.
The cost per participant.
Organizations’ effectiveness in serving populations with barriers to employment who are missed by traditional service providers.
The department’s success in transitioning the organizations to longer-term funding sources.
The department shall provide an interim report with regard to the competitive grants provided under this section to the Legislature on or before May 15, 2001, and shall provide a final report to the Legislature on or before September 1, 2001.
The department shall administer a solar training program. The department shall coordinate with the Division of Apprenticeship Standards and the State Contractors’ License Board to ensure solar energy product and service providers in California possess and maintain the necessary skills, training, and certification.
Elements of the training program shall include, but need not be limited to, all of the following:
The science of photovoltaics and small scale solar thermal technologies.
The design of solar systems.
The installation of solar systems.
Permitting of solar systems.
Safety.
System and component certification.
State and federal incentive programs.
To the extent that funds are appropriated for this purpose in the annual Budget Act, the department may award grants to regional collaboratives for the creation of regional nursing simulation laboratories that will allow additional nursing students to have access to clinical educational facilities. No single grant made under this section may exceed two hundred and fifty thousand dollars ($250,000).
During the 2005–06 fiscal year, all grants made under this section shall be made for the creation of regional nursing simulation laboratories that serve rural areas.
The department shall administer grants made under this section, and shall establish procedures and criteria for the awarding of those grants.
ARTICLE 3. San Diego Multiuse Biotechnology Training Center [9700. - 9702.]
For purposes of this article, “center” means the San Diego Multiuse Biotechnology Training Center.
The Legislature finds and declares the following:
Biotechnology represents one of the most promising, innovation-based growth industries of this era. California is the nation’s leading state in biotechnology innovation and production.
The San Diego region, as the world’s third largest biotechnology industry cluster, is host to world-class generators of science and technology in biotechnology and the related life sciences.
Despite the specialized nature of emerging biotechnology firms, their recent growth has been extensive, and with that growth has come an ever-increasing demand for trained biotechnology workers at all levels. The industry’s workforce has grown at an annual rate of about 15 percent over the past five years, and California’s biotechnology workforce could easily grow to over 250,000 by the year 2015 from its current level of 100,000.
Biotechnology employers need entry-level and advanced professionals that have a background in, and familiarity with, industrylike conditions for basic, applied, and translational research, development, and production. Based on recent studies, there is a clear and strong demand for applied bioscience training, but that demand is currently not being met by the region’s universities and colleges.
Companies nationally have overwhelmingly endorsed an “industry-focused” approach of providing internship training programs directly with the companies, combined with “company-like” training activities.
Many firms have identified the difficulty in finding entry level biotechnology workers at both the graduate and undergraduate levels as being directly related to the students’ lack of applied industry training or exposure. Many firms have had to extensively train new employees to teach them how to function in a biotechnology business environment. Additionally, nearly three-fourths of firms surveyed in San Diego and nationally have indicated that they would benefit from being able to hire workers that have been prepared to enter the workforce through advanced biotechnology internships and training of a “specific” nature.
San Diego and the surrounding area is served by many well-recognized academic institutions, from community colleges to universities offering doctorate programs, that supply educated workers to the biotechnology industry. At each academic level (AA, BS/BA, MS/MA, Ph.D.) curricula are in place, but most of the curricula are only marginally related to biotechnology workforce preparation in the applied sector. Applied education in the form of internships or instruction in practical science skills that would smooth the transition from academic institutions to the commercial biotechnology environment is even less prevalent than the biotechnology curricula offered at many schools, and is only now just emerging.
Many of California’s firms have found that many students graduate from four-year university programs with adequate conceptual understanding of biotechnology, but with relatively little practical laboratory experience, especially in the skills and protocols that are specific to commercial ventures as opposed to academic research.
In 2001, the Legislature created the Pasadena Bioscience Center to address biotechnology workforce needs in the Los Angeles region. The Pasadena Bioscience Center provides applied workforce training and includes components for research and innovation, new business incubation, and bioinformatics. In cooperation with California State University, the City of Pasadena, Pasadena City College, the California Institute of Technology, Huntington Medical Research Institutes, and local biotechnology companies and organizations, the Pasadena Bioscience Center serves as a successful model of focused education and training, tailored to specific industry needs, and that may be utilized in other areas of the state.
The Legislature further finds and declares that to address workforce needs in biotechnology, a multiuse biotechnology training center is being created in San Diego to serve as an anchor and catalyst for the growth of biotechnology enterprises in San Diego. The center will operate as a nonprofit organization under Section 501(c)(3) of the Internal Revenue Code, and will serve as a catalyst for accelerating the growth and formation of new bioscience enterprises that will create value-added jobs and high economic multipliers in the San Diego region. For this purpose:
The center will provide state-of-the-art, industry-oriented bioscience training and act as a strong contributor to the growth and retention of bioscience companies in the region. As such, the center, as proposed, will help encourage biotechnology companies to remain in the region, thereby offsetting the pull of other, less expensive business environments that have been recruiting both startup and existing local area bioscience companies.
The center will utilize the organization, programs, and work of the Pasadena Bioscience Center as successful models in the development of the San Diego Multiuse Biotechnology Training Center and its programs.
The new center will serve as a world class biotechnology workforce training facility offering practical, hands-on learning experiences, including short-term workshops and courses, and more extended training that will involve putting together multidisciplinary, multilevel teams of researchers, technicians, production specialists, apprentices, and students to work in a businesslike environment.
The center will coordinate an extensive applied biotechnology internship program that will place students in local biotechnology companies for practical training and experience.
The center will have the most relevant and advanced training possible, including an emphasis in bioinformatics, that will ensure that the center attains a position at the forefront of this rapidly expanding, cross-application specialization within biotechnology.
The center will have facilities and a collection of instruments not generally available to the region’s secondary schools, colleges, or universities.
The center can serve as a capstone training site for regional institutions.
The center will address the needs of existing as well as future industry employees.
The center may appoint directors to a board of directors, and existing participants in the center may serve as the original board of directors. The center may appoint new directors, as necessary, in its discretion.
The center will work with private universities, companies, associations, and various public agencies through memoranda of understanding under Section 9702, for the purpose of coordinating services and receiving assistance and support.
The San Diego Community College District, California State University, University of California, Employment Development Department, Employment Training Panel, California Health and Human Services Agency, Labor and Workforce Development Agency, California Workforce Investment Board, and the San Diego Workforce Partnership may enter into memoranda of understanding with the center to utilize existing staff and resources to provide any of the following:
Funding, if moneys are appropriated.
Staff.
Program development.
Outreach.
Coordination.
Implementation.
Strategy.
Physical office, administration, and training space.
ARTICLE 4. California YouthBuild Program [9800. - 9809.5.]
The purposes of the California YouthBuild Program shall be all of the following:
To enable economically disadvantaged youth, especially youth who have not finished high school, to obtain the education, job skills training, personal counseling, leadership development skills training, job placement assistance, and long-term followup services necessary for them to achieve permanent economic self-sufficiency, while at the same time providing valuable community service that addresses urgent community needs, including the demand for affordable housing and the need for young role models and mentors for younger teenagers and children.
To provide communities with the opportunity to establish or rebuild neighborhood stability in economically depressed and low-income areas, as well as historic areas requiring restoration or preservation, while providing economically disadvantaged youth, and youth who have not finished high school, an opportunity for a meaningful participation in society.
To allow communities to expand the supply of affordable housing for homeless and other low-income individuals by utilizing the energies and talents of economically disadvantaged youth and young people who have not graduated from school.
To foster the development of leadership skills and a commitment to community development among youth.
The director, from funds appropriated for this purpose to the YouthBuild Program, may make grants to applicants for the purpose of carrying out programs as authorized by this article. For the purpose of administering and managing the grant-making process, the director may contract with a qualified nonprofit corporation designated by the United States Department of Labor to provide technical assistance to YouthBuild programs. All programs shall have strong youth and community involvement.
For purposes of this article, the following terms have the following meaning:
“YouthBuild Program” means the overall California YouthBuild Program, as coordinated by the director.
“Program” means an individual program funded by a grant made by the director to an applicant as part of the overall YouthBuild Program.
“Applicant” means an entity that applies for a program grant pursuant to Section 9807.
“Participant” means a person eligible to participate in a program pursuant to Section 9805.
Programs shall provide, at a minimum, all of the following services:
Acquisition, rehabilitation, acquisition and rehabilitation, or construction of housing and related facilities to be used for the purpose of providing home ownership for disadvantaged persons, residential housing for homeless individuals and very low income families, or transitional housing for persons who are homeless, ill, deinstitutionalized, or who have disabilities or special needs.
Rehabilitation or construction of community facilities owned by public agencies or nonprofit entities.
Integrated education and job training services and activities or an equally divided basis, with 50 percent of participants’ time spent in classroom-based instruction, counseling, and leadership development instruction, and 50 percent of participants’ time spent in experiential training on the construction site.
The education component described in paragraph (1) shall include basic skills instruction, secondary education services, and other activities designed to lead to the attainment of a high school diploma or its equivalent. The curriculum for this component shall include math, language arts, vocational education, life skills training, social studies related to the cultural and community history of the participants, leadership skills, and other topics at the discretion of the program. Bilingual services shall be available for individuals with limited-English proficiency. A program shall have a goal of a minimum teacher-to-participant ratio of one teacher for every 18 participants.
The job training component described in paragraph (1) shall involve work experience and skills training apprenticeships related to construction and rehabilitation activities described in subdivision (a). The process of construction shall be coupled with skills training and with close onsite supervision by experienced trainers. The curriculum for this component shall contain a set of locally agreed upon skills and competencies that are systematically taught, with participants’ mastery assessed individually on a regular, ongoing basis. Safety skills shall be taught at the outset. A program shall have a goal of a minimum trainer-to-participant ratio of one trainer for every seven participants. This component shall be coordinated to the maximum extent feasible with preapprenticeship and apprenticeship opportunities.
Assistance in attaining postsecondary education and in obtaining financial aid shall be made available to participants prior to graduation from the program.
Counseling services designed to assist participants in positively participating in society, including all of the following, as necessary: outreach, assessment, and orientation; individual and peer counseling; life skills training, drug and alcohol abuse education and prevention; and referral to appropriate drug rehabilitation, medical, mental health, legal, housing, and other community services and resources. A program shall have a goal of a minimum counselor-to-participant ratio of one counselor for every 28 participants.
Each participant shall be provided with a training subsidy, living allowance, or stipend of not less than eight dollars ($8) per hour for the time spent at the worksite in construction training. For those participants who receive public assistance, this training subsidy, living allowance, or stipend shall not affect housing benefits, medical benefits, child care benefits, or CalFresh benefits, to the extent consistent with federal law. The training subsidy, living allowance, or stipend may be distributed in a manner that offers incentives for good performance.
Full-time participation in a program shall be offered for a period of not less than 6 months and not more than 24 months.
A concentrated effort shall be made to find construction, construction-related, or nonconstruction jobs for all graduates of the program who have performed well. The job training curriculum shall provide participants with basic preparation for seeking and maintaining a job. Followup counseling and assistance in job seeking shall also be provided to participants for a period of 12 months following graduation from the program.
A program serving 20 or more participants is required to have a full-time director responsible for the coordination of the requirements of this article.
The department may accept proposals for funding from applicants who establish their eligibility for funding under this article by submitting proof that they have been funded or designated as a federal YouthBuild program by the United States Department of Labor.
Program grants may be used for the activities in Section 9802 and for any of the following activities:
Legal fees for housing acquisition.
Administrative and technical assistance costs of the program applicant that may not exceed 15 percent of the program grant, or another amount as is determined by the director to be necessary to support capacity development of a private nonprofit community-based organization. The applicant may contract with a technical assistance provider approved by the director.
Defraying costs for the ongoing training and technical assistance needs of the program applicant that are related to developing and carrying out the program.
Except as provided in subdivision (b), eligible participants in a program shall be youth between the ages of 17 and 24, inclusive, who are economically disadvantaged, as defined in Section 1503 of Title 29 of the United States Code, and who are in one of the following groups:
Persons who are not attending any school and who have not received a secondary school diploma or its equivalent.
Persons currently enrolled in a traditional or alternative school setting or a GED program and who are in danger of dropping out of school.
Very low income persons whose incomes are at or less than 50 percent of the area median income area, adjusted for family size, as estimated by the United States Department of Housing and Urban Development.
Not more than 25 percent of program participants may be individuals who do not meet the requirements of subdivision (a). These participants shall be persons who have educational needs despite the attainment of a high school diploma.
The director shall use the existing infrastructure of federally funded YouthBuild programs to the maximum extent possible. In the 1999–2000 fiscal year, the director shall give first priority in awarding grants under this article to applicants seeking to continue YouthBuild programs established with federal or other funding.
Entities eligible for grants under this article shall be nonprofit private entities and public agencies with experience in operating youth construction skills training, education, job placement, personal development, leadership development, and housing rehabilitation or construction programs.
An application for a grant under this article shall, at a minimum, contain all of the following:
The amount of the grant requested and the proposed use of the grant.
A description of the applicant and a statement of the applicant’s qualifications, including a description of the applicant’s past experience in running a YouthBuild program, if applicable, a description of the applicant’s past experience with housing rehabilitation or construction, youth and youth education, youth leadership development, and youth employment training programs, and a description of the applicant’s relationship with apprenticeship programs and with community-based organizations.
A description of the proposed construction site and evidence of site control, and a description of the proposed construction or rehabilitation activities to be undertaken and the anticipated schedule for carrying out those activities.
A description of the educational and job training activities, work opportunities, and other services that will be provided to participants.
A description of the manner in which eligible youths will be recruited and selected, including a description of the arrangements that will be made with community-based organizations, local education agencies and education agencies of Native American nations, public assistance agencies, courts of jurisdiction for status and youth offenders, shelters for homeless individuals and other agencies serving homeless youth, foster care agencies, and other appropriate public agencies and private entities.
A description of the special efforts that will be undertaken to recruit eligible young women as participants, including women with dependent children, including a description of how those women can receive appropriate support, including child care.
A description of how the proposed program will be coordinated with other federal, state, Native American nation, and local agency activities, including public school programs, the Americorps program, crime prevention programs, vocational, adult, and bilingual education programs, and other job training programs.
Substantive assurances that there will be a sufficient number of adequately trained supervisory personnel in the program who have attained the journey level or its equivalent.
A description of the applicant’s relationship with any local building trades union, including a description of the union’s involvement in training and the proposed relationship of the activities to be undertaken pursuant to the grant with established apprenticeship programs.
A description of activities that will be undertaken to develop the leadership skills of participants, including their role in decisionmaking.
A detailed budget and description of a system of fiscal controls and auditing and accountability procedures that will be used to ensure fiscal soundness.
A description of any contracts and arrangements entered into between the applicant and other entities, including all in-kind donations and grants from both public and private sources that will augment grant funds made available pursuant to this article.
Identification and description of the financing proposed for any acquisition of property, or the rehabilitation or construction of housing.
Identification and description of the entity that will operate and manage the property.
A certification that the applicant will comply with the requirements of applicable federal laws, including the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975, and that the applicant will work to further fair housing policies.
A description of the qualifications and past experience of the person who will be the full-time director for the applicant’s project to be funded pursuant to this article.
A description of the applicant pool profile, including, but not limited to, the number of participants currently on parole or probation, the number of participants with children requiring paid supervision, and the number of participants with Department of Motor Vehicles or court-sanctioned holds on their drivers’ licenses.
The term “YouthBuild” shall only be used in connection with a program funded pursuant to this article or by the United States Department of Labor, or if the program is an affiliate of YouthBuild U.S.A.
Each grant recipient, at the beginning of the grant cycle, shall report to the director, at a minimum, regarding the number of participants who have done any of the following:
Obtained a general education degree (GED).
Obtained full-time, unsubsidized employment in the building trades industry.
Obtained full-time, unsubsidized employment in other industries.
Obtained part-time, unsubsidized employment in the building trades industry or in other industries.
Gained acceptance into a trade apprenticeship program.
Successfully enrolled in a vocational or two-year community college.
Successfully enrolled in a state university, the University of California, or any other four-year college.
Each grant recipient shall report to the director on other participant outcomes as required by the Governor under Section 122(h) of the federal Workforce Investment Act of 1998.
ARTICLE 5. Jobs for California Graduates Program [9900. - 9908.]
It is the intent of the Legislature in enacting this article to support the expansion of the Jobs for California Graduates pilot project in Merced into a regional system of local programs based on the Jobs for America’s Graduates model. The Jobs for California Graduates nonprofit, public-private partnership will create a network of local programs to help California’s at-risk youth complete their secondary education and acquire the basic skills necessary to successfully transition into the workforce or enroll in postsecondary education.
The director of the Employment Development Department, from funds appropriated for this purpose to the Jobs for California Graduates Program, may make grants to applicants for the purpose of carrying out programs as authorized by this article. The grants shall be used to support new and existing Jobs for California Graduates Programs in the central valley region in one or more of the following counties: Sacramento, San Joaquin, Stanislaus, Merced, Fresno, Madera, and Kern. The director shall develop criteria for ranking grant applications, and performance standards and auditing procedures for evaluating the effectiveness of the grants. The director may contract with a qualified nonprofit corporation designated by the national organization, Jobs for America’s Graduates, to provide technical assistance to Jobs for California Graduates local programs.
The regional system of Jobs for California Graduates local programs shall be designed to accomplish all of the following goals:
To decrease absenteeism rates for at-risk youth.
To improve the performance of at-risk youth in school and in the workplace.
To improve secondary education completion rates.
To improve employability skills of at-risk youth.
To improve employment placement rates for at-risk youth.
To improve enrollment rates of at-risk youth in postsecondary education and training.
In order to encourage a regional system of long-lasting, self-sustaining model local programs, communities served pursuant to this article shall contribute in-kind and financial resources in direct support of the model local program, according to the following schedule:
During its initial year of implementation, a Jobs for California Graduates local program may receive state funds in an amount equal to 100 percent of the costs of implementing each Jobs for California Graduates Program site, but not to exceed sixty thousand dollars ($60,000).
During any year subsequent to the initial year of implementation, a model local program may receive state funds in the amount equal to 75 percent of the costs of implementing the model local program, but not to exceed forty-five thousand dollars ($45,000).
Community partners providing matching resources to the model local programs may include private nonprofit corporations, community-based organizations, workforce investment agencies, school districts, and other public and private sources.
Local affiliates of the Jobs for California Graduates Program shall include all of the following elements:
A trained youth specialist employed year-round providing individual and group instruction to 25 to 45 eligible youth recruited and selected by a school-based advisory committee comprised of faculty, administrators, and counselors.
The youth specialist shall provide individual attention to students to help them overcome barriers preventing them from receiving a high school diploma or securing employment, or both, or pursuing a postsecondary education that will lead to a career.
The youth specialist shall provide informal guidance to students on academic, career, and life decisions and, based on the individual needs of students, connect them to professional counseling services to address more serious barriers, such as mental health problems or drug abuse.
The youth specialist shall be actively involved in intensive, one-on-one employer marketing and job development activities to identify entry-level job opportunities for students upon graduation. Likewise, the youth specialist shall assist graduates in the exploration of postsecondary education opportunities and help them navigate the financial aid process to pursue these opportunities.
Youth shall be taught a minimum of 37 employment competencies designed to prepare them to secure a quality entry-level job or pursue a postsecondary education, or both, upon completion of their secondary education.
Placement services shall be provided to students during the summer months or partnerships developed with summer youth employment programs to support yearlong learning. Youth specialists shall maintain contact with youth during the summer months.
A student-led organization, associated with a state and national association, shall build on the competency-based curriculum and provide the opportunity for students to develop, practice, and refine their leadership and team membership skills.
It shall serve as a school-based “one-stop center” for participating at-risk youth to ensure that they receive appropriate academic and social services from available resources in the school and community.
It shall provide no less than 12 months of followup and support on the job and in postsecondary education after leaving the school.
It shall provide computerized tracking of youth served, services delivered and performance outcomes, such as graduation rate, positive outcome rates, aggregate employment rate, full-time jobs rate, full-time placement rate, further education rate, wages, and return to school rate, at local and state levels.
It shall provide continuous improvement of results through the ongoing professional development of managers, supervisors, and specialists.
Entities eligible to conduct a Jobs for California Graduates local program shall include, but need not be limited to, local education agencies, community colleges, and nonprofit organizations with an interest in serving at-risk youth.
To maintain eligibility after the initial year of implementation, participating entities shall conduct the Jobs for California Graduates Program in accordance with Jobs for America’s Graduates performance standards, receiving no less than a “Meets Standards” rating on an accreditation review.
To be eligible to receive services through a Jobs for California Graduates local program under this article, a youth shall meet at least two of the following criteria:
One or more years behind modal grade for one’s age group, with particular emphasis on those two or more years behind modal grade.
Below average academic grade point average relative to students in his or her class.
Above average number of absences during the past school year in comparison to other students in the school.
Placed on probation, suspended, or expelled from school one or more times during the past two years.
Pregnant or parenting teen.
Physically or mentally challenged.
Involved with substance abuse or criminal activities.
Member of an economically disadvantaged family.
Lives with only one or neither of his or her natural parents.
Receives little or no academic or social support from home or family.
Mother has not graduated from high school.
Closest friends have limited educational expectations. For example, they do not expect to graduate from high school or have already dropped out of high school.
For purposes of establishing and expanding these programs, the department shall, to the extent feasible, make local grants available throughout the region.
Notwithstanding subdivision (a), it is the intent of the Legislature that Jobs for California Graduates local programs be conducted in a broad range of settings, including urban, suburban, and rural districts, which are representative of all California youth during the initial year of the regional program, in order to test the effectiveness of the model local programs throughout the state.
State funds made available pursuant to this article shall be used to carry out both of the following:
The Jobs for California Graduates local program elements specified in Section 9902.
Regional management and technical assistance activities, including, but not limited to, all of the following:
Operation of an office, including the hiring of staff, that shall be responsible for managing and monitoring model local program compliance.
Conducting research and evaluation of all Jobs for California Graduates local programs, retaining a third-party provider as appropriate.
Making available regional training and development opportunities for consistent, effective implementation of the model local programs.
Conducting educational and outreach activities to engage private and public sector employers, secondary and postsecondary educational institutions, the military, state and local elected officials, community and social service organizations, and other interested parties.
Conducting regional activities for students, including, at a minimum, a leadership development conference and a career development conference.
Providing for the continuous improvement of model local program performance outcomes.
Developing and maintaining state and local partnerships with private and public employers, secondary and postsecondary educational institutions, and community and social services organizations.
Providing other support and oversight to promote the continuous improvement of Jobs for California Graduates local programs.
Directly operating local programs as appropriate.
ARTICLE 6. Employer Elder Care Benefits [9910. - 9912.]
The Legislature finds and declares all of the following:
The percentage of California employers offering pension and retirement plans to employees is substantially lower than the national average.
Many employers lack an understanding of the implications of our coming “age wave,” and how to best assist employees in preparing for the long-term care needs of themselves and their families.
It is the intent of the Legislature, in future years, to develop and to enact legislation to institute elder care and caregiving programs as an employee benefit, holding employers to the same standard in providing benefits and leave time for employees caring for elders as those provided employees caring for children.
The Legislature requests that the Senior Worker Advocate Office of the Employment Development Department work with the California Commission on Aging and other interested organizations including, but not limited to, AARP, in order to conduct outreach to the business community. The Legislature encourages other state entities, including, but not limited to, the California Department of Aging, to join in this effort.
The Legislature requests that this outreach effort be directed at educating employers about the implications of the impending “age wave,” and at providing employers with information on matters relevant to the aging population and on related employment implications.
State funds may not be appropriated for purposes of this article. The Employment Development Department is not required to undertake any new task pursuant to this article unless the department receives federal or private funds for the purposes of this article.
ARTICLE 7. Displaced Oil and Gas Worker Pilot Program [9920. - 9925.]
The Legislature finds and declares all of the following:
All efforts funded under this article are intended to supplement and be aligned with the broader workforce and education system in the State of California. This act is intended to focus on innovative approaches to, and proven practices for, addressing employment dislocations associated with oil, gas, and related industries.
The primary purpose of this act is to support workers on the front lines of the state’s transition to carbon neutrality and specifically workers in California’s oil, gas, and related industries, with the services they need to enter, participate in, and complete broader workforce preparation, training, and education programs aligned with regional labor market needs. Those who complete these programs should have the skills and competencies necessary to successfully enter the labor market and earn wages that lead to self-sufficiency, and eventually, economic mobility and security.
Populations eligible to be served by grants include, but are not limited to, workers on the front lines of the state’s transition to carbon neutrality and specifically workers in California’s oil and gas industry who are transitioning or dislocated.
There is hereby established the Displaced Oil and Gas Worker Pilot Program, to be administered by the department, for the purpose of addressing employment dislocations associated with oil, gas, and related industries.
For purposes of this article:
“Department” means the Employment Development Department.
“Program” means the Displaced Oil and Gas Worker Pilot Program.
“Qualified applicant” means a public or private nonprofit organization, local workforce development area, education and training provider, tribal organization, faith-based organization, or community-based organization. “Qualified applicant” does not include an individual applicant.
“Target population” means individuals who are transitioning or have been displaced from the oil, gas, and related industries.
The department shall award grants to qualified applicants on a competitive basis using funds to be appropriated by the Legislature for purposes of the program.
The department shall accept grant applications from qualified applicants. The grant application shall identify a lead applicant who shall be deemed the fiscal agent responsible for reporting and monitoring.
The department shall develop criteria for the selection of grant recipients that include, but are not limited to, all of the following:
Demonstrated experience working to ensure populations who have been dislocated from the labor market have access to quality jobs in their regions, with an emphasis on those transitioning or displaced from the oil, gas, and related industries.
Capacity to provide services to target populations and provide evidence of this capacity.
Experience in providing services, consistent with the objectives of the program, to the target population.
Support from partner entities includes, but is not limited to, local workforce development areas, education and training providers, tribal organizations, employers and faith-based organizations, business-based, labor-based organizations, including labor-management partnerships and labor-community partnerships, cultural-based organizations, and services-based organizations.
The specific purpose and goals of the grant award, the roles and responsibilities of the lead applicant and partner entities, a discussion of how funds will be used and success will be measured, the number of individuals who will be served, and the services to be provided to these individuals. Documentation shall be included to demonstrate that each partner entity has agreed to the activities in the grant proposal.
A description of how the grant proposal is designed to complement the work of, and integrate the individuals being served with, the broader workforce, education, and employment system within the proposed service area, and evidence that the proposal incorporates innovative strategies or proven practices for service delivery that will create pipelines to quality jobs, including temporary job creation, and income security for workers with an emphasis on career pathway programs aligned with regional labor market needs.
Funding awarded for training shall meet the requirements of high road as defined in subdivisions (r) and (s) of Section 14005.
Grant recipients shall be evaluated using the following criteria:
Ability to provide the services proposed in the grant to the number of individuals specified in the grant as evidenced by, among other things, whether the grantee has previously completed the same or similar services as proposed.
Ability of individuals to successfully complete relevant programming funded under the grant as demonstrated by relevant measures directly related to the purpose of the program.
Ability of individuals to transition or be integrated into the broader workforce and education system, as evidenced by employment and enrollment in relevant programs.
The department shall procure a technical assistance and evaluation contractor to convene communities of practice to identify and help replicate evidence-based practices and to help facilitate an assessment and evaluation of grant performance and program success.
A grant recipient shall participate in grant technical assistance and evaluation pursuant to subdivision (b).
A grant recipient shall provide all necessary information to the department for purposes of monitoring program performance measures. Program performance shall be based on, but not limited to, the following workforce measures:
Training completion.
Credential attainment.
Median earnings and employment of participants after they have exited the program.
Eligible activities for the program and grant funds shall include, but are not limited to, all of the following:
Labor market information.
Career exploration activities.
High school diploma and GED acquisition.
Skills and vocational training that aligns with regional labor market needs.
Work-based learning, transitional jobs, internships, on-the-job training, work experience, preapprenticeship, and apprenticeships.
Stipends for trainees.
Mentoring.
Other remedial education and work readiness skills.
Supportive services.
Entrepreneurial training and support for small business development.
Activities undertaken pursuant to subdivision (d) of Section 9923.
This article shall remain in effect only until July 1, 2027, and as of that date is repealed.
CHAPTER 3.5. Employment Training Panel [10200. - 10217.]
The Legislature finds and declares the following:
California’s economy is being challenged by competition from other states and overseas. In order to meet this challenge, California’s employers, workers, labor organizations, and government need to invest in a skilled and productive workforce, and in developing the skills of frontline workers. For purposes of this section, “frontline worker” means a worker who directly produces or delivers goods or services.
The purpose of this chapter is to establish a strategically designed employment training program to promote a healthy labor market in a growing, competitive economy that shall fund only projects that meet the following criteria:
Foster creation of high-wage, high-skilled jobs, or foster retention of high-wage, high-skilled jobs in manufacturing and other industries that are threatened by out-of-state and global competition, including, but not limited to, those industries in which targeted training resources for California’s small- and medium-sized business suppliers will increase the state’s competitiveness to secure federal, private sector, and other nonstate funds, and, in addition, provide for retraining contracts in companies that make a monetary or in-kind contribution to the funded training enhancements.
Encourage industry-based investment in human resources development that promotes the competitiveness of California industry through productivity and product quality enhancements.
Result in secure jobs for those who successfully complete training. All training shall be customized to the specific requirements of one or more employers or a discrete industry and shall include general skills, including soft skills, that trainees can use in the future.
Supplement, rather than displace, funds available through existing programs conducted by employers and government-funded training programs, such as the federal Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. Sec. 3101 et seq.), the Carl D. Perkins Vocational Education Act (Public Law 98-524), CalWORKs (Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code), the former Enterprise Zone Act (Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1 of the Government Code), and the McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.), the California Community Colleges Economic Development Program, or apportionment funds allocated to the community colleges, regional occupational centers and programs, or other local educational agencies.
The Employment Training Panel, in funding projects that meet the requirements of subdivision (a), shall give funding priority to those projects that best meet the following goals:
Result in the growth of the California economy by stimulating exports from the state and the production of goods and services that would otherwise be imported from outside the state.
Train new employees of firms locating or expanding in the state that provide high-skilled, high-wage jobs and are committed to an ongoing investment in the training of frontline workers.
Develop workers with skills necessary to work with new technologies or methods.
Train workers who have been displaced, have received notification of impending layoff, or are subject to displacement, because of a plant closure, workforce reduction, changes in technology, or significantly increasing levels of international and out-of-state competition.
Are jointly developed by business management and worker representatives.
Promote the retention and expansion of the state’s manufacturing workforce.
Promote the hiring, training, and advancement of disadvantaged, marginalized, and underrepresented workers.
The program established through this chapter is to be coordinated with all existing employment training programs and economic development programs, including, but not limited to, programs such as the federal Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. Sec. 3101 et seq.), the California Community Colleges, the regional occupational programs, vocational education programs, joint labor-management training programs, and related programs under the Employment Development Department, the Governor’s Office of Business and Economic Development, the California Housing and Homelessness Agency, and the Business and Consumer Services Agency.
Projects funded under this chapter may include programs to provide training through apprenticeship programs that are registered with the Division of Apprenticeship Standards.
The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2026.
As used in this chapter:
“Department” means the Employment Development Department.
“Employer” or “eligible employer” means any employer subject to Part 1 (commencing with Section 100) of Division 1, except any public entity, or any nonprofit organization which has elected an alternate method of financing its liability for unemployment insurance compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3.
Any public entity or nonprofit organization that has elected an alternate method of financing its liability for unemployment insurance compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3, shall be deemed to be an employer only for purposes of placement of new hire trainees who received training as an incidental part of a training project designed to meet the needs of one or more private sector employers.
“Eligible participant” means any person who, prior to beginning training or employment pursuant to this chapter, is any of the following:
Unemployed and has established an unemployment insurance claim in this state, or has exhausted eligibility for unemployment insurance benefits from this state within the previous 24 months.
Employed for a minimum of 90 days by his or her employer, or if employed for less than 90 days, met the conditions of paragraph (1) at the time of hire, had received a notice of layoff from the prior employer, or was employed by an employer for a period of not less than 90 days during the 180-day period prior to the employee’s current employment at the start of training with an eligible employer, as provided in subdivision (b). The panel may waive this requirement for trainees employed by a business locating or expanding operations in the state, provided it is part of a state and local economic development effort endeavoring to create or retain California jobs. The panel may also waive the requirement for up to 10 percent of the trainee population, if it determines a business meets standard funding requirements set out under subdivision (a) of Section 10200.
“Executive director” means the executive director appointed pursuant to Section 10202.
“Fund” means the Employment Training Fund created by Section 1610.
“Job” means employment on a basis customarily considered full time for the occupation and industry. The employment shall have definite career potential and a substantial likelihood of providing long-term job security, with reportable California earnings during the employment retention period. Furthermore, the employment shall provide earnings, upon completion of the employment requirement specified in subdivision (f) of Section 10209, equal to 50 percent, in the case of new hire training, or 60 percent, in the case of retraining, of the state or regional average hourly wage. However, in no case shall the employment result in earnings of less than 45 percent of the state average hourly wage for new hire training and 55 percent of the state average hourly wage for retraining. The panel may consider the dollar value of health benefits that are voluntarily paid for by an employer when computing earnings to meet the minimum wage requirements.
“New hire training” means employment training, including job-related literacy training, including soft skills, for persons who, at the start of training, are unemployed.
“Panel” means the Employment Training Panel created by Section 10202.
“Retraining” means employment-related skills and literacy training, including soft skills, for persons who are employed and who meet the definition of paragraph (2) of subdivision (c) prior to commencement of training and will continue to be employed by the same employer for at least 90 days following completion of training.
“Soft skills” means behaviors and competencies to allow people to navigate professional environments, work well with colleagues, and perform up to standards for professional success, including, but not limited to, all of the following:
Social skills, including, but not limited to, respectful personal interactions, context appropriate behavior, and conflict resolution.
Competency in oral, written, nonverbal, and listening skills.
Problem solving, critical thinking, and decisionmaking skills, including, but not limited to, identifying issues and evaluating options in order to reach a reasonable conclusion.
Self-regulation of behavior and the exercise of delayed gratification or directing focus or attention, or both.
“State average hourly wage” means the average weekly wage paid by employers to employees covered by unemployment insurance, as reported to the Employment Development Department for the four calendar quarters ending June 30 of the preceding calendar year, divided by 40 hours.
“Trainee” means an eligible participant.
“Training agency” means any private training entity or local educational agency.
With respect to funding appropriated in the annual Budget Act to the Employment Development Department for allocation by the Employment Training Panel and identified for training of workers in regions suffering from high unemployment and low job creation or regions identified in a proclamation of a state of emergency issued by the Governor under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), the panel, notwithstanding subdivision (f) of Section 10201, may waive the minimum wage requirements included in that subdivision provided that the post-retention wage of each trainee who has completed training and the required training period exceeds his or her wage before and during training. This determination shall be made on a case-by-case basis to ensure that post-training improvements in earnings are sufficient to warrant the investment of public funds.
The Employment Training Panel is established in the Employment Development Department.
The executive director shall be appointed by the Governor, and shall be well qualified for the position with experience in government. The executive director may perform all duties, exercise all powers, discharge all responsibilities, and administer and enforce all laws, rules, and regulations under the jurisdiction of the panel, with the approval of the panel. The executive director shall administer this chapter, with the approval of the panel, in the manner he or she deems necessary to conduct the work of the panel properly. With the approval of the panel, the executive director may create divisions and subdivisions as necessary, and change and abolish these divisions and subdivisions from time to time.
The panel may employ personnel necessary to carry out the purposes of this chapter. All personnel shall be appointed pursuant to the State Civil Service Act (Part 1 (commencing with Section 18000) of Division 5 of Title 2 of the Government Code), except for an executive director, and two assistant directors, who shall be exempt from state civil service.
All personnel of the panel shall be appointed, directed, and controlled only by the panel or its authorized deputies or agents to whom it may delegate its powers.
The Governor shall appoint two assistant directors, to serve at the pleasure of the Governor. The assistant directors shall have the duties as assigned by the executive director, and shall be responsible to the executive director for the performance of their duties.
The panel shall consist of eight persons, seven of whom shall be appointed as provided in subdivision (b), and shall have experience and a demonstrated interest in business management and employment relations. The Director of the Governor’s Office of Business and Economic Development, or his or her designee, shall also serve on the panel as an ex officio, voting member.
Two members of the panel shall be appointed by the Speaker of the Assembly. One of those members shall be a private sector labor representative and the other member shall be a business representative.
Two members of the panel shall be appointed by the President pro Tempore of the Senate. One of those members shall be a private sector labor representative and the other member shall be a business representative.
Three members of the panel shall be appointed by the Governor. One of those members shall be a private sector labor representative, one member shall be a business representative, and one member shall be a public member.
Labor appointments shall be made from nominations from state labor federations. Business appointments shall be made from nominations from state business organizations and business trade associations.
The Governor shall designate a member to chair the panel, and the person so designated shall serve as the chair of the panel at the pleasure of the Governor.
The appointive members of the panel, except members appointed by the Speaker of the Assembly, shall serve for two-year terms. The appointive members of the panel appointed by the Speaker of the Assembly shall serve at the pleasure of the Speaker of the Assembly.
Appointive members of the panel shall receive the necessary traveling and other expenses incurred by them in the performance of their official duties out of appropriations made for the support of the panel. In addition, each appointive member of the panel shall receive one hundred dollars ($100) for each day attending meetings of the panel, and may receive one hundred dollars ($100) for each day spent conducting other official business of the panel, but not exceeding a maximum of three hundred dollars ($300) per month.
The panel may meet as necessary at locations throughout the state. The panel shall maintain a minimum of three regional offices. The central office shall be located in Sacramento. Two regional offices shall be located in the southern part of the state, and one regional office shall be located in the northern part of the state.
The executive director will assign one person, with experience in meeting the needs of small businesses, to each of the regional offices for the purpose of developing training projects for small businesses and expediting the processing of training proposals from small businesses.
The panel shall coordinate its programs with local and state workforce development boards and other partners of the federal Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. Sec. 3101 et seq.). This coordination shall include, but not be limited to, the adoption of a plan, including regular sharing of data, for the coordination of training authorized pursuant to this chapter with programs administered under Division 8 (commencing with Section 15000).
The panel shall do all of the following:
Establish a three-year plan that shall be updated annually, based on the demand of employers for trained workers, changes in the state’s economy and labor markets, and continuous reviews of the effectiveness of panel training contracts. The updated plan shall be submitted to the Governor and the Legislature not later than January 1 of each year. In carrying out this section, the panel shall review information in the following areas:
Labor market information, including the state-local labor market information program in the Employment Development Department and other relevant regional or statewide initiatives and collaboratives.
Evaluations of the effectiveness of training as measured by increased security of employment for workers and benefits to the California economy.
The demand for training by industry, type of training, and size of employer.
Changes in skills necessary to perform jobs, including changes in basic literacy skills.
Changes in the demographics of the labor force and the population entering the labor market.
Proposed expenditures by other agencies of the federal Workforce Innovation and Opportunity Act of 2014 (29 U.S.C. Sec. 3101 et seq.) funds and other state and federal training and vocational education funds on eligible participants.
Maintain a system to continuously monitor economic and other data required under this plan. If this data changes significantly during the life of the plan, the plan shall be amended by the panel. Each plan shall include all of the following:
The panel’s objectives with respect to the criteria and priorities specified in Section 10200 and the distribution of funds between new-hire training and retraining.
The identification of specific industries, production and quality control techniques, and regions of the state where employment training funds would most benefit the state’s economy and plans to encourage training in these areas, including specific standards and a system for expedited review of proposals that meet the standards.
A system for expedited review of proposals that are substantially similar with respect to employer needs, training curriculum, duration of training, and costs of training, in order to encourage the development of proposals that meet the needs identified in paragraph (2).
The panel’s goals, operational objectives, and strategies to meet the needs of small businesses, including, but not limited to, those small businesses with 100 or fewer employees. These strategies proposed by the panel may include, but not be limited to, pilot demonstration projects designed to identify potential barriers that small businesses may experience in accessing panel programs and workforce training resources, including barriers that may exist within small businesses.
The research objectives of the panel that contribute to the effectiveness of this chapter in benefiting the economy of the state as a whole.
A priority list of skills or occupations that are in such short supply that employers are choosing to not locate or expand their businesses in the state or are importing labor in response to these skills shortages.
A review of the panel’s efforts to coordinate with the California Workforce Development Board and local boards to achieve an effective and coordinated approach in the delivery of the state’s workforce resources.
The panel will consider specific strategies to achieve this goal that include the development of initiatives to engage local workforce development boards in enhancing the utilization of panel training resources by companies in priority sectors, special populations, and in geographically underserved areas of the state.
Various approaches to foster greater program integration between workforce development boards and the panel will also be considered, which may include marketing agreements, expanded technical assistance, modification of program regulations and policy, and expanded use of multiple employer contracts.
Solicit proposals and write contracts on the basis of proposals made directly to it. Contracts for the purpose of providing employment training may be written with any of the following:
Fund training projects that best meet the priorities identified annually. In doing so, the panel shall seek to facilitate the employment of the maximum number of eligible participants.
Establish minimum standards for the consideration of proposals, which shall include, but not be limited to:
Evidence of labor market demand.
The number of jobs available.
The skill requirements for the identified jobs.
The projected cost per person trained, hired, and retained in employment.
The wages and amount of fringe benefits paid to successful trainees upon placement.
An attestation of compliance with all state and federal labor and health and safety laws.
The curriculum for the training.
No proposal shall be considered or approved that proposes training for employment covered by a collective bargaining agreement unless the signatory labor organization agrees in writing.
All applicants shall include in their application an attestation affirming the applicant does not have a final determination, order, judgment, or award has been issued against an applicant for violations of labor law that remain unabated or unsatisfied following the period during which an appeal may be made. No proposal shall be considered or approved if an applicant fails to include this attestation.
Ensure the provision of adequate fiscal and accounting controls for, monitoring and auditing of, and other appropriate technical and administrative assistance to, projects funded by this chapter.
Provide for evaluation of projects funded by this chapter. The evaluations shall assess the effectiveness of training previously funded by the panel to improve job security and stability for workers, and benefit participating employers and the state’s economy, and shall compare the wages of trainees in the 12-month period prior to training as well as the 12-month period subsequent to completion of training, as reflected in the department’s unemployment insurance tax records. Individual project evaluations shall contain a summary description of the project, the number of persons entering training, the number of persons completing training, the number of persons employed at the end of the project, the number of persons still employed three months after the end of the project, the wages paid, the total costs of the project, and the total reimbursement received from the Employment Training Fund.
Report annually to the Legislature, by November 30, on projects operating during the previous state fiscal year. These annual reports shall provide separate summaries of all of the following:
Projects completed during the year, including their individual and aggregate performance and cost.
Projects not completed during the year, briefly describing each project and identifying approved contract amounts by contract and for this category as a whole, and identifying any projects in which funds are expected to be disencumbered.
Projects terminated prior to completion and the reasons for the termination.
A description of the amount, type, and effectiveness of literacy training funded by the panel.
Results of complete project evaluations.
A description of pilot projects, and the strategies that were identified through these projects, to increase access by small businesses to panel training contracts.
A listing of training projects that were funded in high unemployment areas and a detailed description of the policies and procedures that were used to designate geographic regions and municipalities as high unemployment areas.
In addition, based upon its experience in administering job training projects, the panel shall include in these reports policy recommendations concerning the impact of job training and the panel’s program on economic development, labor-management relations, employment security, and other related issues.
Conduct ongoing reviews of panel policies with the goal of developing an improved process for developing, funding, and implementing panel contracts as described in this chapter.
Expedite the processing of contracts for firms considering locating or expanding businesses in the state, in accordance with the priorities for employment training programs set forth in subdivision (b) of Section 10200.
Coordinate and consult regularly with business groups and labor organizations, the California Workforce Development Board, the State Department of Education, the office of the Chancellor of the California Community Colleges, and the Employment Development Department.
Adopt by regulation procedures for the conduct of panel business, including the scheduling and conduct of meetings, the review of proposals, the disclosure of contacts between panel members and parties at interest concerning particular proposals, contracts, or cases before the panel or its staff, the awarding of contracts, the administration of contracts, and the payment of amounts due to contractors. All decisions by the panel shall be made by resolution of the panel and any adverse decision shall include a statement of the reason for the decision.
Provide a regularly updated list, at least every 60 days, and make the list available to the public, of all applicants that have submitted applications.
Adopt regulations and procedures providing reasonable confidentiality for the proprietary information of employers seeking training funds from the panel if the public disclosure of that information would result in an unfair competitive disadvantage to the employer supplying the information. The panel shall not withhold information from the public regarding its operations, procedures, and decisions that would otherwise be subject to disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
Review and comment on the budget and performance of any program, project, or activity funded by the panel utilizing funds collected pursuant to Section 976.6.
The panel may allocate money in the fund for any of the following purposes:
Reimbursement of reasonable training costs, and administrative costs incurred by contractors. In making a determination of costs to be reimbursed under this paragraph, the panel may allocate funds in accordance with any of the following methods:
For purposes of providing simplified fixed-fee performance contracts, a flat rate per hour for categories of training that are substantially similar with respect to content, methodology, and duration, as determined by the panel, not to exceed the reasonable and normal costs for the training. The panel shall periodically adjust the standardized rates established pursuant to this paragraph to reflect changes in training costs.
A complete review of the proposal and its costs, including a budget listing the planned costs of training, including personnel, fringe benefits, equipment, supplies, fees for consulting or administrative services, and other costs attributable to training; the services provided by subcontractors; the length and complexity of the training; the method of training; the wages and occupations following training; whether the trainees are new hires or retrainees; and the cost of similar training that the panel has funded previously. The cost of administration shall not exceed 15 percent of the training costs under this paragraph, except that for new hire training the panel may fund administrative costs of up to 25 percent of the training cost.
The panel may modify the specific requirements of this paragraph as they apply to employers or contractors proposing projects that involve training for a significant number of small employers in the same project.
A contractor is prohibited from utilizing any funds earned or paid as advances or progress payments for the purpose of making payments to any other individual or entity, either directly or indirectly, for costs incurred as a finder’s fee or for other compensation related to the predevelopment or development phase of a training program, which is based on a percentage of the preliminary or final panel award to the contractor for the training project.
Costs of program administration incurred under this chapter. These costs shall be reviewed annually by the Department of Finance and the Legislature and determined through the normal budgetary process.
The panel’s administrative costs, exclusive of the cost of administering Section 976.6, shall not exceed 15 percent of the total amount annually appropriated for expenditure by the panel. Expenditures for marketing, research, and evaluations provided under the contract to the panel that otherwise would have been provided directly by the panel shall not be included in this limitation.
Service related to the purposes of this chapter provided by the Small Business Development Centers.
For all training contracts, the panel shall establish requirements for in-kind contributions by either the contractor or the employer that reflect a substantial commitment on the part of the contractor or the employer to the value of the training. In developing these requirements, the panel shall take into account the ability of the contractor or the employer, because of size or financial condition, to make any contribution, and the ability of the Employment Training Fund to meet the demand for training authorized by this chapter. In developing policies regarding in-kind contributions, the panel shall hold public hearings.
The panel shall accept or reject a completed application within 60 days of the receipt by the executive director.
The panel shall develop expedited procedures for reviewing proposals submitted by the state agencies which are participants in a special interagency agreement with the panel for purposes of this chapter.
Nothing in this chapter shall be construed to preclude any employer from contracting with any public or private training entity for services, subject to the approval of the panel.
Contracts shall only be made for training in job-related vocational skills that are necessary for participants to attain a new job or retain an existing job with definite career potential and long-term job security. The contracts for vocational skills training may include ancillary training for job-related basic and literacy skills training, including soft skills, if the panel finds that the training is necessary to achieve the objectives of the vocational training.
The panel shall not approve any training proposal which facilitates the change in ownership of a business leading to the likelihood that an existing collective bargaining agreement would be declared void.
To encourage a broad and equitable distribution of funds, the panel may require an employer who has previously received funds pursuant to this chapter for retraining of workers at a facility to contribute proportionately more to the cost of training in subsequent panel contracts for training of workers at the same facility.
The panel may delegate to the executive director the authority to approve training contracts of up to one hundred thousand dollars ($100,000), provided the contracts meet the requirements of this chapter and the policies established by the panel, and provided that the panel regularly reviews the actions taken by the executive director pursuant to this subdivision.
Payments shall be made in accordance with a performance contract under which partial payments may be made during training, a partial payment may be made on placement or retention of each trainee, and not less than 25 percent of the negotiated fee is withheld until the trainee has been retained in employment for 90 days after the end of training with a single employer, except for those occupations in which it is not customary for a worker to be employed 90 consecutive days with a single employer. In these latter cases, the panel may substitute a period similar to the probationary period customary to the occupation. The probationary period shall not be less than 500 work hours and shall be completed within 272 days of the completion of the training. In no case shall any payment be considered to have been earned until the trainee has been retained in employment for 90 days or the equivalent probationary period for an occupation in which it is not customary for a worker to be employed 90 consecutive days with a single employer.
Contracts for new hire training shall require the contractor to provide the placement services necessary to ensure the trainees are placed in jobs for which they have been trained.
Contracts shall be made with training agencies only if the training agency can demonstrate all of the following:
The training agency has a satisfactory record of past performance in the placement and retention of former trainees and employer satisfaction with former trainees.
The training agency can demonstrate labor market demand for the proposed training. Proof shall include, but not be limited to, the documented need of specific employers for the workers proposed to be trained in the skills proposed by the training agency.
The training agency can demonstrate that the training prepares trainees in a manner satisfactory to employers.
The training agency can demonstrate that its accounting systems include controls adequate to check the accuracy and reliability of accounting data, promote operating efficiency, and assure compliance with government requirements and generally accepted accounting principles. The panel shall have full access at any time to these accounting systems to assure compliance with these standards.
A trainee or employee participating in a training program pursuant to this chapter shall be considered to be in a training program having the approval of the director under Article 1.5 (commencing with Section 1266) of Chapter 5 of Part 1 of Division 1.
The panel shall prepare a budget covering necessary administrative costs of the panel. The budget shall not be subject to change by the director except as agreed to by the panel. In the event that agreement cannot be reached, the Secretary of the Labor and Workforce Development Agency shall attempt to reach a mutual agreement. In the event a mutual agreement cannot be reached, the final decision shall rest with the Governor.
The Employment Development Department shall cooperate with the panel by offering necessary technical assistance, which may include, but is not limited to, labor market information, projections of occupational demand, and information and advice on alternative training strategies.
To assist the panel and the Legislature in assessing the impact of this chapter over an extended period of time, the Employment Development Department shall develop and maintain a continuous employment, wage, and benefit history of unemployment insurance participants.
The panel may allocate up to 15 percent of the annually available training funds for the purpose of funding special employment training projects that improve the skills and employment security of frontline workers, as defined in subdivision (a) of Section 10200. Notwithstanding any other provision of this chapter, participants in these projects are not required to meet the eligibility criteria set forth in paragraph (1) of subdivision (a) of Section 10200 or subdivision (c) of Section 10201.
The panel shall, on an annual basis or as needed in response to a proclamation of a state of emergency issued by the Governor under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), identify industries and occupations that shall be priorities for funding under this section. Training shall be targeted, but not limited, to frontline workers who earn at least the state average hourly wage.
The panel may waive the minimum wage provisions pursuant to subdivision (f) of Section 10201 for projects in regions of the state where the unemployment rate is significantly higher than the state average or regions identified in a proclamation of a state of emergency issued by the Governor under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), and also may waive the employment retentions provisions specified in subdivision (f) of Section 10209 and instead require that the trainee has been retained in employment for a minimum of 90 days out of 120 consecutive days after the end of training with no more than three employers.
The panel may allocate funds pursuant to subdivision (a) to increase the productivity and extended employment retention of workers in the state’s major seasonal industries.
In funding special employment training projects for this purpose, the panel may do all of the following:
When the amount of the postretention wages of each trainee who has completed training exceeds the amount of wages that the trainee earned before and during training, waive the minimum wage requirements set forth in subdivision (f) of Section 10201.
Waive the employment retention requirements set forth in subdivision (f) of Section 10209 and instead require that the trainee be retained in employment for not less than 500 hours within the 12-month period following the completion of the training.
When the panel finds that the training is necessary to achieve the objectives of vocational training, waive the limitation on job-related basic and literacy skills training, including soft skills, set forth in subdivision (a) of Section 10209.
For purposes of this section, “major seasonal industries” means eligible employers who satisfy all of the following requirements:
Have a workforce comprised of at least 50 percent of workers whose employment period is necessarily cyclical, including, but not limited to, businesses directly involved in the harvesting, packing, or processing of goods or products.
Have retained at least 50 percent of the same seasonal employees for at least one season of not less than 500 hours for the preceding 12-month period.
Pay wages and provide benefits that exceed industry averages.
The panel shall adopt minimum standards for consideration of proposals to be funded pursuant to this section.
The panel may select contracts funded under this section based on competitive bidding.
It is the intent of the Legislature in providing the authority for these projects that the panel allocate these funds in a manner consistent with the objectives of this chapter as provided in Section 10200.
The panel shall develop and publish guidelines for the purpose of supporting and implementing one or more alternative fund programs to reimburse the cost of training consistent with the purposes of this part, using funds from a source other than the employment training tax. The alternative funds may be from any federal, state, or local governmental entity, as appropriated in statute or other means. The guidelines shall include adequate fiscal and accounting controls, as prescribed in subdivision (f) of Section 10205.
The panel may adopt any regulations necessary to implement this section, but any regulations so adopted are exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
The panel may solicit proposals and enter into contracts or other agreements to secure funding for the purposes of this section, but those proposals, contracts, and agreements shall be exempt from any competitive bidding requirements otherwise prescribed in statute.
The panel shall allocate funds available in the annual Budget Act for training programs designed for individuals who are eligible to receive benefits under Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code or who have received CalWORKs benefits within one year of the commencement of the training program.
It is the intent of the Legislature in providing authority for these training programs that the panel allocate these funds in a manner consistent with the objectives of this chapter as provided in Section 10200.
Notwithstanding any other provisions of this chapter, the eligibility criteria for individuals trained under this section shall be employment with an eligible employer as defined in subdivision (a) of Section 10201 and:
Receipt of CalWORKs benefits at the time training begins, or
Receipt of CalWORKs benefits within one year of the time training commenced.
For purposes of this section, the panel may waive, if necessary, any of the following:
The employment retention provisions specified in subdivision (f) of Section 10209 and instead require that the trainee has been retained in employment for a minimum of 90 days out of 120 consecutive days after the end of training with no more than three employers.
Notwithstanding any other provisions of this chapter, the panel shall consider proposals that use innovative strategies and training options to enable current and prior CalWORKs recipients and eligibles to retain employment, including, but not limited to, projects that provide basic skills training.
The panel shall adopt administrative procedures for approving and administering contracts under this section to expedite contracts, minimize barriers to completion of training, and facilitate the training of single trainees and small groups of trainees from one worksite.
The panel may fund licensed nurse training programs to train individuals who are currently working as nurse assistants or caregivers in a health facility, as defined in Section 1250 of the Health and Safety Code.
It is the intent of the Legislature that the panel allocate these funds in a manner consistent with the objectives of this chapter as provided in Section 10200.
Notwithstanding any other provisions of this chapter, the panel shall waive the minimum wage provisions, pursuant to subdivision (f) of Section 10201, if all of the following conditions are met:
The employee is enrolled in an approved licensed nurse training program that consists of not less than 1,000 hours of training.
The employer pays the employee not less than 120 percent of the state minimum wage for not less than the first 20 hours of work per week during each week the employee is enrolled in the training program.
Each program results in full-time employment customary for the occupation for which the individuals are being trained.
Notwithstanding any other provisions of this chapter, the panel shall waive any limitation on the hourly length of training programs to allow approval and funding for up to 750 hours of a licensed nurse training program; provided, however, that those funds be used to pay for up to 750 training hours that remain in the licensed nurse training program after the employee has completed the first 800 hours of that program.
Notwithstanding any other provision of this chapter, employers that participate in the nurse training programs funded pursuant to this section, are not required to meet the eligibility criteria set forth in paragraph (1) of subdivision (a) of Section 10200.
The funding of individual project grants by the panel may take the form of either direct grants to the employer or training agency, or credits to the employer’s liability for unemployment insurance contributions or reimbursements. Credits to the employer’s liability for unemployment insurance contributions or reimbursements shall be drawn from the Employment Training Fund.
Funds in the Employment Training Fund created by Section 1610 shall be appropriated annually in the Budget Act by the Legislature for allocation by the panel for the purposes of this chapter, except those funds determined by the Legislature to be necessary to administer Section 976.6 and Article 6 (commencing with Section 1610) of Chapter 6 of Part 1 of Division 1 shall be appropriated to the department.
CHAPTER 4. Programs [10501. - 10501.]
ARTICLE 1. Eligibility [10501. - 10501.]
Any public assistance recipient who successfully completes a job training program approved under this part shall be exempted from the payment of those fees normally associated with any examination or certification required by state law if the employment opportunity is for the job for which the recipient was trained.
CHAPTER 4.5. California Employment and Training Planning [10510. - 10533.]
ARTICLE 1. Policies and Purposes [10510. - 10510.]
It is the intent of the Legislature, in enacting this chapter, to establish and implement a program of comprehensive and coordinated employment and training planning in California in accordance with the federal Job Training Partnership Act, as amended. The Legislature recognizes the need for a new employment and training planning structure which will provide for comprehensive analysis of alternative expenditure possibilities for the fiscal resources available in this field. The basic principles of the system are as follows:
That the employment and training needs at the local, regional, and state levels, be addressed.
That the expenditure of available funds meets the needs at the local level.
That employment and training programs be integrated into a uniform employment and training services planning system within substate regions.
That a uniform planning system shall coordinate employment and training programs and eliminate duplication of programs among state and local agencies.
That decisionmaking be decentralized, insofar as is practicable, to the governmental level closest to the people.
ARTICLE 2.5. California Workforce and Economic Information Program [10529. - 10529.]
The services provided by the existing labor market information system within the department shall include workforce and economic information that does all of the following:
Provides data and information to the state Workforce Investment Board created pursuant to Section 2821 of Title 29 of the United States Code, to enable the board to plan, operate, and evaluate investments in the state’s workforce preparation system that will make the California economy more productive and competitive.
Provides data and information for continuous strategic planning and the development of policies for the growth and competitiveness of the California economy.
Identifies and combines information from various state data bases to produce useful, geographically based analysis and products, to the extent possible using existing resources.
Provides technical assistance related to accessing workforce and economic information to local governments, public-sector entities, research institutes, nonprofit organizations, and community groups that have various levels of expertise, to the extent possible using existing resources.
The department shall coordinate with the State Department of Education, the Chancellor of the California Community Colleges, the State Department of Social Services, the California Postsecondary Education Commission, the Department of Finance, and the Franchise Tax Board in developing economic and workforce information. The department shall also solicit input in the operation of the program from public and private agencies and individuals that make use of the labor market information provided by the department.
ARTICLE 3. Coordination of Labor Market Information [10530. - 10533.]
It is the intent of the Legislature to establish a statewide comprehensive labor market and occupational supply and demand information system to coordinate the labor market information needs, including those specified in the statutes cited below, for the following entities:
The State Department of Education, pursuant to its responsibilities under Sections 321, 323, 332, 341, 343, 421, 422, and 423 of the federal Carl D. Perkins Vocational Education Act (20 U.S.C. Sec. 2301 et seq.), and Sections 8031, 8081, 8500, 51228, 52300, 52301.5, 52302, 52302.3, 52302.5, 52304, 52309, 52381, 52519, 52520, 52910, 52911, and 52912 of the Education Code.
The Employment Development Department, pursuant to its responsibilities under Article 1 (commencing with Section 1251) and Article 1.5 (commencing with Section 1266) of Chapter 5 of Part 1 of Division 1, Chapter 9 (commencing with Section 2051) of Part 1 of Division 1, Article 2 (commencing with Section 10521) of Chapter 4.5 of Part 1 of Division 3, and Chapter 6 (commencing with Section 15050) and Chapter 7.5 (commencing with Section 15075) of Division 8.
The Employment Training Panel, pursuant to its responsibilities under Chapter 3.5 (commencing with Section 10200) of Part 1 of Division 3.
The Department of Rehabilitation, pursuant to its responsibilities under Section 19152 of the Welfare and Institutions Code.
The State Department of Social Services, pursuant to its responsibilities under Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.
The State Job Training Coordinating Council, pursuant to its responsibilities under Chapter 4.5 (commencing with Section 10510) of Part 1 of Division 3, and Chapter 3 (commencing with Section 15020.1), Chapter 4 (commencing with Section 15030), Chapter 4.5 (commencing with Section 15035), and Chapter 7.5 (commencing with Section 15075) of Division 8.
The Employment Development Department shall operate the State-Local Cooperative Labor Market Information Program as the primary component of the comprehensive labor market and occupational supply and demand information system described by Section 10530. The department shall consult with agencies listed in Section 10530 in the development and operation of this program.
The objectives of this program shall be to produce, through extensive local participation and for distribution in effective formats to all local users, reliable occupational information, and to achieve cost-efficient production by avoiding duplication of efforts. The program shall be a primary source for local and statewide occupational information and shall be available in all labor market areas in the state.
In producing this information, state and local agencies shall use state occupational forecasts and other indicators of occupational growth, combined with local employer surveys of recruitment practices, job qualifications, earnings and hours, advancement and outlook, to provide statistically valid occupational analyses for local job training and education programs.
Local labor market information studies shall be conducted by the department or by a local entity and shall include the participation of local users of the information.
CHAPTER 5. Employment Services for the Deaf and Hearing Impaired [11000. - 11006.]
The Legislature finds that over 1.5 million persons in California are deaf or significantly hard of hearing. Private and public employment agencies are not routinely adapted to meet the communication needs of persons who are deaf and hard of hearing and, therefore, the services they receive may be less than those provided to other persons. The Legislature also finds that employment opportunities for persons who are deaf and hard of hearing are increased when specialized counseling, interpretive, job placement, and followup services supplement conventional employment services. In addition, the limited programs that provide these specialized employment services to persons who are deaf and hard of hearing have recently been subject to significant local funding reductions. Therefore, the Legislature finds that a more stable funding source, as provided by this chapter, is necessary to ensure the continuance of these programs.
As used in this chapter “contractor” means a public agency or a private nonprofit corporation.
The department shall contract with public agencies or private nonprofit corporations for a period not to exceed one year to provide employment services for persons who are deaf and hard of hearing. These employment services shall be provided onsite at the department’s offices which are selected pursuant to Section 11004.
At the end of each contract year, the department may renegotiate the terms of each contract in accordance with allowable increases or decreases in the contractor’s costs and the contractor’s demonstrated ability to provide the specified services.
If a contractor is a private nonprofit corporation, it shall submit a complete financial statement audited by a certified public accountant prior to a renewal of the contract.
Employment services for persons who are deaf and hard of hearing shall include, but not be limited to, the following:
Complete communication services for all preparatory, job placement, and followup activities. The communication services shall include interpreter services by a professional interpreter for persons who are deaf and hard of hearing possessing the comprehensive skills certification of the National Registry of Interpreters for the Deaf or the equivalent, telecommunications, and, when necessary, training in communication skills.
Advocacy to assure that persons who are deaf and hard of hearing receive equal access to public and private employment services.
Job development and job placement.
Employment counseling, including peer counseling by persons who are deaf and hard of hearing.
Followup counseling and problemsolving after placement.
The department, with the advice of persons knowledgeable about providing employment services to persons who are deaf and hard of hearing, shall establish the criteria for choosing contractors.
The criteria shall include, but not be limited to, all of the following:
The ability to provide services to a person who is deaf or hard of hearing in the person’s preferred mode of communication.
The ability to secure community support, including written endorsements of local officials, employers, the workforce investment board of the local workforce investment area, and organizations of and for persons who are deaf and hard of hearing.
The existence of funding from one or more public or private sources.
Preference shall be given in the selection of a contractor to those proposals which demonstrate all of the following:
The department shall do all of the following:
Determine the number and location of its offices within the state providing employment services to individuals who are deaf and hard of hearing and decide which offices shall be served by contractors given the resources available under this chapter. The department shall give priority to offices where contracts are necessary in order to prevent or minimize the disruption or the discontinuance of employment services to individuals who are deaf and hard of hearing which have been provided in conjunction with the department before July 1, 1984.
Coordinate the provision of employment services for individuals who are deaf and hard of hearing with the State Department of Social Services and the Department of Rehabilitation so that employment services provided by this chapter supplement or provide alternatives to services provided or funded by the departments.
Establish uniform accounting procedures and contracts for use with regard to this chapter.
Promulgate requests for proposals and conduct bidders’ conferences, and evaluate proposals according to the criteria established pursuant to Section 11003.
Use the definitions of deafness and significantly hard of hearing that have been used or established by regulation by the State Department of Social Services.
Conduct a management or fiscal audit of a contract whenever it is necessary for proper supervision of that contract.
Annually consider incorporation of the services described in this chapter in the job service plan required by Section 8 of the federal Wagner-Peyser Act of 1933 (29 U.S.C. Sec. 49g).
Assist contractors in maintaining all of the following information:
The number of persons receiving services.
A description of the services provided.
The cost of the services provided.
The number of persons placed in jobs.
The number of persons assisted by followup activities.
The number and qualifications of staff providing the services.
The Employment Development Department shall not expend over 5 percent of the sum appropriated for this chapter for its administrative costs.
CHAPTER 7. Caregiver Training Initiative [11020. - 11024.]
There is hereby established a project known as the Caregiver Training Initiative.
It is the intent of the Legislature that the Caregiver Training Initiative develop and implement proposals to recruit, train, and retain health care providers such as certified nurse assistants, certified nurses, registered nurses, licensed vocational nurses, and other types of nursing and direct-care staff.
An advisory council is hereby established for purposes of the Caregiver Training Initiative.
The advisory council shall develop goals, policies, and a general work plan for the Caregiver Training Initiative. For purposes of this paragraph, the advisory council shall consider the program model set forth in Section 11024.
The duties of the advisory council shall include all of the following:
Making recommendations regarding the identification of regions of the state for purposes of the initiative.
Making recommendations to the Employment Development Department and the State Department of Social Services regarding the number of regional collaborative programs that should be funded under the initiative.
Based on the number and size of the regions and programs to be funded, making recommendations to the Employment Development Department and the State Department of Social Services regarding the number of staff that should be assigned to the regions to assist in developing collaborative programs consisting of partnerships and funding proposals.
Making suggestions and recommendations to the Employment Development Department and the State Department of Social Services with regard to the selection of the collaborative programs to be funded in each region under the initiative and of the contracts entered into between the state and the local agencies representing regional partners.
Providing oversight of the progress of the initiative and identifying any needed corrective actions.
Designating a member of the advisory council to participate in the work group established by the Employment Development Department, in conjunction with the State Department of Social Services, pursuant to paragraph (2) of subdivision (a) of Section 11022.
The advisory council shall consist of the following:
Employment Development Department.
Office of Statewide Health Planning and Development.
State Department of Social Services.
State Department of Health Services.
California Department of Aging.
County Welfare Directors Association.
State Department of Education.
Chancellor’s Office of the California Community Colleges.
California Association of Health Facilities.
California Association of Homes and Services for the Aging.
American Red Cross.
California Nurses Association.
Service Employees International Union.
The Employment Development Department, in consultation with the State Department of Social Services, shall administer regional collaborative program selection and funding under the Caregiver Training Initiative.
The Employment Development Department, in conjunction with the State Department of Social Services, shall establish and lead a work group that shall be responsible for staff support to the advisory committee established pursuant to subdivision (c) of Section 11020.
The Employment Development Department, in conjunction with the State Department of Social Services, shall be responsible for all of the following:
Under the direction of the California Health and Human Services Agency, developing the criteria for regional collaborative programs, the number of staff to be assigned to regions, and the process for selecting regional collaborative programs to be funded.
Assigning staff to each region to assist in developing collaborative programs consisting of partnerships and proposals for funding.
Determining the date by which collaborative programs from each region shall submit their proposals for consideration.
Selecting the collaborative program proposal from each region that best meets the criteria established by the department.
Working with representatives from the health care provider and caregiver industries and labor, negotiating contract terms that best serve the initiative’s goals.
Approving all contracts for participation under the initiative.
Distributing funds to the appropriate local agencies to commence the regional collaborative programs.
Providing staff support to the advisory council established under subdivision (c) of Section 11020.
Carrying out state-level activities identified by the department that are necessary for the initiative’s success.
The Employment Development Department, in conjunction with the State Department of Social Services, shall evaluate or contract for the evaluation of the regional collaborative programs funded under the initiative. The evaluation of each program site funded under the initiative shall include the following elements:
A thorough assessment of implementation issues faced by grantees.
An analysis, using appropriate statistical techniques, of identified outcomes of interest, including employment retention, advancement, earnings, and worker well-being measures.
Annual population-based surveys of current and former CalWORKs recipients as they enter training programs and make choices about employment or subsequent job change.
Identification and collection of well-being data regarding health care providers and caregivers and the recipients of their care.
Construction and analysis of longitudinal administrative data.
In-depth interviews with workers, staff, health care providers, and caregivers.
The Employment Development Department shall develop a strategy to improve understanding of the demand and supply of labor, and the labor market dynamics for low-skilled workers who choose occupations such as certified nurse assistants. To develop the strategy, the department shall develop information about and analyze all of the following:
The treatment of staff in nursing homes and long-term care facilities.
Worker compensation claims and claims of workplace violence due to patients with Alzheimer’s disease or dementia.
Benefit packages.
On-the-job training for career advancement as a health care provider or caregiver in nursing homes or long-term care facilities or advancement in fields related to an occupation as a health care provider or caregiver.
The program model for implementation of the Caregiver Training Initiative shall consist of a solicitation and competitive selection process to identify proposals from regional collaborative programs that offer the best solutions to removing barriers for attracting and retaining qualified health care providers, such as certified nurse assistants, certified nurses, registered nurses, licensed vocational nurses, and other types of nursing and direct care staff.
Proposals for funding under the initiative submitted by regional collaborative programs shall address all of the following topics:
Marketing and outreach strategies that will attract eligible participants to begin careers in the health care provider industry and promote public awareness, especially among employers, to the opportunity to hire trained health care providers.
Collaboration and agreements with state and local agency partners to help identify, refer, and provide services to eligible participants.
Development and use of innovative training strategies, coupled with industry cooperation, to provide matching career paths that will enable participants to advance in the health care industry, including in nursing occupations such as certified nurse assistants, certified nurses, registered nurses, and licensed vocational nurses.
Strategies for providing incentives to health care employers to hire program participants, such as taking advantage of existing tax credits, and incentives for participants to remain in and graduate from the program, such as postemployment training and support components.
Leveraging additional resources to support activities that are not allowable with local welfare-to-work (Article 3.2 (commencing with Section 11320) of Chapter 1 of Part 3 of Division 9 of the Welfare and Institutions Code) funds and Workforce Investment Act of 1998 (29 U.S.C. Sec. 2801, et seq.) funds and that will provide flexibility in serving participants.
The regional collaborative programs that compete for contracts under the initiative may include partnerships of any combination of local governmental entities, private nonprofit entities, and employer or employee groups. In order to ensure oversight for funds used in these contracts, fiscal agents representing these collaborative programs shall demonstrate all of the following:
DIVISION 6. WITHHOLDING TAX ON WAGES [13000. - 13101.]
CHAPTER 1. General Provisions [13000. - 13019.]
The department shall have the powers and duties necessary to administer the reporting, collection, refunding to the employer, and enforcement of taxes required to be withheld by employers pursuant to Section 13020, except as otherwise provided by this division.
The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division:
Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments.
Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments.
Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice.
Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review.
Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review.
Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections.
Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations.
Except where the context otherwise requires, the definitions set forth in this chapter, and in addition the definitions and provisions of the Personal Income Tax Law referred to and hereby incorporated by reference as set forth in the following provisions of the Revenue and Taxation Code, shall apply to and govern the construction of this division:
“Corporation” as defined by Section 17009.
“Fiduciary” as defined by Section 17006.
“Fiscal year” as defined by Section 17011.
“Foreign country” as defined by Section 17019.
“Franchise Tax Board” as defined by Section 17003.
“Spouse” as defined by Section 17021.
“Individual” as defined by Section 17005.
“Military or naval forces” as defined by Section 17022.
“Nonresident” as defined by Section 17015.
“Partnership” as defined by Section 17008.
“Person” as defined by Section 17007.
“Resident” as defined by Sections 17014 and 17016.
“State” as defined by Section 17018.
“Taxable year” as defined by Section 17010.
“Taxpayer” as defined by Section 17004.
“Trade or business” as defined by Section 17020.
“United States” as defined by Section 17017.
The provisions of Part 10 (commencing with Section 17001) and Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code, relating to the following items, are hereby incorporated by reference and shall apply to and govern construction of this division:
Trade or business expense (Article 6 (commencing with Section 17201) of Chapter 3 of Part 10).
Deductions for retirement savings (Article 6 (commencing with Section 17201) of Chapter 3 of Part 10).
Distributions of property by a corporation to a shareholder (Chapter 4 (commencing with Section 17321) of Part 10).
Deferred compensation (Chapter 5 (commencing with Section 17501) of Part 10).
Partners and partnerships (Chapter 10 (commencing with Section 17851) of Part 10).
Gross income of nonresident taxpayers (Chapter 11 (commencing with Section 17951) of Part 10).
Postponement of the time for certain acts by individuals in or in support of the Armed Forces (Article 3 (commencing with Section 18621) of Chapter 2 of Part 10.2).
Disclosure of information (Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2). For this purpose “Franchise Tax Board” as used therein shall mean the Employment Development Department in respect to information obtained in the administration of this division.
“Employee” means a resident individual who receives remuneration for services performed within or without this state or a nonresident individual who receives remuneration for services performed within this state and includes an officer, employee, or elected official of the United States, a state, territory, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing. “Employee” also includes an officer of a corporation.
Whether an individual provides equipment in the performance of services for remuneration shall not be considered in a determination of whether that individual is an employee.
“Employee” does not include any individual if all of the following conditions exist:
The individual is licensed pursuant to the provisions of Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code and is performing services in the capacity of a licensee, or the individual is engaged in the trade or business of primarily in-person demonstration and sales presentation of consumer products, including services or other intangibles, in the home or sales to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis, for resale by the buyer or any other person in the home or otherwise than in a retail or wholesale establishment.
Substantially all of the remuneration (whether or not paid in cash) for the services performed by that individual is directly related to sales or other output (including the performance of services) rather than to the number of hours worked by that individual.
The services performed by the individual are performed pursuant to a written contract between that individual and the person for whom the services are performed and the contract provides that the individual will not be treated as an employee with respect to those services for state tax purposes.
“Employee” also means any individual who is an employee pursuant to Section 2750.5 of the Labor Code, of a person who holds a valid state contractor’s license pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code.
When subdivision (a) does not apply, “employee” shall also mean any individual who is an employee, pursuant to Section 2750.5 of the Labor Code, of a person who is required to obtain a valid state contractor’s license pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code.
“Employee” does not include any member of a limited liability company that is treated as a partnership for federal income tax purposes.
“Employer” means any individual, person, corporation, association, partnership, or limited liability company, or any agent thereof, doing business in this state, deriving income from sources within this state, or in any manner whatsoever subject to the laws of this state, the State of California or any political subdivision or agency thereof, including the Regents of the University of California, any city organized under a freeholders’ charter, or any political body not a subdivision or agency of the state, and any person, officer, employee, department, or agency thereof, making payment of wages to employees for services performed within this state, except as provided in subdivision (b).
If the employer, as defined in subdivision (a), for whom the employee performs or performed the service does not have control of the payment of wages for such services, “employer” (except for purposes of Section 13009) means the person having control of the payment of such wages, whether or not the person having control of the payment of such wages is subject to the jurisdiction of the laws of this state.
An employment agency, as defined in paragraph (3) of subdivision (a) or (h) of Section 1812.501 of the Civil Code shall not be deemed the employer of the domestic worker for whom it procures, offers, refers, provides, or attempts to provide work if all of the factors set forth in Section 687.2 exist.
“Gross income” means all compensation for services including fees, commissions, and similar items, except as otherwise provided by this division. “Gross income” shall specifically include those items relating to compensation specified by Article 2 (commencing with Section 17081) of, and shall specifically exclude those items relating to compensation specified by Article 3 (commencing with Section 17131) of, Chapter 3 of Part 10 of Division 2 of the Revenue and Taxation Code.
“Miscellaneous payroll period” means a payroll period other than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll period.
“Payroll period” means a period for which a payment of wages is ordinarily made to the employee by his or her employer.
“Wages” means all remuneration, other than fees paid to a public official, for services performed by an employee for their employer, including all remuneration paid to a nonresident employee for services performed in this state, and the cash value of all remuneration paid in any medium other than cash, except as provided by this section. “Wages” includes tips received by an employee in the course of employment. The wages shall be deemed to be paid at the time a written statement including tips is furnished to the employer pursuant to Section 13055 or, if no statement including those tips is so furnished, at the time received. “Wages” includes compensation, that is deductible under Section 162 of the Internal Revenue Code, paid to a member of a limited liability company filing a federal corporate income tax return.
“Wages” shall not include remuneration paid under any of the following conditions:
For agricultural labor, as defined in subdivision (g) of Section 3121 of the Internal Revenue Code.
For domestic service in a private home, local college club, or local chapter of a college fraternity or sorority.
For service not in the course of the employer’s trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for that service is fifty dollars ($50) or more and the service is performed by an individual who is regularly employed by the employer to perform the service. For purposes of this subdivision, an individual shall be deemed to be regularly employed by an employer during a calendar quarter only if either of the following conditions is met:
On each of some 24 days during the quarter, the individual performs for the employer for some portion of the day service not in the course of the employer’s trade or business.
The individual was regularly employed, as determined under paragraph (1), by the employer in the performance of the service during the preceding calendar quarter.
For services by a citizen or resident of the United States for a foreign government or an international organization.
For services performed by a nonresident individual who is not a citizen or national of the United States as designated by regulations prescribed by the department.
For services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of their ministry or by a member of a religious order in the exercise of duties required by the order.
For services performed by an individual under the age of 18 years in delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution.
For services performed by an individual in, and at the time of, the sale of newspapers or magazines to ultimate consumers, under an arrangement under which the newspapers or magazines are to be sold by the individual at a fixed price, the individual’s compensation being based on the retention of the excess of the price over the amount at which the newspapers or magazines are charged to the individual whether or not the individual is guaranteed a minimum amount of compensation for the services, or is entitled to be credited with the unsold newspapers or magazines turned back.
For services not in the course of the employer’s trade or business, to the extent paid in any medium other than cash.
To, or on behalf of, an employee or their beneficiary under any of the following situations:
From or to a trust which is exempt from tax under Section 17631 of the Revenue and Taxation Code at the time of payment, unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.
Under or to an annuity plan which, at the time of payment, is a plan qualified pursuant to Chapter 5 (commencing with Section 17501) of Part 10 of Division 2 of the Revenue and Taxation Code.
Under or to a bond purchase plan which, at the time of payment, is a bond purchase plan qualified pursuant to Chapter 5 (commencing with Section 17501) of Part 10 of Division 2 of the Revenue and Taxation Code.
For a payment which qualifies for deduction by an employee pursuant to Section 219 of the Internal Revenue Code if, at the time of payment, it is reasonable to believe that the employee will be entitled to a deduction under that section for payment.
Under a cafeteria plan (within the meaning of Section 125 of the Internal Revenue Code).
To a master, officer, or any other seaman who is a member of a crew on a vessel engaged in foreign, coastwise, intercoastal, interstate, or noncontiguous trade.
Pursuant to any provision of law other than Section 5(c) of the Peace Corps Act (22 U.S.C. Sec. 2504(c)) or 6(1) of the Peace Corps Act (22 U.S.C. Sec. 2505(1)), for service performed as a volunteer or volunteer leader within the meaning of that act.
In the form of group-term life insurance on the life of an employee.
To or on behalf of an employee, and to the extent that, at the time of the payment of remuneration it is reasonable to believe that a corresponding deduction is allowable for moving expenses pursuant to Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 of Division 2 of the Revenue and Taxation Code.
As tips in any medium other than cash.
As cash tips to an employee in any calendar month in the course of employment by an employer, unless the amount of the cash tips is twenty dollars ($20) or more.
For service performed by an individual on a boat engaged in catching fish or other forms of aquatic animal life under an arrangement with the owner or operator of the boat pursuant to which all of the following apply:
The individual does not receive any cash remuneration, other than as provided in paragraph (2).
The individual receives a share of the boat’s (or the boats’ in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life or a share of the proceeds from the sale of the catch.
The amount of the individual’s share depends on the amount of the boat’s (or the boats’ in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life.
This subdivision shall apply only where the operating crew of the boat (or each boat from which the individual receives a share in the case of a fishing operation involving more than one boat) is normally made up of fewer than 10 individuals.
For any medical care reimbursement made to, or for the benefit of, an employee under a self-insured medical reimbursement plan pursuant to Section 105(h)(6) of the Internal Revenue Code.
To, or on behalf of, an employee to the extent not includable in gross income pursuant to Section 13006.
For services to which Section 633 applies.
For purposes of the report required by subdivision (a) of Section 1088 and the statement required by Section 13050, “wages subject to personal income tax” means all of the following:
Remuneration described in subdivisions (a), (b), (f), and (l) of Section 13009, to the extent included in gross income.
Payments made by a third party for sick pay as specified in Section 931.5.
Any employer who receives a report of wages from a third-party payer as provided for in subdivisions (a) and (b) of Section 931.5 shall report those wages to the department as required under paragraph (2) of subdivision (a) of Section 1088.
Any third-party payer described in Section 931.5 who fails to report wages to an employer as provided for in that section shall report those wages to the department as required under paragraph (2) of subdivision (a) of Section 1088.
A person or entity shall not be required to register with the Employment Development Department solely for the purpose of reporting wages subject to personal income tax pursuant to Section 1088 unless that registration is otherwise required by this code.
“Withholding agent” means any person required to deduct and withhold any tax under the provisions of Section 13020.
The department shall retain the possession and control of all records, papers, offices, equipment, supplies, moneys, funds, appropriations, land, and other property real or personal held for the benefit or use of the Franchise Tax Board in the performance of the duties, powers, purposes, responsibilities, and jurisdiction of the Franchise Tax Board that were previously delegated by Section 15702.1 of the Government Code and that are vested in the department by Section 13000.
All regulations heretofore adopted by the Franchise Tax Board pursuant to powers transferred to the department by this division and in effect immediately preceding the operative date of this division, shall remain in effect and shall be fully enforceable unless and until readopted, amended, or repealed by the director.
This division does not apply to the payment of interest obligations not taxable under this division.
The department is authorized to require such information with respect to persons subject to the taxes imposed by this division as is necessary or helpful in securing proper identification of such persons.
When necessary to make effective the provisions of this division, the name and address of the recipient of income shall be furnished upon demand of the person paying the income.
Unless otherwise specifically provided, the provisions of any law effecting changes in withholding under this division shall begin in the manner set forth by Section 18665 of the Revenue and Taxation Code.
Except as otherwise provided by this division or other express provision of law, the information furnished or secured pursuant to this division shall be used solely for the purpose of administering the tax laws or other laws administered by the person or agency obtaining it. Any willful unauthorized inspection or unwarranted disclosure or use of the information by the person or agency, or the employees and officers thereof, is a misdemeanor. For purposes of this section, “inspection” means any examination of confidential information furnished or secured pursuant to this division.
The department shall notify a taxpayer of any known incidents of willful unauthorized inspection or unwarranted disclosure or use of the taxpayer’s confidential tax records, but only if criminal charges have been filed for the willful unauthorized inspection or unwarranted disclosure.
With respect to tax advice, the protections of confidentiality that apply to a communication between a client and an attorney, as set forth in Article 3 (commencing with Section 950) of Chapter 4 of Division 8 of the Evidence Code, also shall apply to a communication between a taxpayer and any federally authorized tax practitioner to the extent the communication would be considered a privileged communication if it were between a client and an attorney.
Paragraph (1) may only be asserted in any noncriminal tax matter before the Employment Development Department.
For purposes of this section:
“Federally authorized tax practitioner” means any individual who is authorized under federal law to practice before the Internal Revenue Service if the practice is subject to federal regulation under Section 330 of Title 31 of the United States Code, as provided by federal law as of January 1, 2000.
“Tax advice” means advice given by an individual with respect to a state tax matter, which may include federal tax advice if it relates to the state tax matter. For purposes of this subparagraph, “federal tax advice” means advice given by an individual within the scope of his or her authority to practice before the federal Internal Revenue Service on noncriminal tax matters.
“Tax shelter” means a partnership or other entity, any investment plan or arrangement, or any other plan or arrangement if a significant purpose of that partnership, entity, plan, or arrangement is the avoidance or evasion of federal income tax.
The privilege under subdivision (a) shall not apply to any written communication between a federally authorized tax practitioner and a director, shareholder, officer, or employee, agent, or representative of a corporation in connection with the promotion of the direct or indirect participation of the corporation in any tax shelter, or in any proceeding to revoke or otherwise discipline any license or right to practice by any governmental agency.
This section shall be operative for communications made on or after the effective date of the act adding this section.
CHAPTER 2. Withholding and Payment of Tax [13020. - 13031.]
Every employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, shall deduct and withhold from those wages, except as provided in subdivision (c) and Sections 13025 and 13026, for each payroll period, a tax computed in that manner as to produce, so far as practicable, with due regard to the credits for personal exemptions allowable under Section 17054 of the Revenue and Taxation Code, a sum which is substantially equivalent to the amount of tax reasonably estimated to be due under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code resulting from the inclusion in the gross income of the employee of the wages which were subject to withholding. The method of determining the amount to be withheld shall be prescribed by the Franchise Tax Board pursuant to Section 18663 of the Revenue and Taxation Code.
For each payroll period ending on or after November 1, 2009, the sum shall comport with the changes made to Section 18663 of the Revenue and Taxation Code, by the act adding this paragraph.
The department upon request may permit the use of accounting machines to calculate the proper amount to be deducted and withheld from wages, if the calculation produces an amount substantially equivalent to the amount of tax required to be withheld under subdivision (a).
Withholding shall not be required by this section with respect to wages, salaries, fees, or other compensation paid by a corporation for services performed in California for that corporation to a nonresident corporate director for director services, including attendance at a board of directors’ meeting.
Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d), the employer shall file a withholding report, a quarterly return, as described in subdivision (a) of Section 1088, and a report of wages, and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter.
Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of business days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder.
Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Account as of June 30 in the prior fiscal year:
Notwithstanding paragraphs (1) and (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as described by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the state’s demand account within three business days after the date the employer meets the threshold for the one-day deposit rule.
Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amount paid in excess of twenty thousand dollars ($20,000), as stated in paragraph (1) was the result of an unprecedented occurrence for that employer, and was not representative of the employer’s cumulative average payment in prior years.
A state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund.
An employer not required to make payment pursuant to subdivision (d) may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions:
The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department.
If approved, the election shall be effective on the date specified in the notification to the employer of approval.
The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department.
Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method.
Notwithstanding Section 1112, interest and penalties shall not be assessed against an employer that remits at least 95 percent of the amount required by subdivision (c) or (d) if the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with subdivision (c) or (d).
The department may, if it believes that action is necessary, require any employer to make the report or return required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a).
An employer required to withhold any tax and that is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more.
For purposes of subdivisions (a), (c), and (h), payment that is not required to be made by electronic funds transfer is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail.
In addition to the withholding report, quarterly return, and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information the director shall prescribe. This annual reconciliation return shall be due on the first day of January following the close of the prior calendar year and shall become delinquent if not filed on or before the last day of that month.
The requirement to file the annual reconciliation return for the prior calendar year under this subdivision shall not apply to the 2012 calendar year and thereafter.
The requirement in subdivision (a) to file a quarterly return shall begin with the first calendar quarter of the 2011 calendar year.
The changes made to this section by Chapter 783 of the Statutes of 2012 shall apply on and after January 1, 2013.
“Electronic funds transfer” means a transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfers shall be accomplished by an automated clearinghouse debit, an automated clearinghouse credit, Fedwire, or by other specific electronic funds transfer methods approved in advance by the department.
“Automated clearinghouse” means a federal reserve bank, or an organization established in agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks and/or bank accounts and which authorizes an electronic transfer of funds between those banks or bank accounts.
“Automated clearinghouse debit” means a transaction in which the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the employer’s bank account and crediting the state’s bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction shall be paid by the state.
“Automated clearinghouse credit” means an automated clearinghouse transaction in which the employer, through its own bank, originates an entry crediting the state’s bank account and debiting its own bank account. Banking costs incurred for the automated clearinghouse credit transaction charged to the employer and to the state shall be paid by the employer.
“Fedwire” means a transaction originated by the employer and utilizing the national electronic payment system to transfer funds through the federal reserve banks, pursuant to which the employer debits its own bank account and credits the state’s bank account. Electronic funds transfer payments may be made by Fedwire only if prior approval is obtained from the department and payment cannot, for good cause, be made pursuant to subdivision (a). Banking costs incurred for the Fedwire transaction charged to the employer and to the state shall be paid by the employer.
“Business day” means any day other than a Saturday, Sunday, legal holiday as recognized by the Internal Revenue Service, statewide legal holiday as recognized by the State of California pursuant to Section 6700 of the Government Code, or a day in which the department is closed pursuant to Section 12b of the Code of Civil Procedure.
“Settlement date” means the date on which an exchange of funds with respect to an entry is reflected on the books of the Federal Reserve Bank.
For the purposes of Section 13021, the “cumulative average payment” means the cumulative dollar amount of deposits divided by the number of payments submitted during a given period. For the purposes of this section, the “cumulative average payment” may also be defined as a single annual deposit, when only one payment is made during the 12-month period ending June 30.
In determining the amount to be deducted and withheld under Section 13020, the wages may, at the election of the employer, be computed to the nearest dollar.
The department may, by regulation, permit employers to estimate the wages which will be paid to any employee in any quarter of the calendar year, to determine the amount to be deducted and withheld upon each payment of wages to such employee during such quarter as if the appropriate average of the wages so estimated constituted the actual wages paid, and to deduct and withhold upon any payment of wages to such employee, during such quarter such amount as may be necessary to adjust the amount actually deducted and withheld upon the wages of such employee during such quarter to the amount that would be required to be deducted and withheld during such quarter if the payroll period of the employee were quarterly.
The department may provide by authorized regulation, under such conditions and to such extent as it deems proper, for withholding in addition to that otherwise required under Section 13020 in cases in which the employer and employee agree to such additional withholding. Such additional withholding shall for all purposes be considered a tax required to be deducted and withheld under this division.
In the case of remuneration paid in any medium other than cash for services performed by an individual as a retail salesperson for a person where the service performed by such individual for such person is ordinarily performed for remuneration solely by way of cash commission an employer shall not be required to deduct or withhold any tax under this division with respect to such remuneration, if such employer files with the department such information with respect to such remuneration as the department may prescribe by regulation.
An employer shall not be required to deduct and withhold any tax under this division upon a payment of wages (except wages exempt from federal income tax but not exempt under this division) to an employee if there is in effect with respect to such payment a withholding exemption certificate, in such form and containing such other information as the department may prescribe, furnished to the employer by the employee certifying that the employee—
Incurred no liability for federal income tax imposed under subtitle A of the Internal Revenue Code of 1954 for his or her preceding taxable year, and
Anticipates that he or she will incur no liability for federal income tax imposed under subtitle A of the Internal Revenue Code of 1954 for his or her current taxable year.
In the case of tips which constitute wages, subdivision (a) of Section 13020 shall be applicable only to such tips as are included in a written statement furnished to the employer pursuant to Section 13055, and only to the extent that the tax can be deducted and withheld by the employer, at or after the time such statement is so furnished and before the close of the calendar year in which such statement is furnished, from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer for the purpose of such deduction and withholding) as are under the control of the employer. An employer who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to Section 13055 to which paragraph (2) of subdivision (n) of Section 13009 is applicable may deduct and withhold the tax with respect to such tips from any wages of the employee (excluding tips) under his or her control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his or her employment by the employer is less than twenty dollars ($20). Such tax shall not at any time be deducted and withheld in any amount which exceeds the aggregate of such wages and funds.
For purposes of this division (and so much of Part 10 (commencing with Section 17001) and Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code as relates to this division) pensions, annuities, and other deferred income, as described in Section 3405 of the Internal Revenue Code, are wages and subject to withholding under this division. Amounts withheld shall be treated as if the amounts are withheld by an employer for a payroll period and only amounts withheld shall be reported to the department pursuant to Section 1088 and Section 13021.
If an individual makes an election under Section 3405(a)(2) or Section 3405(b)(2) of the Internal Revenue Code not to have tax withheld, that election shall apply to withholding under this division, unless the individual elects, with the consent of the payer, to have those payments subject to withholding under this division. If an individual has not made an election under Section 3405(a)(2) or Section 3405(b)(2) of the Internal Revenue Code, that individual may elect to exclude those payments from withholding under this division. Elections provided in this subdivision shall be made pursuant to regulations of the director.
Where Section 3405 of the Internal Revenue Code provides that tables or other computational procedures shall be prescribed by the Secretary of the Treasury, for the purposes of this division, any of the following amounts may be withheld, upon election of the payer:
An amount determined by the method prescribed under Section 13020.
A designated dollar amount as requested by the payee.
Ten percent of the amount of federal withholding computed pursuant to Section 3405 of the Internal Revenue Code.
Where the amount of withholding computed pursuant to subdivision (c) is less than ten dollars ($10) per month, the payer shall not be required to withhold that amount.
This section shall not apply to pensions, annuities, and other deferred income of payees with addresses outside this state, as shown on the most current records of the payer.
The department shall, in consultation with the affected payers and payees, issue regulations to implement this section.
Those regulations shall provide for delay (but not beyond July 1, 1987) of the application of this section with respect to any payer or class of payers until that time as the payers are able to comply without undue hardship with the requirements of this section. In that case, no retroactive compliance shall be required.
If the director determines that nonpayment of tax by a nonresident under the income tax laws of this state may occur, the director shall notify the payer of payments described in subdivision (a) of Section 13028 that withholding shall be made from those payments. Upon notice from the director, the payer shall withhold from those payments as if they were subject to Section 13020. The director shall also notify the payee that withholding has been ordered pursuant to this section, and the reason for his or her determination that nonpayment of tax may occur.
For purposes of this division (and so much of Part 10 (commencing with Section 17001) and Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code as relates to this division) any supplemental unemployment compensation benefit paid to an individual shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.
For purposes of subdivision (a), “supplemental unemployment compensation benefits” means amounts which are paid to an employee, pursuant to a plan to which the employer is a party, because of an employee’s involuntary separation from employment (whether or not that separation is temporary), resulting directly from a reduction in force, the discontinuance of a plant or operation, or other similar conditions, but only to the extent those benefits are includable in the employee’s gross income.
For purposes of this division (and so much of Part 10 (commencing with Section 17001) and Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code as relates to this division), any payment to an individual of sick pay which does not constitute wages (determined without regard to this subdivision), if at the time the payment is made a request that such sick pay be subject to withholding under this division is in effect, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.
For purposes of this subdivision, “sick pay” means any amount which satisfies both of the following:
Is paid to an employee pursuant to a plan to which the employer is a party.
Constitutes remuneration or a payment in lieu of remuneration for any period during which the employee is temporarily absent from work on account of sickness or personal injuries.
If a payee makes a request that any sick pay be subject to withholding under this chapter, the amount to be deducted and withheld under this chapter from any payment to which that request applies shall be an amount (not less than a minimum amount determined by the Franchise Tax Board) specified by the payee in that request. The amount deducted and withheld with respect to a payment which is greater or less than a full payment shall bear the same relation to the specified amount as that payment bears to a full payment.
Shall be made by the payee in writing to the person making the payments and shall contain the social security number of the payee.
Shall specify the amount to be deducted and withheld from each full payment.
Shall take effect with respect to payments made more than seven days after the date on which that request is furnished to the payer, or as the department shall by regulations prescribe. That request may be changed or terminated by furnishing to the person making the payments a written statement of change or termination which shall take effect in the same manner as provided in the preceding sentence. At the election of the payer, any such request (or statement of change or revocation) may take effect earlier than as provided in this subparagraph.
The requirement of paragraph (3) of subdivision (a) that a request for withholding be in effect shall not apply.
Except as provided in Section 13026, the amounts to be deducted and withheld under this chapter shall be determined in accordance with that agreement.
The preceding sentence shall not apply with respect to sick pay paid pursuant to any agreement to any individual, unless the social security number of that individual is furnished to the payer and the payer is furnished with that information as is necessary to determine whether the payment is pursuant to the agreement and to determine the amount to be deducted and withheld.
The department may by authorized regulations provide for withholding—
From remuneration for services performed by an employee for his or her employer which (without regard to this section) does not constitute wages, and
From any other type of payment with respect to which the department finds that withholding would be appropriate under the provisions of this division,
if the employer and the employee, or in the case of any other type of payment the person making and the person receiving the payment, agree to the withholding. The agreement shall be made in the form and manner as the department may by authorized regulations provide. For purposes of this division (and so much of Part 10 (commencing with Section 17001) and Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code as relates to this division) remuneration or other payments with respect to which the agreement is made shall be treated as if they were wages paid by an employer to an employee to the extent that the remuneration is paid or other payments are made during the period for which the agreement is in effect.
If wages are paid with respect to a period which is not a payroll period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days, including Sundays and holidays, equal to the number of days in the period with respect to which such wages are paid. In any case in which wages are paid by an employer without regard to any payroll period or other period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days equal to the number of days, including Sundays and holidays, which have elapsed since the date of the last payment of such wages by such employer during the calendar year, or the date of commencement of employment with such employer during such year, or January 1st of such year, whichever is the later. In any case in which the period of time described, or the time prescribed in the preceding sentence in respect of any wages, is less than one week, the department may by authorized regulation permit an employer, in computing the tax required to be deducted and withheld, to use the excess of the aggregate of the wages paid to the employee during the calendar week over the withholding exemption allowed by Section 13020 for a weekly payroll period.
If the remuneration paid by an employer to an employee for services performed during one-half or more of any payroll period of not more than 31 consecutive days constitutes wages, all the remuneration paid by such employer to such employee for such period shall be deemed to be wages, but if the remuneration paid by an employer to an employee for services performed during more than one-half of any such payroll period does not constitute wages, then none of the remuneration paid by such employer to such employee for such period shall be deemed to be wages.
CHAPTER 3. Withholding Exemptions [13040. - 13043.]
An employer shall use the exemption certificate filed by the employee with the employer in such form and containing such information as the department may prescribe, for determining the number of withholding exemptions to be allowed in computing the tax required to be deducted and withheld under Section 13020. However, if the employer cannot determine the employee’s marital status from the exemption certificate the employee shall be considered unmarried.
No withholding exemptions shall be allowed until the employee files a new withholding exemption certificate if the department finds that the withholding exemption certificate filed under this division does not properly reflect the number of exemptions allowable and so advises the employer in writing.
The number and amount of withholding exemptions allowed shall be based upon the persons claimed in a withholding exemption certificate in effect under Section 13040, except that if no such certificate is in effect, the number of withholding exemptions claimed shall be considered to be zero.
A new withholding exemption certificate filed under this division in cases in which a previous certificate was in effect shall take effect with respect to the first payment of wages made on or after the first status determination date which occurs at least 30 days from the date on which such certificate is so furnished, except that at the election of the employer such certificate may be made effective with respect to any payment of wages made on or after the date on which such certificate is so furnished.
For purposes of this section, “status determination date,” means January 1, May 1, July 1, and October 1, of each year.
The amount to be deducted and withheld under this division shall be prescribed pursuant to Section 18663 of the Revenue and Taxation Code when a payment of wages is made to an employee by an employer in any of the following cases:
With respect to a payroll period or other period, any part of which is included in a payroll period or other period with respect to which wages are also paid to the employee by the employer.
Without regard to any payroll period or other period, but on or prior to the expiration of a payroll period or other period with respect to which wages are also paid to the employee by the employer.
With respect to a period beginning in one and ending in another calendar year.
Through an agent, fiduciary, or other person who also has the control, receipt, custody, or disposal of, or pays, the wages payable by another employer to the employee.
For purposes of this section, an employee’s remuneration may consist of wages paid for a payroll period and supplemental wages.
Supplemental wages include, but are not limited to, bonus payments, overtime payments, commissions, sales awards, back pay including retroactive wage increases, and reimbursements for nondeductible moving expenses that are paid for the same or different period, or without regard to a particular period.
When any supplemental wages are paid subsequent to the payment of regular wages, the employer may determine the personal income tax to be withheld from supplemental wages paid by (1) using a flat percentage rate pursuant to subdivision (b) of Section 18663 of the Revenue and Taxation Code without allowance for exemptions and credits and without reference to any regular payment of wages, or (2) adding the supplemental wages to the regular wages paid the employee and computing the personal income tax to be withheld on the whole amount (the computed tax minus the tax withheld from the regular wages shall be withheld from the supplemental wages). Where supplemental wages are paid at the same time as regular wages, the personal income tax to be withheld shall be computed on the total of the supplemental and regular wages and shall be determined as if the total of the supplemental wages and the regular wages constituted a single wage payment for the regular payroll period.
For stock options and bonus payments that constitute wages paid on or after January 1, 2002, the employer may determine the personal income tax to be withheld from the stock options and bonus payments paid by either (1) using a flat percentage rate pursuant to subdivision (c) of Section 18663 of the Revenue and Taxation Code, without allowance for exemptions and credits and without reference to any regular payment of wages, or (2) adding the stock options and bonus payments to the regular wages paid the employee and computing the personal income tax to be withheld on the whole amount (the computed tax minus the tax withheld from the regular wages shall be withheld from the stock options and bonus payments). Where the stock options and bonus payments are paid at the same time as regular wages, the personal income tax to be withheld shall be computed on the total of the stock options and bonus payments and regular wages, and shall be determined as if the total of the stock options and bonus payments and the regular wages constituted a single wage payment for the regular payroll period.
CHAPTER 4. Reports, Returns, and Statements [13050. - 13059.]
Every employer or person required to deduct and withhold from an employee a tax under Section 986, 3260, or 13020, or who would have been required to deduct and withhold a tax under Section 13020 (determined without regard to Section 13025) if the employee had claimed no more than one withholding exemption, shall furnish to each employee in respect of the remuneration paid by the person to the employee during the calendar year, on or before January 31 of the succeeding year, or, if his or her employment is terminated before the close of the calendar year, on the day on which the last payment of remuneration is made, a written statement showing all of the following:
The name of the person.
The name of the employee, and his or her social security or identifying number if wages have been paid.
The total amount of wages subject to personal income tax, as defined by Section 13009.5.
The total amount deducted and withheld as tax under Section 13020.
The total amount of worker contributions paid by the employee pursuant to Section 986.
The total amount of worker contributions paid by the employee pursuant to Section 3260.
The total amount of elective deferrals (within the meaning of Section 402(g)(3) of the Internal Revenue Code) and compensation deferred pursuant to Section 457 of the Internal Revenue Code.
The statement required to be furnished pursuant to this section in respect of any remuneration shall be furnished at other times, shall contain other information, and shall be in a form, as the department may by authorized regulations prescribe.
If, during any calendar year, any person makes a payment of third-party sick pay to an employee, that person shall, on or before January 15 of the succeeding year, furnish a written statement to the employer in respect of whom the payment was made showing all of the following:
The name and, if there is withholding under this division, the social security number of that employee.
The total amount of the third-party sick pay paid to that employee during the calendar year.
The total amount, if any, deducted and withheld from that sick pay under this division. For purposes of the preceding sentence, the term “third-party sick pay” means any sick pay, as defined in subdivision (b) of Section 13028.6, which does not constitute wages for purposes of this division, determined without regard to subdivision (a) of Section 13028.6.
For purposes of Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, the statements required to be furnished by this subdivision shall be treated as statements required under this section to be furnished to employees.
Every employer who receives a statement under this subdivision with respect to sick pay paid to any employee during any calendar year shall, on or before January 31 of the succeeding year, furnish a written statement to that employee showing all of the information shown on the statement furnished under this subdivision.
The Franchise Tax Board shall be allowed access to the information filed with the department pursuant to this section.
Any person or employer required under Section 13050 to furnish a statement to an employee who furnishes a false or fraudulent statement, or who fails to furnish a statement in the manner, at the time, and showing the information required under Section 13050, or regulations prescribed thereunder, shall for each such failure, unless due to reasonable cause, pay a penalty of fifty dollars ($50). The penalty shall be assessed and collected in the same manner as the tax.
In addition to the penalty imposed by Section 19183 of the Revenue and Taxation Code (relating to failure to file information returns), if any person, or entity fails to report amounts paid as remuneration for personal services as required under Section 13050 of this code or Section 6041A of the Internal Revenue Code on the date prescribed thereof (determined with regard to any extension of time for filing), that person or entity may be liable for a penalty determined under subdivision (b).
For purposes of subdivision (a), the amount determined under this subdivision is the maximum rate under Section 17041 of the Revenue and Taxation Code multiplied by the unreported amounts paid as remuneration for personal services.
The penalty imposed by subdivision (a) shall be assessed against that person or entity required to file a return under Section 13050 of this code or Section 6041A of the Internal Revenue Code.
The penalty imposed under this section shall be in lieu of the penalty imposed under Section 19175 of the Revenue and Taxation Code. In the event that a penalty is imposed under both this section and Section 19175 of the Revenue and Taxation Code, only the penalty imposed under this section shall apply.
The penalty imposed by this section may be assessed in lieu of, or in addition to, the penalty imposed by Section 13052 with respect to the failure to furnish a withholding statement to an employee.
Every employee who, in the course of his or her employment by an employer, receives in any calendar month tips which are wages shall report all such tips in one or more written statements furnished to his or her employer on or before the 10th day following such month. Such statements shall be furnished by the employee under such authorized regulations, at such other times before such 10th day, and in such form and manner as may be prescribed by the department.
When required by authorized regulations prescribed by the department:
Any person or employer required under the authority of this division to make a return, report, statement, or other document shall include in the return, report, statement, or other document the identifying number as may be prescribed for securing proper identification of the person.
Any person with respect to whom a return, report, statement, or other document is required under the authority of this division to be made by another person shall furnish to the other person the identifying number as may be prescribed for securing his or her proper identification.
Any person or employer required under the authority of this division to make a return, report, statement, or other document with respect to another person shall request from the other person, and shall include in the return, report, statement, or other document, the identifying number as may be prescribed for securing proper identification of the other person.
Except as provided in paragraph (2), a return or report of any person with respect to his or her liability for tax, or any statement or other document in support thereof, shall not be considered for purposes of paragraphs (2) and (3) of subdivision (a) as a return, report, statement, or other document with respect to another person.
For purposes of paragraphs (2) and (3) of subdivision (a), a return or report of an estate or trust with respect to its liability for tax, and any statement or other document in support thereof, shall be considered as a return, report, statement, or other document with respect to each beneficiary of the estate or trust.
For purposes of this section, the department is authorized to require the information that may be necessary to assign an identifying number to any person.
If any person who is required by regulations prescribed under Section 13056 to provide a required identifying number fails without good cause to comply with that requirement at the time prescribed by the regulations, the person shall pay a penalty of five dollars ($5) for each failure:
To include his or her identifying number in any return, report, statement, or other document.
To furnish his or her identifying number to another person.
To include in any return, report, statement, or other document made with respect to another person the identifying number of the other person.
To furnish any other agency’s taxpayer identification number.
The penalty under this section shall be assessed and collected in the same manner as the tax.
Except as otherwise provided by the department, any return, report, statement, or other document required to be made under any provision of this division or authorized regulations shall contain, or be verified by, a written declaration that it is made under the penalty of perjury. The returns, reports, and all other returns, reports, statements, or other documents or copies thereof required by this division, shall be in the form as the department may from time to time prescribe, and shall be filed with the department. The department shall prepare blank forms for the returns, reports, declarations, statements, or other documents and shall distribute them throughout the state and furnish them upon application. Failure to receive or secure the form does not relieve any employer or person from making any return, report, statement, or other document required.
If the Governor declares a state of emergency, the director may extend the time requirements for filing returns, reports, and statements required by this chapter. The extension granted by the director pursuant to this section shall only apply to employers prevented by the conditions giving rise to the state of emergency from timely filing their returns, reports, and statements of wages or timely payment of the taxes due.
CHAPTER 5. Collections [13070. - 13077.]
The employer shall be liable for the payment of the tax required to be deducted and withheld under Section 13020, and shall not be liable to any person for the amount of such payment.
Whenever any employer or person has withheld any amount pursuant to this division, the amount so withheld shall be held to be a special fund in trust for the State of California.
If the employer, in violation of the provisions of this division, fails to deduct and withhold the tax under this division, and thereafter the tax against which the tax may be credited is paid or the taxpayer reports to the Franchise Tax Board the wages or gross income against which the tax would have been imposed, the tax so required to be deducted and withheld shall not be collected from the employer, but this section shall in no case relieve the employer from liability for any penalties or additions to the tax otherwise applicable with respect to the failure to deduct and withhold.
The department may by notice, served personally or by first-class mail, require any employer, person, officer or department of the state, political subdivision or agency of the state, including the Regents of the University of California, a city organized under a freeholders’ charter, or a political body not a subdivision or agency of the state, having in their possession, or under their control, any credits or other personal property or other things of value, belonging to a taxpayer or to an employer or person who has failed to withhold and transmit amounts due pursuant to Section 13070 or 13073 to withhold, from such credits or other personal property or other things of value, the amount of any tax, interest, or penalties due from the taxpayer or the amount of any liability incurred by such employer or person for failure to withhold and transmit amounts due from a taxpayer and to transmit the amount withheld to the department at such times as it may designate.
Any employer or person failing to withhold the amount due from any taxpayer and to transmit the same to the department after service of a notice pursuant to Section 13072 is liable for such amounts.
Any employer or person required to withhold and transmit any amount pursuant to this division shall comply with the requirement without resort to any legal or equitable action in a court of law or equity. Any employer or person paying to the department any amount required by it to be withheld is not liable therefor to the person from whom withheld unless the amount withheld is refunded to the withholding agent.
Whenever, under any provision of this division, service is authorized upon the state of any notice to withhold, unless expressly exempted from the provisions of this section, such service to be effective must, in addition to any other requirements, be made on the state agency owing the obligation prior to the time such agency presents the claim for payment thereof to the State Controller.
If the employer is the United States, or this state, or any political subdivision thereof, including the Regents of the University of California, a city organized under a freeholders’ charter, or any agency or instrumentality of any one or more of the foregoing, the return of the amount deducted and withheld upon any wages may be made by any officer or employee of the United States, or of such state, city organized under a freeholders’ charter, or political subdivision, or of such agency or instrumentality, as the case may be, having control of the payment of such wages, or appropriately designated for that purpose.
For purposes of Sections 13020 and 13070, if a lender, surety, or other person, who is not an employer under such sections with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of such employee or employees, such lender, surety, or other person shall be liable in his or her own person and estate to the State of California in a sum equal to the taxes (together with interest) required to be deducted and withheld from such wages by such employer.
If a lender, surety, or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of such employer, with actual notice or knowledge that such employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this part to be deducted and withheld by such employer from such wages, such lender, surety, or other person shall be liable in his or her own person and estate to the State of California in a sum equal to the taxes (together with interest) which are not paid over to the State of California by such employer with respect to such wages. However, the liability of such lender, surety, or other person shall be limited to an amount equal to 25 percent of the amount so supplied to or for the account of such employer for such purpose.
Any amounts paid to the State of California pursuant to this section shall be credited against the liability of the employer.
CHAPTER 6. Violations [13101. - 13101.]
In addition to any criminal penalty provided by law, if any individual makes a statement under Section 13040, 13041, or 13042 which results in a decrease in the amounts deducted and withheld under this division, and as of the time the statement was made, there was no reasonable basis for the statement, the individual shall pay a penalty of five hundred dollars ($500) for the statement.
The department may waive, in whole or in part, the penalty imposed under subdivision (a) if the taxes imposed with respect to the individual under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code for the taxable year are equal to or less than the sum of both of the following:
The credits against those taxes allowed by Sections 17052.1 through 17053.7 and Section 19002.
The payments of estimated tax which are considered payments on account of those taxes.
Article 11 (commencing with Section 1221) of Chapter 4 of Part 1, relating to administrative appellate review, shall not apply to the assessment or collection of any penalty imposed by subdivision (a).
This section shall apply to acts and failures to act after December 31, 1981.
DIVISION 7. CALIFORNIA WORKFORCE INNOVATION AND OPPORTUNITY ACT [14000. - 14531.]
CHAPTER 1. General Provisions [14000. - 14004.5.]
The Legislature finds and declares that, in order for California to remain prosperous and globally competitive, it needs to have a well-educated and highly skilled workforce.
The Legislature finds and declares that the following principles shall guide the state’s workforce investment system:
Workforce investment programs and services shall be responsive to the needs of employers, workers, and students by accomplishing the following:
Preparing California’s students and workers with the skills necessary to successfully compete in the global economy.
Producing greater numbers of individuals who obtain industry-recognized certificates and career-oriented degrees in competitive and emerging industry sectors and filling critical labor market skills gaps.
Adapting to rapidly changing local and regional labor markets as specific workforce skill requirements change over time.
Preparing workers for good-paying jobs that foster economic security and upward mobility.
Aligning employment programs, resources, and planning efforts regionally around industry sectors that drive regional employment to connect services and training directly to jobs.
State and local workforce development boards are encouraged to collaborate with other public and private institutions, including businesses, unions, nonprofit organizations, kindergarten and grades 1 to 12, inclusive, career technical education programs, adult career technical education and basic skills programs, apprenticeships, community college career technical education and basic skills programs, entrepreneurship training programs, where appropriate, the California Community Colleges Economic and Workforce Development Program, the Employment Training Panel, and county-based social and employment services, to better align resources across workforce, training, education, and social service delivery systems and build a well-articulated workforce investment system by accomplishing the following:
Adopting local and regional training and education strategies which include workplace-based earn and learn programs that build on the strengths and fill the gaps in the education and workforce development pipeline in order to address the needs of job seekers, workers, and employers within regional labor markets by supporting sector strategies.
Leveraging resources across education and workforce training delivery systems to build career pathways and fill critical skills gaps.
Workforce investment programs and services shall be data driven and evidence based when setting priorities, investing resources, and adopting practices.
Workforce investment programs and services shall develop strong partnerships with the private sector, ensuring industry involvement in needs assessment, planning, and program evaluation.
Workforce investment programs and services shall encourage industry involvement by developing strong partnerships with an industry’s employers and the unions that represent the industry’s workers.
Workforce investment programs and services may consider the needs of employers and businesses of all sizes, including large, medium, small, and microenterprises, when setting priorities, investing resources, and adopting practices.
Workforce investment programs and services shall be outcome oriented and accountable, measuring results for program participants, including, but not limited to, outcomes related to program completion, employment, and earnings.
Programs and services shall be accessible to employers, the self-employed, workers, and students who may benefit from their operation, including individuals with employment barriers, such as persons with economic, physical, or other barriers to employment.
The Legislature finds and declares that screening designed to detect unidentified disabilities, including learning disabilities, improves workforce preparation and enhances the use of employment and training resources.
Section 134(c)(2) of the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3174(c)(2)) allows for the use of funds for initial assessment of skill levels, aptitudes, abilities, and support services, including, when appropriate, comprehensive and specialized assessments of skill levels and service needs, including, but not limited to, diagnostic testing and the use of other assessment tools and in-depth interviewing and evaluation to identify employment barriers and appropriate employment goals.
The Legislature encourages one-stop career centers to maximize the use of Workforce Innovation and Opportunity Act resources and other federal and state workforce development resources for screening designed to detect unidentified disabilities, and if indicated, appropriate diagnostic assessment.
Grants or contracts awarded under the federal Workforce Innovation and Opportunity Act, codified in Chapter 32 (commencing with Section 3101) of Title 29 of the United States Code, or any other state or federally funded workforce development program, may not be awarded to organizations that are owned or operated as pervasively sectarian organizations.
Grants or contracts awarded under the federal Workforce Innovation and Opportunity Act, codified in Chapter 32 (commencing with Section 3101) of Title 29 of the United States Code, or any other state or federally funded workforce development program, shall comply with Section 4 of Article I and Section 5 of Article XVI of the California Constitution, state and federal civil rights laws, and the First Amendment to the United States Constitution in regard to pervasively sectarian organizations. These legal constraints include prohibitions on the discrimination against beneficiaries and staff based on protected categories and on the promoting of religious doctrine to advance sectarian beliefs.
To be eligible for state or federal workforce development funds awarded by the state under the California Community and Faith Based Initiative, an organization must be a separate nonprofit entity or affiliate that is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code.
The Consolidated Work Program Fund is hereby created in the State Treasury, for the receipt of all moneys deposited pursuant to the federal Workforce Innovation and Opportunity Act. The Employment Development Department shall be the entity responsible for administering this section. Moneys in the fund shall be made available, upon appropriation by the Legislature, to the department, for expenditure consistent with the purposes of the federal Workforce Innovation and Opportunity Act and the State Plan required by the federal Workforce Innovation and Opportunity Act.
CHAPTER 2. Definitions and Severability [14005. - 14007.]
For purposes of this division:
“Board” means the California Workforce Development Board.
“Agency” means the Labor and Workforce Development Agency.
“Career pathways,” “career ladders,” or “career lattices” are an identified series of positions, work experiences, or educational benchmarks or credentials with multiple access points that offer occupational and financial advancement within a specified career field or related fields over time. “Career pathways,” “career ladders,” and “career lattices” offer combined programs of rigorous and high-quality education, training, and other services that do all of the following:
Align with the skill needs of industries in the economy of the state or regional economy involved.
Prepare an individual to be successful in any of a full range of secondary or postsecondary education options, including apprenticeships registered under the National Apprenticeship Act of 1937 (29 U.S.C. Sec. 50 et seq.), except as in Section 3226 of Title 29 of the United States Code.
Include counseling to support an individual in achieving the individual’s education and career goals.
Include, as appropriate, education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster.
Organize education, training, and other services to meet the particular needs of an individual in a manner that accelerates the educational and career advancement of the individual to the extent practicable.
Enable an individual to attain a secondary school diploma or its recognized equivalent, and at least one recognized postsecondary credential.
Help an individual enter or advance within a specific occupation or occupational cluster.
“Cluster-based sector strategies” mean methods of focusing workforce and economic development on those sectors that have demonstrated a capacity for economic growth and job creation in a particular geographic area.
“Data driven” means a process of making decisions about investments and policies based on systematic analysis of data, which may include data pertaining to labor markets.
“Economic security” means, with respect to a worker, earning a wage sufficient to support a family adequately, and, over time, to save for emergency expenses and adequate retirement income, based on factors such as household size, the cost of living in the worker’s community, and other factors that may vary by region.
“Evidence-based” means making use of policy research as a basis for determining best policy practices. Evidence-based policymakers adopt policies that research has shown to produce positive outcomes, in a variety of settings, for a variety of populations over time. Successful, evidence-based programs deliver quantifiable and sustainable results. Evidence-based practices differ from approaches that are based on tradition, belief, convention, or anecdotal evidence.
“High-priority occupations” mean occupations that have a significant presence in a targeted industry sector or industry cluster, are in demand, or projected to be in demand, by employers, and pay or lead to payment of a wage that provides economic security.
“In-demand industry sector or occupation” means either of the following:
An industry sector that has a substantial current or potential impact, including through jobs that lead to economic self-sufficiency and opportunities for advancement, on the state, regional, or local economy, as appropriate, and that contributes to the growth or stability of other supporting businesses, or the growth of other industry sectors.
An occupation that currently has or is projected to have a number of positions, including positions that lead to economic self-sufficiency and opportunities for advancement, in an industry sector so as to have a significant impact on the state, regional, or local economy, as appropriate.
The determination of whether an industry sector or occupation is “in-demand” under this subdivision shall be made by the board or local board, or through the regional planning process in which local boards participate under the Workforce Innovation and Opportunity Act, as appropriate, using state and regional business and labor market projections, including the use of labor market information.
“Individual with employment barriers” means an individual with any characteristic that substantially limits an individual’s ability to obtain employment, including indicators of poor work history, lack of work experience, or access to employment in nontraditional occupations, long-term unemployment, lack of educational or occupational skills attainment, dislocation from high-wage and high-benefit employment, low levels of literacy or English proficiency, disability status, or welfare dependency, including members of all of the following groups:
Displaced homemakers.
Low-income individuals.
Indians, Alaska Natives, and Native Hawaiians, as those terms are defined in Section 3221 of Title 29 of the United States Code.
Individuals with disabilities, including youths who are individuals with disabilities.
Older individuals.
Ex-offenders.
Homeless individuals, as defined in Section 14043e-2(6) of Title 42 of the United States Code, or homeless children and youths, as defined in Section 11434a(2) of Title 42 of the United States Code.
Youth who are in, or have aged out of, the foster care system.
Individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers.
Eligible migrant and seasonal farmworkers, as defined in Section 3322(i) of Title 29 of the United States Code.
Individuals within two years of exhausting lifetime eligibility under Part A of Title IV of the Social Security Act (42 U.S.C. Sec. 601 et seq.).
Single parents, including single, pregnant women.
Long-term unemployed individuals.
Transgender and gender nonconforming individuals.
Any other groups as the Governor determines to have barriers to employment.
“Industry cluster” means a geographic concentration or emerging concentration of interdependent industries with direct service, supplier, and research relationships, or independent industries that share common resources in a given regional economy or labor market. An industry cluster is a group of employers closely linked by common product or services, workforce needs, similar technologies, and supply chains in a given regional economy or labor market.
“Industry or sector partnership” means a workforce collaborative, convened or acting in partnership with the board or a local board, that does the following:
Organizes key stakeholders in an industry cluster into a working group that focuses on the shared goals and human resources needs of the industry cluster and that includes, at the appropriate stages of development of the partnership:
Representatives of multiple businesses or other employers in the industry cluster, including small and medium-sized employers when practicable.
One or more representatives of a recognized state labor organization or central labor council, or another labor representative, as appropriate.
One or more representatives of an institution of higher education with, or another provider of, education or training programs that support the industry cluster.
The workforce collaborative may include representatives of any of the following:
State or local government.
State or local economic development agencies.
State boards or local boards, as appropriate.
A state workforce agency or entity providing employment services.
Other state or local agencies.
Business or trade associations.
Economic development organizations.
Nonprofit organizations, community-based organizations, or intermediaries.
Philanthropic associations.
Industry associations.
Other organizations, as determined to be necessary by the members comprising the industry sector or partnership.
“Industry sector” means those firms that produce similar products or provide similar services using somewhat similar business processes, and are closely linked by workforce needs, within a regional labor market.
“Local labor federation” means a central labor council that is an organization of local unions affiliated with the California Labor Federation or a local building and construction trades council affiliated with the State Building and Construction Trades Council of California.
“Sector strategies” means methods of prioritizing investments in competitive and emerging industry sectors and industry clusters on the basis of labor market and other economic data indicating strategic growth potential, especially with regard to jobs and income, and exhibit the following characteristics:
Focus workforce investment in education and workforce training programs that are likely to lead to jobs providing economic security or to an entry-level job with a well-articulated career pathway into a job providing economic security.
Effectively boost labor productivity or reduce business barriers to growth and expansion stemming from workforce supply problems, including skills gaps and occupational shortages by directing resources and making investments to plug skills gaps and provide education and training programs for high-priority occupations.
May be implemented using articulated career pathways or lattices and a system of stackable credentials.
May target underserved communities, disconnected youths, incumbent workers, and recently separated military veterans.
Frequently are implemented using industry or sector partnerships.
Typically are implemented at the regional level where sector firms, those employers described in subdivisions (j) and (l), often share a common labor market and supply chains. However, sector strategies may also be implemented at the state or local level depending on sector needs and labor market conditions.
“Workforce Innovation and Opportunity Act of 2014” means the federal act enacted as Public Law 113-128.
“Earn and learn” includes, but is not limited to, a program that does either of the following:
Combines applied learning in a workplace setting with compensation allowing workers or students to gain work experience and secure a wage as they develop skills and competencies directly relevant to the occupation or career for which they are preparing.
Brings together classroom instruction with on-the-job training to combine both formal instruction and actual paid work experience.
“Earn and learn” programs include, but are not limited to, all of the following:
Apprenticeships.
Preapprenticeships.
Incumbent worker training.
Transitional jobs, as described in paragraph (5) of subsection (d) of Section 3174 of Title 29 of the United States Code, as that section read on January 1, 2021, and subsidized employment with an employer of record, which may include, but not be limited to, an employment social enterprise or a worker cooperative, particularly for individuals with barriers to employment.
Paid internships and externships.
Project-based compensated learning.
“High road” means a set of economic and workforce development strategies to achieve economic growth, economic equity, shared prosperity and a clean environment. The strategies include, but are not limited to, interventions that:
Improve job quality and job access, including for women and people from underserved and underrepresented populations.
Meet the skill and profitability needs of employers.
Meet the economic, social, and environmental needs of the community.
“High road training partnership” means an initiative or project that models strategies for developing industry-based, worker-focused training partnerships, including labor-management partnerships. High Road Training partnerships operate via regional, industry- or sector-based training partnerships comprised of employers, workers, and their representatives including organized labor, community-based organizations, education, training, and social services providers, and labor market intermediaries. High Road Training partnerships demonstrate job quality standards and employment practices that include, but are not limited to, the following:
Provision of comparatively good wages and benefits, relative to the industry, occupation, and labor market in which participating workers are employed.
Payment of workers at or above local or regional living wage standards as well as payment at or above regional prevailing wage standards where such standards exist for the occupations in question.
A history of investment in employee training, growth, and development.
Provision of opportunities for career advancement and wage growth.
Safe and healthy working conditions.
Consistent compliance with workplace laws and regulations, including proactive efforts to remedy past problems.
Adoption of mechanisms to include worker voice and agency in the workplace.
“High road construction careers” are high road training partnerships that invest in regional training partnerships comprised of local building trades councils, workforce, community, and education interests that connect to state-approved apprenticeship programs, that utilize the standard Multi-Craft Core preapprenticeship training curriculum and provide a range of supportive services and career placement assistance to women and people from underserved and underrepresented populations.
“Career advancement” means demonstrated progression along a career ladder as evidenced by both wage growth and occupational advancement.
“Employment social enterprise” means a nonprofit or for-profit organization that meets all of the following requirements:
Is organized as a social purpose corporation or a benefit corporation, or as an organization incorporated within a larger organization.
Demonstrates evidence of a mission to provide and to access employment and social supports with on-the-job and life skills training to a direct labor force comprised of individuals with a “barrier to employment,” as that phrase is defined in Section 3102 of Title 29 of the United States Code, as that section read on January 1, 2021.
Is evidence-based and utilizes data-driven policies in implementing procedures and measuring outcomes.
Produces or assembles goods or provides services, or a combination of both.
“Worker cooperative” has the same meaning as defined in Section 12253.5 of the Corporations Code.
The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
Each provision of this division shall remain in effect unless the United States Secretary of Labor determines that any provision of this division or its application is not in conformity with the requirements of federal law, at which time only those provisions of this division that are not in conformity with federal law shall be repealed.
CHAPTER 3. State Responsibilities [14010. - 14121.]
ARTICLE 1. California Workforce Development Board [14010. - 14017.2.]
The California Workforce Development Board is the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce.
The board shall report, through its executive director, to the Secretary of the Labor and Workforce Development Agency.
The board shall be appointed by the Governor to assist in the development of the State Plan and to carry out other functions, as described in Section 14103. The board shall be comprised of the Governor and representatives from the following categories:
Two members of each house of the Legislature, appointed by the appropriate presiding officer of each house.
A majority of board members shall be representatives of business who:
Are owners of businesses, chief executives or operating officers of businesses, and other business executives or employers with optimum policymaking or hiring authority, who, in addition, may be members of a local board described in Section 3122(b)(2)(A)(i) of Title 29 of the United States Code.
Represent businesses, including small businesses, or organizations representing businesses that include high-quality, work-relevant training and development in in-demand industry sectors or occupations in the state.
Are appointed from a group of individuals nominated by state business organizations and business trade associations.
Representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment, including organizations that serve veterans, organizations that provide or support competitive, integrated employment for individuals with disabilities, organizations that serve transgender and gender nonconforming individuals, and organizations that represent or serve older adults.
Representatives of organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of eligible youth, including representatives of organizations that serve out-of-school youth.
The balance of board members:
Individuals who represent an Indian tribe or tribal organization, as those terms are defined in Section 3221(b) of Title 29 of the United States Code.
State agency officials responsible for education programs in the state, including chief executive officers, or their designees, of institutions of higher education, including, but not limited to, the California Community College system, the California State University system, the University of California system, and their respective individual campuses.
State agency officials responsible for administering programs that serve, and state commission officials that advocate on behalf of, older adults or their designees.
Other requirements of board membership shall include:
The Governor shall select a chairperson for the board from among the representatives described in subdivision (b).
The members of the board shall represent diverse geographic areas of the state, including urban, rural, and suburban areas.
For purposes of this section, “older adults” means persons 60 years of age or older.
The board shall assist the Governor in the following:
Promoting the development of a well-educated and highly skilled 21st century workforce, and the development of a high road economy that offers an educated and skilled workforce with fair compensation and treatment in the workplace.
Developing, implementing, and modifying the State Plan. The State Plan shall serve as the comprehensive framework and coordinated plan for the aligned investment of all federal and state workforce training and employment services funding streams and programs. To the extent feasible and when appropriate, the State Plan should reinforce and work with adult education and career technical education efforts that are responsive to labor market trends, as well as economic trends that impact the labor market and workforce, including, but not limited to, climate change, automation of work, and employment.
The review and technical assistance of statewide policies, of statewide programs, and of recommendations on actions that should be taken by the state to align workforce, education, training, and employment funding programs in the state in a manner that supports a comprehensive, high-quality, and streamlined workforce development system in the state, including the review and provision of comments on the State Plan, if any, for programs and activities of one-stop partners that are not core programs.
Developing and continuously improving the statewide workforce investment system, including:
The identification of barriers and means for removing barriers to better coordinate, align, and avoid duplication among the programs and activities carried out through the system.
The development, promotion, and implementation of strategies, as well as the administration of, an field assistance for, programs to advance the use of career pathways for the purpose of providing individuals, including low-skilled adults, youth, and individuals with barriers to employment, and including individuals with disabilities, with workforce investment activities, education, and supportive services to enter or retain high-quality employment. To the extent permissible under state and federal laws, these policies and strategies should support linkages between kindergarten and grades 1 to 12, inclusive, and community college educational systems in order to help secure educational and career advancement. These policies and strategies may be implemented using a sector strategies framework and should ultimately lead to placement in a job providing economic security or job placement in an entry-level job that has a well-articulated career pathway or career ladder to a job providing economic security.
The development, promotion, and implementation of strategies for providing effective outreach to and improved access for individuals and employers who could benefit from services provided through the workforce development system.
The development, promotion, and implementation of strategies, as well as the administration of, and field assistance for, programs that meet the needs of employers, workers, and jobseekers, particularly through industry or sector partnerships related to in-demand industry sectors and occupations, including policies targeting resources to competitive and emerging industry sectors and industry clusters that provide economic security and are either high-growth sectors or critical to California’s economy, or both. These industry sectors and clusters shall have significant economic impacts on the state and its regional and workforce development needs, including, but not limited to, California’s transition to a carbon neutral economy, and have documented career opportunities.
Consistent with the definitions in Section 14005, developing standards, procedures, and criteria for defining high road employers, high road jobs, high road workforce development, and high road training partnerships in California, in accordance with lessons learned from the board’s ongoing high road workforce development initiatives.
The administration, promotion, and expansions of, as well as field assistance for, high road training partnerships, as defined in Section 14005.
The administration, promotion, and expansion of, as well as field assistance for, high road construction careers, as defined in Section 14005.
Recommending adult and dislocated worker training policies and investments that offer a variety of career opportunities while upgrading the skills of California’s workforce. These may include training policies and investments pertaining to any of the following:
Occupational skills training, including training for nontraditional employment.
On-the-job training.
Incumbent worker training in accordance with Section 3174(d)(4) of Title 29 of the United States Code.
Programs that combine workplace training with related instruction, which may include cooperative education programs.
Training programs operated by the private sector.
Skill upgrading and retraining.
Entrepreneurial training.
Transitional jobs in accordance with Section 3174(d)(5) of Title 29 of the United States Code.
Job readiness training provided in combination with any of the services described in subparagraphs (A) to (H), inclusive.
Adult education and literacy activities provided in combination with any of the services described in subparagraphs (A) to (G), inclusive.
Customized training conducted with a commitment by an employer or group of employers to employ an individual upon successful completion of the training.
The identification of regions, including planning regions, for the purposes of Section 3121(a) of Title 29 of the United States Code, and the designation of local areas under Section 3121 of Title 29 of the United States Code, after consultation with local boards and chief elected officials.
The development and continuous improvement of the one-stop delivery system in local areas, including providing assistance to local boards, one-stop operators, one-stop partners, and providers with planning and delivering services, including training services and supportive services, to support effective delivery of services to workers, job seekers, and employers.
Recommending strategies to the Governor for strategic training investments of the Governor’s 15-percent discretionary funds.
Developing strategies to support staff training and awareness across programs supported under the workforce development system.
The development and updating of comprehensive state performance accountability measures, including state-adjusted levels of performance, to assess the effectiveness of the core programs in the state as required under Section 3141(b) of Title 29 of the United States Code. As part of this process the board shall do all of the following:
Develop a workforce metrics dashboard, to be updated annually, that measures the state’s human capital investments in workforce development to better understand the collective impact of these investments on the labor market. The board shall determine the approach for measuring labor market impacts, provided that, to the extent feasible, the board uses statistically rigorous methodologies to estimate, assess, and isolate the impact of programs on participant outcomes. The workforce metrics dashboard shall be produced, to the extent feasible, using existing available data and resources that are currently collected and accessible to state agencies. The board shall convene workforce program partners to develop a standardized set of inputs and outputs for the workforce metrics dashboard. The workforce metrics dashboard shall do all of the following:
Provide a status report on credential attainment, training completion, degree attainment, and participant earnings from workforce education and training programs. The board shall publish and distribute the final report.
Provide demographic breakdowns, including, to the extent possible, race, ethnicity, age, gender, veteran status, wage and credential or degree outcomes, and information on workforce outcomes in different industry sectors.
Measure, at a minimum and to the extent feasible with existing resources, the performance of the following workforce programs: community college career technical education, the Employment Training Panel, Title I and Title II of the federal Workforce Investment Act of 1998 (Public Law 105-220), Title I and Title II of the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128), Trade Adjustment Assistance, and state apprenticeship programs.
Measure participant earnings in California, and to the extent feasible, in other states. The Employment Development Department shall assist the board by calculating aggregated participant earnings using unemployment insurance wage records, without violating any applicable confidentiality requirements.
The State Department of Education is hereby authorized to collect the social security numbers of adults participating in adult education programs so that accurate participation in those programs can be represented in the workforce metrics dashboard. However, an individual shall not be denied program participation if the individual refuses to provide a social security number. The State Department of Education shall keep this information confidential, except, the State Department of Education is authorized to share this information, unless prohibited by federal law, with the Employment Development Department, the board, or the board’s designee, who shall keep the information confidential and use it only to track the labor market and other outcomes described in subparagraph (A) of paragraph (1) of program participants in compliance with all applicable state and federal laws and mandates, including all performance reporting requirements under the Workforce Innovation and Opportunity Act.
Participating workforce programs, including, but not limited to, those specified in subparagraph (C) of paragraph (1), shall provide participant data in a standardized format to the Employment Development Department, the board, or the board’s designee.
The Employment Development Department, the board, or the board’s designee, shall aggregate data provided by participating workforce programs and shall report the data, organized by demographics, earnings, and industry of employment, to the board to assist the board in producing the annual workforce metrics dashboard.
The board shall ensure that a designee has the technical and operational capability of meeting appropriate privacy and security requirements.
The identification and dissemination of information on best practices, including best practices for all of the following:
The effective operation of one-stop centers, relating to the use of business outreach, partnerships, and service delivery strategies, including strategies for serving individuals with barriers to employment.
The development of effective local boards, which may include information on factors that contribute to enabling local boards to exceed negotiated local levels of performance, sustain fiscal integrity, and achieve other measures of effectiveness.
Effective training programs that respond to real-time labor market analysis, that effectively use direct assessment and prior learning assessment to measure an individual’s prior knowledge, skills, competencies, and experiences, and that evaluate such skills, and competencies for adaptability, to support efficient placement into employment or career pathways.
The development and review of statewide policies affecting the coordinated provision of services through the state’s one-stop delivery system described in Section 3151(e) of Title 29 of the United States Code, including the development of all of the following:
Objective criteria and procedures for use by local boards in assessing the effectiveness and continuous improvement of one-stop centers described in Section 3151(e) of Title 29 of the United States Code.
Guidance for the allocation of one-stop center infrastructure funds under Section 3151(h) of Title 29 of the United States Code.
Policies relating to the appropriate roles and contributions of entities carrying out one-stop partner programs within the one-stop delivery system, including approaches to facilitating equitable and efficient cost allocation in such a system.
The development of strategies for technological improvements to facilitate access to, and improve the quality of, services and activities provided through the one-stop delivery system, including such improvements to all of the following:
Ensure the technology is accessible to individuals with disabilities and individuals residing in remote areas.
The development of strategies for aligning technology and data systems across one-stop partner programs to enhance service delivery and improve efficiencies in reporting on performance accountability measures, including the design and implementation of common intake, data collection, case management information, and performance accountability measurement and reporting processes and the incorporation of local input into such design and implementation, to improve coordination of services across one-stop partner programs.
The development of allocation formulas for the distribution of funds for employment and training activities for adults, and youth workforce investment activities, to local areas as permitted under Sections 3163(b)(3) and 3173(b)(3) of Title 29 of the United States Code.
The preparation of the annual reports described in paragraphs (1) and (2) of Section 3141(d) of Title 29 of the United States Code.
The development of the statewide workforce and labor market information system described in Section 49l–2(e) of Title 29 of the United States Code.
By July 1, 2020, the development, in conjunction with the Employment Development Department and with input from local workforce development boards, of a policy regarding mutual aid agreements between and among local workforce development boards to enable them to effectively respond to disasters and that is consistent with applicable state and federal law.
The development of other policies as may promote statewide objectives for, and enhance the performance of, the workforce development system in the state.
Helping individuals with barriers to employment, including low-skill, low-wage workers, the long-term unemployed, and members of single-parent households, achieve economic security and upward mobility by implementing policies that encourage the attainment of marketable skills relevant to current labor market trends.
Evaluating program outcomes, including program participant outcomes for all grant programs administered by the California Workforce Development Board, regardless of funding source.
The California Workforce Development Board shall produce and submit a report to the Legislature, in compliance with Section 9795 of the Government Code, evaluating its grant programs by October 1 of every odd-numbered year. The evaluation report shall include both quantitative and qualitative analyses of any grant programs established on or after July 1, 2025, for which the board administers funding, as well as the following existing programs:
High road workforce programs, as described in Section 14014.
The Breaking Barriers to Employment Initiative, as specified in Article 3 (commencing with Section 14030).
The Prison to Employment program, as specified in Article 4 (commencing with Section 14040).
Preapprenticeship training programs utilized by public agencies receiving funding from the Road Maintenance and Rehabilitation Account, as described in Section 2038 of the Streets and Highways Code.
Consistent with the intent of paragraph (3) of subdivision (b) of Section 14000, the California Workforce Development Board shall collect and report program and outcome data for its high road workforce programs.
Pursuant to subdivision (a), all of the following shall apply:
The Employment Development Department shall make available to the board any and all wage and employment data necessary to evaluate all relevant high road programs and grants.
All grant applicants and program beneficiaries participating in a high road training partnership program shall provide any and all necessary information to the state to facilitate public transparency, accountability, and grant and program performance evaluation, including any relevant data needed to determine the outcomes and benefits of programing and grants funded for program participants, high road training partnerships, industry, and the workforce system.
All high road grants and programming shall be evaluated using criteria, metrics, and data that include, but are not limited to, information pertaining to the ability of grantees and program administrators to conduct and complete relevant programming as demonstrated through appropriate quantitative and qualitative analysis, including the use of appropriate outcome metrics.
For funds and grants providing direct high road workforce, training, and education services to individuals, the board shall report all of the following:
Who is receiving the services, including data on the demographics of the individuals receiving services.
The nature of the services received collected at the individual level.
Data pertaining to participant program and employment outcomes of individuals receiving services including:
The employment rates of individuals served to measure initial job placement and retention over time.
The wages and wage growth of individuals served during and after program participation.
Recognizing that the outcome data specified in this section frequently lags program implementation activities, a quantitative report consistent with the requirements of this section shall be provided to the Legislature by the board, after it receives and administers funding under the relevant budget allocations, by October 1 of even-numbered years utilizing whatever program participant and outcome data is available. The report shall also include, but not be limited to, the number of grants awarded, the average award amounts, geographic distribution of awards, and types of industries awarded.
Evaluation reports for all high road grants and programs as required by subdivision (t) of Section 14013 shall be provided to the Legislature after all available labor market outcome data specified in this section becomes available on the timeline prescribed in subdivision (t) of Section 14013.
Members of the board may receive up to one hundred dollars ($100) for each day’s actual attendance at meetings and other official business of the board, not to exceed three hundred dollars ($300) per month, and shall receive their necessary and actual expenses incurred in the performance of their official duties.
In efforts to expand job training and employment for allied health professions, the California Workforce Development Board, in consultation with the Division of Apprenticeship Standards, shall do the following:
Identify opportunities for “earn and learn” job training opportunities that meet the industry’s workforce demands and that are in high road, high-demand jobs.
Identify and develop specific requirements and qualifications for entry into “earn and learn” job training models.
Establish standards for “earn and learn” job training programs that are outcome oriented and accountable. The standards shall measure the results from program participation, including a measurement of how many complete the program with an industry-recognized credential that certifies that the individual is ready to enter the specific allied health profession for which the individual has been trained.
Develop means to identify, assess, and prepare a pool of qualified candidates seeking to enter “earn and learn” job training models.
The board, on or before December 1, 2015, shall prepare and submit to the appropriate policy committees of the Legislature a report on the findings and recommendations of the board.
The requirement for submitting a report imposed pursuant to this subdivision is inoperative on January 1, 2019, pursuant to Section 10231.5 of the Government Code.
The department convening allied health workforce stakeholders, which shall include, but are not limited to, the department’s relevant licensure boards, the Division of Apprenticeship Standards, representatives appointed by the board of governors from the California community college system, the California Workforce Development Board, and the State Department of Public Health, and which may include other relevant entities such as the Office of Statewide Health Planning and Development, employer and worker representatives, and community-based organizations.
Addressing issues that include, but are not limited to, prelicensure classifications in allied health occupations that would allow students, in a supervised setting, to gain experience in their chosen field before obtaining licensure, and the payment of wages while in a workplace-based training program.
The department ensuring that existing standards of consumer protection are maintained.
Sharing any statutory barriers identified through this process with the relevant committees of the Legislature.
To ensure that job training services investments are linked to regional labor market demand and provide opportunities for upward mobility, the board and the Employment Development Department shall work collaboratively to measure and report on training-related job placement outcomes for individuals receiving job training services provided through the workforce system, including all job training services funded by Title I of the federal Workforce Innovation and Opportunity Act (Pub. L. 113-128) and through grants administered by the board, regardless of the source of the moneys.
For purposes of measuring training-related job placement outcomes, gathering data to report, and otherwise fulfilling subdivision (a), the board and the Employment Development Department shall work collaboratively to create a plan to use the existing unemployment insurance tax data collection infrastructure used to secure quarterly wage data from employers, to match relevant employee occupational data, employee place of employment data, and employee hours worked data, to persons who enroll in job training services. The plan shall include timelines, budget, funding constraints, and an outline of any additional recommended or necessary statutory changes to collect relevant data. The plan shall also outline the means for all of the following:
Requiring local workforce development boards and grantees of board-administered grants to collect and report industry and occupation-specific data for all persons who enroll in job training services, including through the use of case management and performance reporting systems deployed for state and federal data collection and reporting.
Developing and implementing a method to measure the second- and fourth-quarter prior earnings of a person, who is enrolled in a job training service, for purposes of measuring the person’s increase in earnings following their participation in and exit from a program.
Developing and implementing a means to measure wage and employment outcomes for a person following that person’s participation in a job training service during the second, fourth, eighth, and twelfth quarters following participation in and exit from a program for purposes of measuring the person’s increase in earnings over time.
Calculating, by region, industry, occupation, and job training service provider, the wages, wage gains, employment rates, and training-related job placement rates at the second, fourth, eighth, and twelfth quarters following a person’s participation in and exit from a program.
Calculating, by region, industry, occupation, and job training service provider, the rate of persons who participated in a job training service and who became employed at a wage at or above a living wage for the region. This calculation shall take into account the cost of living in the regional labor market where the person works or lives. The employment rate calculation shall be calculated at the second, fourth, eighth, and twelfth quarters following a person’s participation in and exit from a program.
Calculating program completion, credential attainment, and measurable skills gains rates by job training service provider, industry, occupation, and region.
Determining, by region, industry, occupation, and job training service provider, whether participation in a job training service, completion of a job training service, credential attainment, and measurable skills gains have an empirically verifiable impact on assisting persons in achieving employment, training-related job placement, wages, and wage gain that places those persons at or above a living wage for the region. This determination shall take into account the cost of living in the regional labor market where the person works or lives.
Developing and implementing a means of working with the local workforce development boards to notify, prior to their enrollment in a job training service, a person seeking to enroll in those services of the board’s and Employment Development Department’s findings on the efficacy of those services, particularly with respect to the likelihood of training related job placement, the likelihood of job placement at or above a regional living wage, and the likelihood of wage gains at the second, fourth, eighth, and twelfth quarters following a person’s participation in and exit from a program. Those findings shall be disaggregated by region, job training services provider, industry, and occupation.
The board and the Employment Development Department shall, in compliance with Section 9795 of the Government Code, submit the plan to the Legislature no later than January 1, 2024.
For purposes of this section, both of the following definitions shall apply:
The California Workforce Development Board shall allocate the funds appropriated to the board pursuant to paragraph (4) of subdivision (b) of Section 19.56 of the Budget Act of 2025, as amended by Assembly Bill 102 of the 2025–26 Regular Session, to the Los Angeles County Department of Economic Opportunity for workforce development strategies, such as education, high-road training partnerships, and other job training programs, preapprenticeships, transitional jobs, or supportive services, including stipends, for underemployed and unemployed low- to moderate-income individuals to ensure a skilled and sufficient workforce for the scale of rebuilding and recovery of areas in the Counties of Los Angeles and Ventura impacted by the 2025 wildfires and to support underemployed and unemployed low- to moderate-income workers affected by the fires. This also includes rapid response and layoff aversion, recruitment services, financial incentives, and customized training opportunities for businesses impacted by the fires and those hiring impacted workers as part of the rebuild and recovery. The funds are also for new or expanded job and business centers and operations near the fire zones to ensure close proximity of programs and services for dislocated and impacted workers and businesses.
The Los Angeles County Department of Economic Opportunity shall reallocate six hundred thousand dollars ($600,000) to the Economic Development Collaborative to be used for the purposes specified in this section.
Notwithstanding subdivision (a), the California Workforce Development Board may use up to 5 percent of the total allocation for state administration.
The California Workforce Development Board shall allow the Los Angeles County Department of Economic Opportunity to subcontract with other entities to fulfill the provisions and intent of subdivision (a).
The California Workforce Development Board shall require quality standards and practices, as defined in subdivisions (s) and (t) of Section 14005.
In developing and implementing workforce development strategies funded pursuant to this section, the Los Angeles County Department of Economic Opportunity shall focus on employment in public and private sector jobs in construction, utilities, firefighting, health care, social services, education, childcare, housing, and shelter assistance, or other areas essential to emergency response, disaster relief, recovery, rebuilding, and regional economic development and resilience.
To ensure there is a direct pipeline into the workforce, individuals participating in workforce programs funded pursuant to this section shall have access to expedited licensing and certification, if feasible.
ARTICLE 2. State Planning and Sectors [14020. - 14020.]
The California Workforce Development Board, in collaboration with state and local partners, including the Chancellor of the California Community Colleges, the State Department of Education, other appropriate state agencies, and local workforce development boards, shall develop the State Plan to serve as a framework for the development of public policy, employment services, fiscal investment, and operation of all state labor exchange, workforce education, and training programs to address the state’s economic, demographic, and workforce needs. The strategic workforce plan shall be prepared in a manner consistent with the requirements of the federal Workforce Innovation and Opportunity Act of 2014.
Consistent with the federal Workforce Innovation and Opportunity Act, the State Plan shall provide a framework for state workforce policies and support sector strategies.
The California Workforce Development Board shall work collaboratively with state and local partners to identify ways to eliminate systemwide barriers and better align and leverage federal, state, and local Workforce Innovation and Opportunity Act funding streams, and other funding streams, and policies to develop, support, and sustain regional alliances of employers and workforce and education professionals who are working to improve the educational pipeline, establish well-articulated career pathways, provide industry-recognized credentials, certificates, and recognized postsecondary credentials, and address the career advancement needs of current and future workers in competitive and emergent industry sectors and clusters. The California Workforce Development Board and its partners shall work collaboratively to maximize state and local investments and pursue other resources to address the skills-gap needs identified pursuant to paragraph (3) of subdivision (d).
In order to support the requirement of the plans in subdivision (a), the California Workforce Development Board shall do the following:
Identify industry sectors and industry clusters that have a competitive economic advantage and demonstrated economic importance to the state and its regional economies. In developing this analysis, the California Workforce Development Board shall consider the expertise of local workforce development boards in the state’s respective regional economies and shall encourage the local workforce development boards to identify industry sectors and industry clusters that have a competitive economic advantage and demonstrated economic importance in their respective local workforce development areas.
Identify new dynamic emergent industry sectors and industry clusters with substantial potential to generate new jobs and income growth for the state and its regional economies. In developing this analysis, the California Workforce Development Board shall consider the expertise of local workforce development boards in the state’s respective regional economies and shall encourage the local workforce development boards to identify new dynamic emergent industry sectors and industry clusters with substantial potential to generate new jobs and income growth in their respective local workforce development areas.
Provide a skills-gap analysis enumerating occupational and skills shortages in the industry sectors and industry clusters identified as having strategic importance to the state’s economy and its regional economies. In developing this analysis, the California Workforce Development Board shall consider the expertise of local workforce development boards in the state’s respective regional economies and shall encourage the local workforce development boards to conduct skills-gap analysis for their respective local workforce development areas. Skills-gap analysis for the state and its regional economies shall use labor market data to specify a list of high-priority, in-demand occupations for the state and its regional economies. This list shall be used to inform investment decisions and eligible training provider policies.
Establish, with input from local workforce development boards and other stakeholders, initial and subsequent eligibility criteria for the federal Workforce Innovation and Opportunity Act of 2014 eligible training provider list that effectively directs training resources into training programs leading to employment in high-demand, high-priority, and occupations that provide economic security, particularly those facing a shortage of skilled workers. The subsequent eligibility criteria, to the extent feasible, shall use performance and outcome measures to determine whether a provider is qualified to remain on the list. At a minimum, initial and subsequent eligibility criteria shall consider the following:
The relevance of the training program to the workforce needs of the state’s strategic industry sectors and industry clusters.
The need to plug skills gaps and skills shortages in the economy, including skills gaps and skills shortages at the state and regional level.
The need to plug skills gaps and skills shortages in local workforce development areas.
The likelihood that the training program will lead to job placement in a job providing economic security or job placement in an entry-level job that has a well-articulated career pathway or career ladder to a job providing economic security.
The need for basic skills in combination with programs that provide occupational skills training for individuals with barriers to employment and those who would otherwise be unable to enter occupational skills training.
To the extent feasible, utilize criteria that measure training and education provider performance, including, but not limited to, the following:
Measures of skills or competency attainment.
Measures relevant to program completion, including measures of course, certificate, degree, licensure, and program of study rate of completion.
For those entering the labor market, measures of employment placement and retention.
For those continuing in training or education, measures of educational or training progression.
For those who have entered the labor market, measures of income, including wage measures.
The division of labor for making initial and subsequent eligibility determinations under this division shall be modeled on the division of labor envisioned in the federal Workforce Innovation and Opportunity Act of 2014.
If the state receives a waiver from the federal subsequent eligibility provisions specified in the federal Workforce Innovation and Opportunity Act of 2014, the state workforce development board shall establish its own subsequent eligibility criteria that take into account all of the criteria specified in subparagraphs (A) to (G), inclusive.
ARTICLE 3. Removing Barriers to Employment Act [14030. - 14038.]
As used in this article, “Breaking Barriers to Employment Initiative” or “initiative” means the Breaking Barriers to Employment Initiative established in this article.
All efforts funded under this initiative are intended to supplement and be aligned with the broader workforce and education system in the State of California. The initiative is intended to focus on innovative approaches to, and proven practices for, addressing racial, ethnic, and socioeconomic disparities in the labor market.
The primary purpose of the initiative is to provide individuals with barriers to employment the services they need to enter, participate in, and complete broader workforce preparation, training, and education programs aligned with regional labor market needs. Those who complete these programs should have the skills and competencies necessary to successfully enter the labor market, retain employment, and earn wages that lead to self-sufficiency, and eventually, economic mobility and security.
The distinguishing characteristic of the initiative is the manner in which services will be delivered at the local and regional level. Under the initiative, services shall be delivered principally through a collaborative partnership between mission-driven, community-based organizations with experience in providing services and relevant relationships to targeted populations, consistent with the objectives of this initiative and to the populations specified, which may include, but are not limited to, faith-based, business-based, labor-based, including labor-management partnerships and labor-community partnerships, cultural-based, and services-based organizations, employment social enterprises, worker centers, and local workforce development boards to strengthen the America’s Job Center of California system. The role of the community-based organizations shall be to use their expertise in working with targeted populations and employers to ensure that individuals from these targeted populations receive the necessary supplemental, supportive, remedial, and wraparound services they need to successfully enter, participate in, and complete workforce and education programs and enter, be retained, and advance in the labor market. The role of local workforce development boards is to ensure a connection between community-based organizations and the America’s Job Center of California system to integrate individuals served by community-based organizations under this initiative into the education system and broader workforce for employment.
Funding for the initiative shall be subject to appropriation by the Legislature, but only for the purposes expressed in this article, and shall not draw from, supplant, or redirect existing state or federally funded education, workforce, or employment services programs, except that those funds may, but shall not be required to, be used as leverage with initiative funds.
Implementation of the initiative shall be contingent upon the California Workforce Development Board notifying the Department of Finance that sufficient moneys have been appropriated by the Legislature for this purpose.
Outreach shall be provided to prospective applicants, especially for small community-based organizations, organizations without a preexisting relationship to the local workforce boards, and organizations serving rural and small population areas.
Grants shall be awarded on a competitive basis.
Notwithstanding any law, no more than 15 percent of all moneys appropriated by the Legislature for the award of grants under this section shall be granted to lead applicants who receive an exception under subparagraph (B) of paragraph (1) of subdivision (f).
The California Workforce Development Board shall develop criteria for the selection of grant recipients that include, but are not limited to, all of the following:
Grant recipients have demonstrated experience working to ensure populations who have been historically disenfranchised from the labor market have access to quality jobs in their regions.
Applications shall explain the community-based organization’s capacity to provide services to relevant target populations and provide evidence of this capacity.
Each grant proposal shall be consistent with the purposes of the initiative.
Each application shall be submitted to the California Workforce Development Board and shall, at a minimum, include all of the following:
Designation of a partner entity that is a lead workforce development board or community-based organization with experience in providing services consistent with the objectives of this initiative and to the populations specified, which may include, but is not limited to, faith-based, business-based, labor-based, including labor-management partnerships and labor-community partnerships, cultural-based, and services-based organizations.
Notwithstanding subparagraph (A), an exception to the requirement of that subparagraph may be granted in instances where the lead applicant demonstrates, in writing to the California Workforce Development Board or the designated oversight authority as determined by the board, that securing a partner entity was not possible before the application deadline closed. However, the remaining criteria for the selection of grant recipients shall be required to be satisfied.
The designation of one or more targeted populations that will be served by the grant.
The designation of a service area, which may include one or more neighborhoods, local jurisdictions, regions, or statewide.
An explanation of the specific purpose and goals of the grant award, the roles and responsibilities of the lead applicant and partner entities, and a discussion of how funds will be used and success will be measured, the number of individuals who will be served, and the services provided to these individuals. Documentation shall be included to demonstrate that each partnering entity has agreed to the activities in the grant proposal.
A description of how the grant proposal is designed to complement the work of, and integrate the individuals being served with, the broader workforce, education, and employment system within the proposed service area, and evidence that the proposal incorporates innovative strategies or proven practices for service delivery that will lead to improved outcomes, sustainability, and systems improvement.
A grant application may be submitted by a workforce development board or community-based organization as a single fiscal agent and may include additional partners.
The purpose of the initiative shall be to provide individuals with barriers to employment the services they need to enter, participate in, and complete broader workforce preparation, training and education programs, and, ultimately, to obtain and retain employment. Specifically, the program should strive to address racial and ethnic exclusion and inequity in the labor force and enhance racial and economic justice. Projects should create pipelines to quality jobs, upward mobility, and income security for workers historically excluded from quality jobs and economic prosperity. Special emphasis shall be given to applications that integrate individuals from target populations into career pathway programs aligned with regional labor market needs.
Grants shall be evaluated using the following criteria:
Ability to provide the services proposed in the grant to the number of individuals specified in the grant as evidenced by, among other things, whether the grantee completed the work proposed.
Ability of individuals to successfully complete relevant programming funded under the grant as demonstrated by relevant measures directly related to the purpose of the program.
Ability of individuals to transition into or be integrated into the broader workforce and education system as evidenced by employment and enrollment in relevant programs.
Ability of individuals to succeed in both the broader workforce and education system and labor market once they transition into the broader system. This may be measured by tracking these individuals utilizing the existing performance monitoring systems and metrics governing relevant programs and outcomes once they transition into the broader system.
Ability for program participants to inform programming on an ongoing basis and evaluate program performance and success.
The degree to which program activities acknowledge and address historic racial inequity and socioeconomic barriers to labor force participation for targeted population groups.
The degree to which leadership at the executive level of the lead applicant organization reflects the target populations in Section 14034.
The degree to which at least 25 percent of the lead applicant organization’s staff reflects the target populations in Section 14034.
Grant applicants shall provide all necessary information to the California Workforce Development Board, or the board’s designee, to facilitate grant performance evaluation.
Grant applicants and partners may be required to participate in technical assistance activities, including, but not limited to, the convening of communities of practice to identify and help replicate evidence-based practices and to help facilitate an assessment and evaluation of grant performance and initiative success.
The California Workforce Development Board shall issue a final report to be posted on its internet website. The final report shall be posted no later than one year following the completion of the program. The reports shall include, but not be limited to, the programmatic impact on the target populations, the fiscal savings associated with the program, key conclusions, the benefits conferred or realized using quantitative and qualitative data, demographic data, and data on the languages spoken by the populations served by the grant.
If additional grant funds are appropriated to the California Workforce Development Board for the Breaking Barriers to Employment Initiative on or after July 1, 2025, the California Workforce Development Board shall produce a report evaluating grant program outcomes on the timeline prescribed in subdivision (t) of Section 14013.
Populations eligible to be served by grants include, but are not limited to, all of the following:
Youths who are at risk of disconnection or disconnected from the education system or employment.
Women seeking training or education to move into nontraditional fields of employment.
Displaced workers and long-term unemployed.
Low-wage workers.
Persons for whom English is not their primary language.
Economically disadvantaged persons.
CalWORKs participants.
Persons who are incarcerated and soon to be released or formerly incarcerated.
Armed services veterans.
Native Americans.
Migrants or seasonal farmworkers.
Persons with developmental or other disabilities.
Any other population with barriers to employment identified in subdivision (j) of Section 14005.
Immigrants.
Persons who reside in cities that are disproportionately impacted by violence or are enrolled in violence prevention or mitigation programs.
Persons who are victims of domestic violence or community violence.
Persons over 50 years of age who need retraining for in-demand skills.
Population groups with disproportionate numbers of people living in ZIP Codes of concentrated poverty.
Population groups that are disproportionately impacted by occupational segregation and who are underrepresented in jobs as defined by the Civil Rights Department in their enforcement of the California Equal Pay Act.
Populations that have been disproportionately impacted by unemployment, job interruption, and displacement during the pandemic.
Persons diagnosed with autism.
Eligible activities for initiative and grant funds shall include, but are not limited to, all of the following:
English language improvement training.
Culturally and linguistically relevant academic enrichment, basic skills training, tutoring, and adult education.
High school diploma and GED acquisition.
Skills and vocational training that aligns with regional labor market needs identified as part of the California Workforce Innovation and Opportunity Act regional planning process.
Work experience.
On-the-job training.
Stipends and income and language supports for trainees.
Earn and learn training.
Industry certifications.
Preapprenticeship programming offered in a manner that is consistent with the requirements of Section 14230, regardless of whether the preapprenticeship program funding source includes California Workforce Innovation and Opportunity Act funds.
Mentoring.
Other remedial education and work readiness skills.
Supportive services.
Entrepreneurial training and support for small business development.
Know-your-rights training.
Mental health services, trauma-informed care, and wraparound support services.
Employer education.
Activities undertaken pursuant to subdivision (d) of Section 14033.
The California Workforce Development Board may develop necessary policies to ensure that grants awarded under the initiative fund are activities that are consistent with the intent of this article.
The California Workforce Development Board may provide technical assistance to grant recipients to carry out the initiative.
The California Workforce Development Board may provide technical assistance by contract with a nonprofit organization. If the California Workforce Development Board contracts with a nonprofit organization, the California Workforce Development Board shall do both of the following:
Develop criteria for the selection of the nonprofit organization.
Award the contract through a transparent and competitive process, which shall include, but not be limited to, solicitation of proposals and evaluation of proposals through the criteria developed pursuant to subparagraph (A).
For the purposes of this section, “nonprofit organization” means any private, nonprofit organization that qualifies under Section 501(c)(3) of the United States Internal Revenue Code of 1986.
There is hereby created in the State Treasury the Breaking Barriers to Employment Initiative Fund. All moneys in the fund shall be available, upon appropriation by the Legislature, to carry out this article in support of the initiative. Subject to the approval of the Department of Finance, all moneys appropriated, or those collected or received from gifts, bequests, or donations, shall be deposited in the Breaking Barriers to Employment Initiative Fund in accordance with the terms of the gift or donation from which the moneys are derived and in accordance with Sections 8647, 11005, 11005.1, and 16302 of the Government Code.
All criteria, guidelines, and policies developed by the California Workforce Development Board for the administration of the initiative shall be exempt from the rulemaking provisions of the Administrative Procedures Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
ARTICLE 4. Prison to Employment Program [14040. - 14042.]
For purposes of this article, the following definitions shall apply:
“Earn and learn” has the same meaning as in subdivision (q) of Section 14005.
“Justice involved” refers to individuals who are on parole, probation, mandatory supervision, or postrelease community supervision and are supervised by, or are under the jurisdiction of, a county or the California Department of Corrections and Rehabilitation.
“Prison to employment regional partnership” or “regional partnership” means a partnership established to develop a regional plan that coordinates reentry and workforce services in each of the state’s 14 workforce regions established pursuant to the federal Workforce Innovation and Opportunity Act (Public Law 113-128), so that the formerly incarcerated and other justice-involved individuals in these regions can find and retain employment. Partners in a regional partnership shall include local workforce development boards, the California Department of Corrections and Rehabilitation, Division of Adult Parole Operations, community-based organizations that serve the formerly incarcerated and other justice-involved individuals, and reentry service providers. Partners may include other stakeholders, as specified by the board.
“Prison to employment regional plan” or “regional plan” is the plan developed by a regional partnership to coordinate reentry and workforce services in each of the state’s 14 workforce regions. The prison to employment regional plan is a component of each federal Workforce Innovation and Opportunity Act regional workforce plan.
“Supportive services” are services necessary to enable an individual to successfully participate in, or receive, workforce, education, and other related services authorized under subdivision (c) of Section 1234.3 of the Penal Code, Section 14035 of this code, as well as the federal Workforce Innovation and Opportunity Act and its corresponding regulations.
The board shall administer a prison to employment program pursuant to this article and shall award grants for the following purposes:
The development of regional partnerships and regional plans to provide and coordinate the necessary workforce, education, and related services that formerly incarcerated and other justice-involved individuals need to secure and retain employment and reduce the chances of recidivism.
The implementation of the regional plans, including the provision of workforce, education, and related services and supportive services outlined in these regional plans.
The provision of earn and learn opportunities for formerly incarcerated and other justice-involved individuals participating in the program.
Prior to awarding grants pursuant to Section 14041, the board shall develop and adopt guidelines and policies for the program, including, but not limited to, required regional plan content, required and optional regional plan partners, required activities of the regional partnerships, and guidelines for the allocation of grants, including planning guidance, timelines, and selection criteria for the distribution and evaluation of grant awards. The board shall consider factors including, but not limited to, the need for workforce services for the formerly incarcerated and justice-involved individuals in each region, the size of post-release populations, and the recidivism rate in each region.
The board shall ensure that the guidelines developed pursuant to subdivision (a) are consistent with paragraph (7) of subdivision (b) of Section 1234.2 of, and subdivision (b) and paragraph (1) of subdivision (e) of Section 1234.3 of, the Penal Code, and Section 14031 of, and paragraph (4) of subdivision (c) and paragraphs (3) and (4) of subdivision (d) of Section 14032 of, this code.
Grants made pursuant to this article shall be evaluated using criteria consistent with those set forth in subdivisions (b) to (d), inclusive, of Sections 14033. The board may utilize additional criteria to evaluate these grants. If additional grant funds are appropriated to the California Workforce Development Board for the Prison to Employment program on or after July 1, 2025, the California Workforce Development Board shall produce a report evaluating grant program outcomes on the timeline prescribed in subdivision (t) of Section 14013.
The criteria guidelines, and policies shall be exempt from the rulemaking provisions of the Administrative Procedures Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The board shall make the criteria, guidelines, and policies available to the public.
ARTICLE 6. Social Entrepreneurs for Economic Development Initiative [14106. - 14109.]
The Legislature finds and declares all of the following:
Numerous studies have indicated the significant economic contributions of immigrants to this state and the nation as a whole. Businesses launched by immigrant entrepreneurs create millions of jobs, generate billions of dollars in revenue, and help revitalize communities.
California has the highest concentration of immigrant business owners in the nation. From 2007 to 2011, immigrants founded 44 percent of new businesses in the state. In 2016, undocumented immigrant entrepreneurs generated over $3 billion in business income in California.
In 2017, individuals eligible for Deferred Action for Childhood Arrivals (DACA) earned over $23 billion in income and paid almost $1.8 billion in state and local taxes; more than 43,000 were entrepreneurs, providing jobs and supporting local economies. Individuals granted Temporary Protected Status (TPS) earned over $7 billion in 2017, and paid more than $890 million in federal taxes and over $650 million in state and local taxes.
Individuals who are not United States citizens or lawful permanent residents, or who are limited English proficient, face multiple impediments that may prevent them from securing and maintaining gainful employment. For example, due to actions at the federal level, DACA and TPS recipients, who are vital members of our communities and spark economic development, have been deprived of or are at risk of being denied certain federal protections, which will result in economic hardship for them and their families.
It is in the best interest of the State of California to enable these individuals to continue contributing to the economic vibrancy of this state, by supporting entrepreneurial opportunities to start and grow small businesses that will open up paths to economic self-sufficiency.
For purposes of this article, the following terms have the following meanings:
“California Workforce Development Board” or “board” means the California Workforce Development Board established pursuant to Article 1 (commencing with Section 14010).
“SEED Initiative” or “SEED” means the Social Entrepreneurs for Economic Development Initiative.
“Target populations” means either of the following:
Individuals with limited English proficiency, regardless of immigration or citizenship status.
Individuals who are neither United States citizens nor lawful permanent residents, which includes, but is not limited to, individuals who have been granted Deferred Action for Childhood Arrivals (DACA) or Temporary Protected Status (TPS) under federal law.
This article establishes the Social Entrepreneurs for Economic Development Initiative, to be administered by the California Workforce Development Board.
The SEED Initiative is aimed at economically disadvantaged groups who face significant barriers to employment, specifically individuals with limited English proficiency, or individuals who are neither United States citizens nor lawful permanent residents. While this includes individuals who have been granted DACA or TPS, the SEED Initiative is open to all individuals in the target populations, including but not limited to other immigrants, refugees and asylees, and United States citizens.
The purpose of the SEED Initiative is to support burgeoning entrepreneurship of individuals in SEED target populations, which will also increase the economic diversity of the state and help spur business innovation. Efforts funded under SEED are intended to supplement and be aligned with the broader workforce and education system in California.
It is the intent of the Legislature to allow persons who are not lawfully present in the United States, as members of the SEED target populations, to participate in and benefit from the SEED Initiative, and this section is therefore enacted pursuant to Section 1621(d) of Title 8 of the United States Code.
The SEED Initiative shall provide entrepreneurial training to individuals from the target populations and award microgrants to support them in launching or maintaining a small business in California.
Eligible uses of SEED funds include, but are not limited to, the development and implementation of the following SEED program components for any target population: an immigrant entrepreneurship training curriculum; microgrants and technical assistance to support small business development aimed at addressing a social problem or meeting a community need; community education and outreach about SEED; program evaluation; and program administration.
The board shall administer the SEED Initiative through nonprofit community-based organizations that will develop and implement SEED program components.
For purposes of implementing the SEED Initiative, no entity or person shall seek information that is unnecessary to determine eligibility, including whether the individual is unlawfully present in the United States. Information that may be collected from individuals participating in the SEED Initiative shall not constitute a record subject to disclosure under Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code.
ARTICLE 7. Workforce Wellness Centers [14120. - 14121.]
The Legislature finds and declares all of the following:
Workplace shootings, especially in high-stress industries such as transit agencies, have resulted in numerous deaths across California.
On May 26, 2021, a Santa Clara Valley Transportation Authority (VTA) employee entered the Guadalupe rail yard and began a shooting rampage that killed nine of his coworkers before taking his own life. This shooting is the deadliest mass shooting in the history of the San Francisco Bay area. The shooting occurred in locations integral to the operation of the light rail service, particularly adjacent to the Operational Control Center room and the entry to the entire second floor of the administration center, resulting in a 13-week shut down of rail services.
In response, the Legislature appropriated $20,000,000 to help the VTA and workers recover from the tragedy. The VTA was required by the state to create a joint labor management committee to provide recommendations for the use of those funds, including establishing a worker wellness center where workers and their families could receive onsite support and assistance, including peer-to-peer and trauma counseling and other mental health services.
The board, or a research institution under contract with the board, the Santa Clara Valley Transportation Authority, and the California Health and Human Services Agency, shall do all of the following:
Draft a model plan for the development and implementation of a worker wellness center that provides services and support to transit workers and their families.
Develop a plan to encourage the establishment of worker wellness center demonstration sites statewide in transit authorities to reduce workplace violence. The plan shall include, but is not limited to:
Analyzing the effectiveness of the Santa Clara Valley Transportation Authority’s wellness center.
Identifying interventions that promote employee wellness, prevention and early intervention, and peer-to-peer support.
Examining violence prevention tactics in the workplace, including, but not limited to, developing a worker reporting structure that focuses on prevention and early intervention and ways to foster peer reporting.
Identifying no less than three transit authority locations in California where the model plan could be utilized to reduce workplace violence and increase worker wellness interventions.
Identifying other high-stress industries that could benefit from utilizing workplace violence prevention tactics and worker wellness interventions.
In developing the plans described in paragraphs (1) and (2) of subdivision (a), the board, or a research institution under contract with the board, shall consider all of the following:
Funding sustainability, including the prospects for securing federal matching funds and billing private insurers.
Linkages to county behavioral health services agencies.
Ways to streamline workers’ compensation claims resulting from workplace violence.
The board shall consult with the Division of Occupational Safety and Health to ensure plans or proposals comply with and do not conflict with occupational safety and health laws and regulations.
This article shall become operative only upon an appropriation by the Legislature in the Budget Act or another statute for the purposes of implementing this article.
CHAPTER 4. Local Service Delivery [14200. - 14246.]
ARTICLE 1. Local Workforce Development Board [14200. - 14211.]
The local chief elected officials in a local workforce development area shall form, pursuant to guidelines established by the Governor and the board, a local workforce development board to plan and oversee the workforce investment system.
The Governor shall periodically certify one local board for each local area in the state, following the requirements of the federal Workforce Innovation and Opportunity Act of 2014.
The Governor shall establish, through the California Workforce Development Board, standards for certification of high-performance local workforce development boards. The California Workforce Development Board shall, in consultation with representatives from local workforce development boards, initiate a stakeholder process to determine the appropriate measurable metrics and standards for high-performance certification. These standards shall be implemented on or before January 1, 2013, and the first certification of high-performance boards shall occur on or before July 1, 2013. Certification and recertification of each high-performance local workforce development board shall occur thereafter midway through the implementation of the local and regional plans required by the Workforce Innovation and Opportunity Act. In order to meet the standards for certification, a high-performance local workforce development board shall do all of the following:
Consistently meet or exceed negotiated performance goals for all of the measures in each of the three federal Workforce Innovation and Opportunity Act of 2014 customer groups, which consist of adults, dislocated workers, and youth.
Consistently meet the statutory requirements of this division.
Develop and implement local policies and a local strategic plan that meets all of the following requirements:
Meets all local and regional planning requirements specified under the federal Workforce Innovation and Development Act of 2014.
Is consistent with the California Workforce Development Board State Plan.
Describes the actions that the board shall take to implement local policies in furtherance of its goals.
Serves as a written account of intended future courses of action aimed at achieving the specific goals of the local and state board within a specific timeframe.
Explains what needs to be done, by whom, and when each action is required to occur in order to meet those goals.
Demonstrate that the local planning process involves key stakeholders, including the major employers and industry groups in the relevant regional economy and organized labor.
Demonstrate that the local planning process takes into account the entire workforce training pipeline for the relevant regional economy, including partners in K–12 education, career technical education, the community college system, other postsecondary institutions, and other local workforce development areas operating in the relevant regional economy.
Demonstrate that the local planning process and plan are data driven, and that policy decisions at the local level are evidence based. Each high-performance local workforce development board shall use labor market data to develop and implement the local plan, taking care to steer resources into programs and services that are relevant to the needs of each workforce development area’s relevant regional labor market and high-wage industry sectors. Local workforce development areas shall demonstrate an evidence-based approach to policymaking by establishing performance benchmarks and targets to measure progress toward local goals and objectives.
Demonstrate investment in workforce initiatives, and, specifically, training programs that promote skills development and career ladders relevant to the needs of each workforce investment area’s regional labor market and high-wage industry sectors.
Establish a youth strategy aligned with the needs of each workforce investment area’s regional labor market and high-wage industry sectors.
Establish a business service plan that integrates local business involvement with workforce initiatives. This plan at a minimum shall include all of the following:
Efforts to partner with businesses to identify the workforce training and educational barriers to attract jobs in the relevant regional economy, existing skill gaps reducing the competitiveness of local businesses in the relevant regional economies, and potential emerging industries that would likely contribute to job growth in the relevant regional economy if investments were made for training and educational programs.
An electronic system for both businesses and job seekers to communicate about job opportunities.
A subcommittee of the local workforce development board that further develops and makes recommendations for the business service plan for each local workforce development board in an effort to increase employer involvement in the activities of the local workforce development board. The subcommittee members should be comprised of business representatives on the local workforce development board who represent both the leading industries and employers in the relevant regional economy and potential emerging sectors that have significant potential to contribute to job growth in the relevant regional economy if investments were made for training and educational programs.
The Governor and the Legislature, as part of the annual budget process, in consultation with the California Workforce Development Board, shall annually reserve a portion of the 15-percent discretionary fund made available pursuant to the federal Workforce Innovation and Opportunity Act of 2014 for the purpose of providing performance incentives to high-performance local workforce development boards. The remaining discretionary funds shall continue to be available for other discretionary purposes as provided for in the federal Workforce Innovation and Opportunity Act of 2014.
Only a workforce development board that is certified as a high-performance local workforce development board by the California Workforce Development Board shall be eligible to receive any incentive money reserved for high-performance local workforce development boards, as described in subdivision (d). A board that is not certified as a high-performance local workforce development board shall not receive any portion of the money reserved for high-performance local workforce development boards, as described in subdivision (d).
The California Workforce Development Board shall establish a policy for the allocation of incentive moneys to high-performance local workforce development boards.
To the extent permitted by the Workforce Innovation and Opportunity Act of 2014, the California Workforce Development Board may consider the utilization of incentive grants, or direct assistance, or both, to local workforce development boards for the purposes of this section.
There shall not be a requirement to set aside federal Workforce Innovation and Opportunity Act of 2014 funds for the purposes of subdivision (d), (e), (f), or (g) in years when the federal government significantly reduces the share of federal Workforce Innovation and Opportunity Act of 2014 funds appropriated to the state for statewide discretionary purposes below the federal statutory amount of 15 percent.
Local workforce development boards shall be established in each local workforce development area of the state to assist the local chief elected official in planning, oversight, and evaluation of local workforce investment. The local board shall promote effective outcomes consistent with statewide goals, objectives, and negotiated local performance standards.
The Governor, in partnership with the board, shall establish criteria for use by chief elected officials in the local areas for appointment of members of the local boards. Such criteria shall require that, at a minimum, all of the following:
A majority of the members of each local board shall be representatives of business in the local area, who:
Are owners of businesses, chief executives or operating officers of businesses, or other business executives or employers with optimum policymaking or hiring authority.
Represent businesses, including small businesses, or organizations representing businesses described in this subdivision, that provide employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors or occupations in the local area.
Are appointed from among individuals nominated by local business organizations and business trade associations.
Not less than 20 percent of the members of each local board shall be representatives of the workforce within the local area, who:
Shall include representatives of labor organizations, for a local area in which employees are represented by labor organizations, who have been nominated by local labor federations and these representatives shall amount to not less than 15 percent of local board membership, and be subject to the following:
For a local area in which no employees are represented by such organizations, other representatives of employees shall be appointed to the board but any local board that appoints representatives of employees that are not nominated by local labor federations shall demonstrate that no employees are represented by such organizations in the local area.
Shall include a representative, who shall be a member of a labor organization or a training director, from a joint labor-management apprenticeship program, or if no such joint program exists in the area, such a representative of a state-approved apprenticeship program in the area, if such a program exists.
May include representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment needs of individuals with barriers to employment, including organizations that serve veterans or that provide or support competitive integrated employment for individuals with disabilities.
May include representatives of organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of eligible youth, including representatives of organizations that serve out-of-school youth.
Each local board shall include representatives of entities administering education and training activities in the local area, who:
Each local board shall include representatives of governmental and economic and community development entities serving the local area, who:
May include representatives of philanthropic organizations serving the local area.
Each local board may include such other individuals or representatives of entities as the chief elected official in the local area may determine to be appropriate.
The local board shall elect a chairperson for the local board from among the business representatives.
Consistent with the requirements of the Workforce Innovation and Opportunity Act, the local board shall do all of the following:
In partnership with the chief elected official for the local area involved, develop and submit a local plan to the Governor that meets the requirements of the Workforce Innovation and Opportunity Act. If the local area is part of a planning region that includes other local areas, the local board shall collaborate with the other local boards and chief elected officials from such other local areas in the preparation and submission of a regional plan as described in the Workforce and Innovation and Opportunity Act.
In order to assist in the development and implementation of the local plan, the local board shall do all of the following:
Carry out analyses of the economic conditions in the region, the needed knowledge and skills for the region, the workforce in the region, and workforce development activities, including education and training, in the region described in Section 3123(b)(1)(D) of Title 29 of the United States Code, and regularly update such information.
Assist the Governor in developing the statewide workforce and labor market information system described in Section 15(e) of the Wagner-Peyser Act (29 U.S.C. Sec. 49l–2(e)), specifically in the collection, analysis, and utilization of workforce and labor market information for the region.
Conduct such other research, data collection, and analysis related to the workforce needs of the regional economy as the board, after receiving input from a wide array of stakeholders, determines to be necessary to carry out its functions.
Convene local workforce development system stakeholders to assist in the development of the local plan under Section 3123 of Title 29 of the United States Code and in identifying nonfederal expertise and resources to leverage support for workforce development activities. The local board, including standing committees, may engage such stakeholders in carrying out the functions described in this subdivision.
Lead efforts to engage with a diverse range of employers and with entities in the region involved to do all of the following:
Develop and implement proven or promising strategies for meeting the employment and skill needs of workers and employers, like the establishment of industry and sector partnerships, that provide the skilled workforce needed by employers in the region, and that expand employment and career advancement opportunities for workforce development system participants in in-demand industry sectors or occupations.
With representatives of secondary and postsecondary education programs, lead efforts in the local area to develop and implement career pathways within the local area by aligning the employment, training, education, and supportive services that are needed by adults and youth, particularly individuals with barriers to employment.
Lead efforts in the local area to accomplish both of the following:
Identify and promote proven and promising strategies and initiatives for meeting the needs of employers, and workers and jobseekers, including individuals with barriers to employment, in the local workforce development system, including providing physical and programmatic accessibility, in accordance with Section 3248 of Title 29 of the United States Code, if applicable, and applicable provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.), to the one-stop delivery system.
Identify and disseminate information on proven and promising practices carried out in other local areas for meeting these needs.
Develop strategies for using technology to maximize the accessibility and effectiveness of the local workforce development system for employers, and workers and jobseekers, by doing all of the following:
Facilitating connections among the intake and case management information systems of the one-stop partner programs to support a comprehensive workforce development system in the local area.
Facilitating access to services provided through the one-stop delivery system involved, including facilitating the access in remote areas.
Identifying strategies for better meeting the needs of individuals with barriers to employment, including strategies that augment traditional service delivery, and increase access to services and programs of the one-stop delivery system, such as improving digital literacy skills.
Leveraging resources and capacity within the local workforce development system, including resources and capacity for services for individuals with barriers to employment.
In partnership with the chief elected official for the local area, shall conduct oversight for local youth workforce investment activities as required under the federal Workforce Innovation and Opportunity Act, ensure the appropriate use and management of the funds as required under the Workforce Innovation and Opportunity Act, and, for workforce development activities, ensure the appropriate use, management, and investment of funds to maximize performance outcomes as required under the federal Workforce Innovation and Opportunity Act.
Negotiate and reach agreement on local performance accountability measures, as described in Section 3141(c) of Title 29 of the United States Code, with the chief elected official and the Governor.
Select and provide access to system operators, service providers, trainers, and educators, in a manner consistent with the requirements of the Workforce Innovation and Opportunity Act and applicable state laws, including all of the following:
Consistent with Section 3151(d) of Title 29 of the United States Code, and with the agreement of the chief elected official for the local area, designate or certify one-stop operators as described in Section 3151(d)(2)(A) of Title 29 of the United States Code and terminate for cause the eligibility of these operators.
Consistent with Section 3153 of Title 29 of the United States Code, identify eligible providers of youth workforce investment activities in the local area by awarding grants or contracts on a competitive basis, except as provided in Section 3153(b) of Title 29 of the United States Code, based on the recommendations of the youth standing committee, if such a committee is established for the local area and terminate for cause the eligibility of these providers.
Consistent with Section 3152 of Title 29 of the United States Code and paragraph (4) of subdivision (d) of Section 14020, identify eligible providers of training services in the local area.
If the one-stop operator does not provide career services described in Section 3174(c)(2) of Title 29 of the United States Code in a local area, identify eligible providers of those career services in the local area by awarding contracts.
Consistent with Section 3152 of Title 29 of the United States Code and paragraphs (2) and (3) of Section 3174(c) of Title 29 of the United States Code, work with the state to ensure there are sufficient numbers and types of providers of career services and training services, including eligible providers with expertise in assisting individuals with disabilities and eligible providers with expertise in assisting adults in need of adult education and literacy activities, serving the local area and providing the services involved in a manner that maximizes consumer choice, as well as providing opportunities that lead to competitive integrated employment for individuals with disabilities.
Consistent with the requirements of the Workforce Innovation and Opportunity Act, coordinate activities with education and training providers in the local area, including providers of workforce development activities, providers of adult education and literacy activities under Title II of the Workforce Innovation and Opportunity Act, providers of career and technical education, as defined in Section 2302 of Title 20 of the United States Code, and local agencies administering plans under Title I of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 720 et seq.), other than Section 112 or Part C of that Title (29 U.S.C. Sec. 732, 741).
The local board, in order to carry out its functions:
Shall prepare a budget for the purpose of carrying out the duties of the local board as specified under this section, subject to the approval of the local chief elected official.
Shall direct the activities of the local board’s executive director.
May employ additional staff to carry out the activities as described in the local board’s plan.
May solicit and accept contributions and grant funds from other sources.
Shall not provide training services unless the Governor grants a written waiver in accordance with the process outlined in the Workforce Innovation and Opportunity Act.
May provide career services described in Section 3174(c)(2) of Title 29 of the United States Code through a one-stop delivery system or be designated or certified as a one-stop operator only with the agreement of the chief elected official in the local area and the Governor.
A local workforce development board may establish as a standing committee to provide information and to assist with planning, operational, and other issues relating to the provision of services to youth, which shall include community-based organizations with a demonstrated record of success in serving eligible youth. Members of this committee shall be appointed in conformity with the requirements of the federal Workforce Innovation and Opportunity Act.
It is the intent of the Legislature that if appointing members to any standing committee on the provision of youth services, the local workforce investment board and the local chief elected official shall endeavor to appoint:
Representatives of youth who are enrolled in school and out-of-school youth.
Representatives from the private sector.
Representatives of local educational agencies serving youth.
Representatives of private nonprofit agencies serving youth.
Representatives of apprenticeship training programs serving youth.
Beginning program year 2012, an amount equal to at least 25 percent of funds available under Title I of the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128) provided to local workforce investment boards for adults and dislocated workers shall be spent on workforce training programs. This minimum may be met either by spending 25 percent of those base formula funds on training or by combining a portion of those base formula funds with leveraged funds as specified in subdivision (b).
Beginning program year 2016, an amount equal to at least 30 percent of funds available under Title I of the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128) provided to local workforce development boards for adults and dislocated workers shall be spent on workforce training programs. This minimum may be met either by spending 30 percent of those base formula funds on training or by combining a portion of those base formula funds with leveraged funds as specified in subdivision (b).
Except as provided in subdivision (b), expenditures that shall count toward the minimum percentage of funds shall include only training services as defined in Section 3174(c)(3)(D) of Title 29 of the United States Code and the corresponding sections of the Code of Federal Regulations, including all of the following:
Occupational skills training, including training for nontraditional employment.
On-the-job training.
Programs that combine workplace training with related instruction, which may include cooperative education programs.
Training programs operated by the private sector.
Skills upgrading and retraining.
Entrepreneurial training.
Incumbent worker training in accordance with Section 3174(d)(4) of Title 29 of the United States Code.
Transitional jobs in accordance with Section 3174(d)(5) of Title 29 of the United States Code.
Job readiness training provided in combination with any of the services described in subparagraphs (A) to (H), inclusive.
Adult education and literacy activities provided in combination with services described in any of subparagraphs (A) to (G), inclusive.
Customized training conducted with a commitment by an employer or group of employers to employ an individual upon successful completion of the training.
Local workforce development boards may receive a credit of up to 10 percent of their adult and dislocated worker formula fund base allocations for public education and training funds and private resources from industry and from joint labor-management trusts that are leveraged by a local workforce development board for expenditure on training and supportive services. This credit may be applied toward the minimum training requirements in paragraphs (1) and (2) of subdivision (a).
Leveraged funds that may be applied toward the credit allowed by this subdivision shall only include the following:
Federal Pell Grants established under Title IV of the federal Higher Education Act of 1965 (20 U.S.C. Sec. 1070 et seq.).
Programs authorized by the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128).
Trade adjustment assistance.
Department of Labor National Emergency Grants.
Match funds from employers, industry, and industry associations.
Match funds from joint labor-management trusts.
Employment training panel grants.
Supportive services as defined by the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128) and the corresponding sections of the Code of Federal Regulations, but only for those individuals enrolled in training services for occupations in demand by industry, as defined in Section 3174(c)(3)(D) of Title 29 of the United States Code and the corresponding sections of the Code of Federal Regulations. Supportive services may include, but are not limited to, the costs of trainees’ or students’ books, safety and lab equipment, tools and any payment of costs permitted under the rules of the federal Workforce Innovation and Opportunity Act of 2014 and corresponding regulations pertaining to supportive services expenditures, including the rule that these supportive services costs are necessary for the individual to participate in training.
Temporary Assistance for Needy Families (TANF) funds spent on supportive services as defined by the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128) and the corresponding sections of the Code of Federal Regulations, for TANF enrolled individuals coenrolled in and receiving training services for occupations in demand by industry through the federal Workforce Innovation and Opportunity Act of 2014. Supportive services may include, but are not limited to, the costs of trainees’ or students’ books, safety and lab equipment, tools and any payment of costs permitted under the rules of the federal Workforce Innovation and Opportunity Act of 2014 and corresponding regulations pertaining to supportive services expenditures, including the rule that these supportive services costs are necessary for the individual to participate in training.
Temporary Assistance for Needy Families (TANF) funds spent on transitional and subsidized employment for TANF enrolled individuals coenrolled in and receiving training services through the federal Workforce Innovation and Opportunity Act of 2014.
Any other local, state, or federal funds spent on training or supportive services for individuals enrolled in training, provided the individuals receiving the training are enrolled in the federal Workforce Innovation and Opportunity Act of 2014 for performance reporting and tracking purposes.
With the approval of the state board, any other public or private funds source not identified in this subparagraph that is used to provide training or supportive services for individuals who are also enrolled in training provided the individuals receiving the relevant services are enrolled in the federal Workforce Innovation and Opportunity Act of 2014 for performance reporting and tracking purposes.
Credit for leveraged funds shall only be given if the local workforce development board keeps records of all training and supportive services expenditures it chooses to apply to the credit. Training and supportive services expenditures may only be applied to the credit if the relevant training costs can be independently verified by the Employment Development Department and, without exception, training participants must be coenrolled in the federal Workforce Innovation and Opportunity Act of 2014 performance monitoring system.
The use of leveraged funds to partially meet the training requirements specified in paragraphs (1) and (2) of subdivision (a) is the prerogative of a local workforce development board. A local workforce development board shall annually provide data to the Employment Development Department on the amount of leveraged funds used to partially meet the requirements of subdivision (a). This data shall disaggregate and report separately, the amount spent on both training and supportive services. Costs arising from the recordkeeping required to demonstrate compliance with the leveraging requirements of this subdivision are the responsibility of the local board.
The Employment Development Department shall report annually to the Governor, the Legislature, and the California Workforce Development Board, on or before November 30, regarding the training and supportive services expenditures made by local workforce development boards pursuant to the expenditure requirements of this section.
Consistent with the definitions and regulations of the federal Workforce Innovation and Opportunity Act of 2014, the Employment Development Department shall specify which expenditures qualify as training and supportive services expenditures. The annual report shall specify the total amount of federal funding provided to the state and to each of the local workforce development areas for the adult and dislocated persons programs and the amount of these federal Workforce Innovation and Opportunity Act of 2014 funds expended for training services.
Consistent with calculations required by paragraph (1), the report shall also include, for each local workforce development area, the total amount of leverage funds utilized as training expenditure allowances authorized by subdivision (b) to meet the expenditure requirements of this section. The report shall specify the share of leverage funds that were expended on both training and supportive services for each Local Workforce Development Area.
A report submitted pursuant to this section shall comply with Section 9795 of the Government Code.
A local workforce development area that does not meet the requirements of subdivision (a) shall submit a corrective action plan to the Employment Development Department that provides reasons for not meeting the requirements and describes actions taken to address the identified expenditure deficiencies. A local workforce development area shall provide a corrective action plan to the Employment Development Department pursuant to this section within 90 days of receiving the calculations described in subdivision (c).
For the purpose of this section, “program year” has the same meaning as provided in Section 667.100 of Title 20 of the Code of Federal Regulations.
ARTICLE 2. Local Workforce Investment Plan [14220. - 14223.]
Each local board shall develop and submit to the Governor a comprehensive four-year local plan in partnership with the appropriate chief local elected official. The local plan shall be consistent with the State Plan. If the local area is part of a planning region, the local board shall comply with Section 3121(c) of Title 29 of the United States Code in the preparation and submission of a regional plan. At the end of the first two-year period of the four-year local plan, each local board shall review the local plan and the local board, in partnership with the chief elected official, shall prepare and submit modifications to the local plan to reflect changes in labor market and economic conditions or in other factors affecting the implementation of the local plan.
The local plan shall include all of the following:
A description of the strategic planning elements consisting of each of the following:
An analysis of the regional economic conditions, including, existing and emerging in-demand industry sectors and occupations and the employment needs of employers in those industry sectors and occupations.
An analysis of the knowledge and skills needed to meet the employment needs of the employers in the region, including employment needs in in-demand industry sectors and occupations.
An analysis of the workforce in the region, including current labor force employment and unemployment data, and information on labor market trends, and the educational and skill levels of the workforce in the region, including individuals with barriers to employment.
An analysis of the workforce development activities, including education and training, in the region, including an analysis of the strengths and weaknesses of such services, and the capacity to provide such services, to address the identified education and skill needs of the workforce and the employment needs of employers in the region.
A description of the local board's strategic vision and goals for preparing an educated and skilled workforce, including youth and individuals with barriers to employment, including goals relating to the performance accountability measures based on primary indicators of performance described in Section 3141(b)(2)(A) of Title 29 of the United States Code in order to support regional economic growth and economic self-sufficiency.
Taking into account analyses described in paragraphs (1) to (4), inclusive, a strategy to work with the entities that carry out the core programs to align resources available to the local area, to achieve the strategic vision and goals described in paragraph (5).
A description of the workforce development system in the local area that identifies the programs that are included in that system and how the local board will work with the entities carrying out core programs and other workforce development programs to support alignment to provide services, including programs of study authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), that support the strategy identified in the State Plan under Section 3112(b)(1)(E) of the Title 29 of the United States Code.
A description of how the local board, working with the entities carrying out core programs, will expand access to employment, training, education, and supportive services for eligible individuals, particularly eligible individuals with barriers to employment, including how the local board will facilitate the development of career pathways and co-enrollment, as appropriate, in core programs, and improve access to activities leading to a recognized postsecondary credential, including a credential that is an industry-recognized certificate or certification, portable, and stackable.
A description of the strategies and services that will be used in the local area in order to facilitate engagement of employers, including small employers and employers in in-demand industry sectors and occupations, in workforce development programs, support a local workforce development system that meets the needs of businesses in the local area, better coordinate workforce development programs and economic development, and strengthen linkages between the one-stop delivery system and unemployment insurance programs. This may include the implementation of initiatives such as incumbent worker training programs, on-the-job training programs, customized training programs, industry and sector strategies, career pathways initiatives, utilization of effective business intermediaries, and other business services and strategies, designed to meet the needs of employers in the corresponding region in support of the strategy described in paragraph (5) of subdivision (a).
A description of how the local board will coordinate workforce investment activities carried out in the local area with economic development activities carried out in the region in which the local area is located, or planning region, and promote entrepreneurial skills training and microenterprise services.
A description of the one-stop delivery system in the local area, including all of the following:
A description of how the local board will ensure the continuous improvement of eligible providers of services through the system and ensure that such providers meet the employment needs of local employers, and workers and jobseekers.
A description of how the local board will facilitate access to services provided through the one-stop delivery system, including in remote areas, through the use of technology and through other means.
A description of how entities within the one-stop delivery system, including one-stop operators and the one-stop partners, will comply with Section 3248 of Title 29 of the United States Code, if applicable, and applicable provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.) regarding the physical and programmatic accessibility of facilities, programs and services, technology, and materials for individuals with disabilities, including providing staff training and support for addressing the needs of individuals with disabilities.
A description of the roles and resource contributions of the one-stop partners.
A description and assessment of the type and availability of adult and dislocated worker employment and training activities in the local area.
A description of how the local board will coordinate workforce investment activities carried out in the local area with statewide rapid response activities, as described in Section 3174(a)(2)(A) of Title 29 of the United States Code.
A description and assessment of the type and availability of youth workforce investment activities in the local area, including activities for youth who are individuals with disabilities, which description and assessment shall include an identification of successful models of such youth workforce investment activities.
A description of how the local board will coordinate education and workforce investment activities carried out in the local area with relevant secondary and postsecondary education programs and activities to coordinate strategies, enhance services, and avoid duplication of services.
A description of how the local board will coordinate workforce investment activities carried out under this article in the local area with the provision of transportation, including public transportation, and other appropriate supportive services in the local area.
A description of plans and strategies for, and assurances concerning, maximizing coordination of services provided by the state employment service under the Wagner-Peyser Act (29 U.S.C. Sec. 49 et seq.) and services provided in the local area through the one-stop delivery system, to improve service delivery and avoid duplication of services.
A description of how the local board will coordinate workforce investment activities carried out in the local area with the provision of adult education and literacy activities in the local area, including a description of how the local board will carry out, consistent with subparagraphs (A) and (B)(i) of Section 3122(d)(11) of Title 29 of the United States Code and Section 3322 of Title 29 of the United States Code, the review of local applications.
A description of the replicated cooperative agreements, as defined in Section 3122(d)(11) of Title 29 of the United States Code between the local board or other local entities described in Section 101(a)(11)(B) of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 721(a)(11)(B)) and the local office of a designated state agency or designated state unit administering programs carried out under Title I of that act, other than Section 112 or Part C of that Title (29 U.S.C. Secs. 732 and 741) and subject to Section 3151(f) of Title 29 of the United States Code, in accordance with Section 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 721(a)(11)) with respect to efforts that will enhance the provision of services to individuals with disabilities and to other individuals, such as cross training of staff, technical assistance, use and sharing of information, cooperative efforts with employers, and other efforts at cooperation, collaboration, and coordination.
An identification of the entity responsible for the disbursal of grant funds described in Section 3122(d)(12)(B)(i)(III) of Title 29 of the United States Code, as determined by the chief elected official or the Governor under Section 3122(d)(12)(B)(i) of Title 29 of the United States Code.
A description of the competitive process to be used to award the subgrants and contracts in the local area for activities carried out pursuant to this act.
A description of the local levels of performance negotiated with the Governor and chief elected official pursuant to Section 3141(c) of Title 29 of the United States Code, to be used to measure the performance of the local area and to be used by the local board for measuring the performance of the local fiscal agent, where appropriate, eligible providers, and the one-stop delivery system, in the local area.
A description of the actions the local board will take toward becoming or remaining a high-performing board, consistent with the factors developed by the board pursuant to Section 3111(d)(6) of Title 29 of the United States Code. This federal requirement is separate and apart from state standards pertaining to the certification of high-performance local workforce development boards.
A description of how training services will be provided in accordance with Section 3174(c)(3)(G) of Title 29 of the United States Code, including, if contracts for the training services will be used, how the use of such contracts will be coordinated with the use of individual training accounts and how the local board will ensure informed customer choice in the selection of training programs regardless of how the training services are to be provided.
A description of the process used by the local board, consistent with subsection (d), to provide an opportunity for public comment, including comment by representatives of businesses and comment by representatives of labor organizations, and input into the development of the local plan, prior to submission of the plan.
A description of how one-stop centers are implementing and transitioning to an integrated, technology-enabled intake and case management information system for programs carried out under this act and programs carried out by one-stop partners.
Any other information as the Governor may require.
To the extent permitted under the federal Workforce Innovation and Opportunity Act, the local board may submit a local unified plan that includes or integrates the local workforce investment and other local workforce plans such as:
An instructional and job training plan required by Section 10200 of the Education Code.
A plan for community college curriculum development or redesign required pursuant to Section 79202 of the Education Code.
A county plan for CalWORKs required by Section 10531 of the Welfare and Institutions Code.
A local welfare-to-work plan required by Section 5063, to the extent permitted under federal law.
Prior to the date upon which the local board submits a local plan, the local board shall make available copies of a proposed local plan to the public through electronic and other means, like public hearings and local news media, allow members of the public, including representatives of business, representatives of labor organizations, and representatives of education to submit comments on the proposed local plan to the local board not later than the end of the 30-day period beginning on the date on which the proposed local plan is made available and submit the plan to the Governor along with any comments that were in disagreement with the plan.
ARTICLE 3. One-Stop Career Center System [14230. - 14235.]
It is the intent of the Legislature that:
California deliver comprehensive workforce services to jobseekers, students, and employers through a system of one-stop career centers.
Services and resources target high-wage industry sectors with career advancement opportunities.
Universal access to career services shall be available to adult residents regardless of income, education, employment barriers, or other eligibility requirements. Career services shall include, but not be limited to:
Outreach, intake, and orientation to services available through the one-stop delivery system.
Initial assessment of skill levels, aptitudes, abilities, and supportive service needs.
Job search and placement assistance.
Career counseling, where appropriate.
Provision of labor market information.
Provision of program performance and cost information on eligible providers of training services and local area performance measures.
Provision of information on supportive services in the local area.
Provision of information on the filing of claims for unemployment compensation benefits and unemployment compensation disability benefits.
Assistance in establishing eligibility for welfare-to-work activities pursuant to Section 11325.8 of the Welfare and Institutions Code, and financial aid assistance.
Comprehensive and specialized assessments of skill levels and service needs, including learning disability screening.
Development of individual employment plans.
Counseling.
Career planning.
Short-term prevocational services to prepare an individual for training or employment.
State and federally funded workforce education, training, and employment programs shall be integrated in the one-stop delivery system to achieve universal access to the career services described in paragraph (3).
Training services shall be made available to individuals who have met the requirements for career services, have been unable to obtain or retain employment through career services, are in need of training services to obtain or retain employment that leads to economic self-sufficiency or wages comparable to, or higher than, wages from previous employment, have the skills and qualifications to successfully participate in the training, and have selected a program of services directly linked to occupations in demand in the local or regional area. Training services may include:
Occupational skill training including training for nontraditional employment.
On-the-job training.
Programs that combine workplace training with related instruction.
Training programs operated by the private sector.
Skill upgrading and retraining.
Entrepreneurial training.
Incumbent worker training, in accordance with Section 134(d)(4) of the federal Workforce Innovation and Opportunity Act.
Transitional jobs, in accordance with Section 134(d)(5) of the federal Workforce Innovation and Opportunity Act.
Job readiness training, provided in combination with any service under subparagraphs (A) to (H), inclusive.
Adult education and literacy activities, including vocational English as a second language, provided in combination with subparagraphs (A) through (G), inclusive.
Customized training conducted by an employer or a group of employers or a labor-management training partnership with a commitment to employ an individual upon completion of the training.
As prescribed in the federal Workforce Innovation and Opportunity Act, adult recipients of public assistance, other low-income adults, and individuals who are basic skills deficient shall be given priority for training services and career services described in Section 134(d)(2)(A)(xii) of the federal Workforce Innovation and Opportunity Act.
Each local workforce development board shall establish at least one full service one-stop career center in the local workforce development area. Each full service one-stop career center shall have all entities required to be partners in Section 3151 of Title 29 of the United States Code as partners and shall provide jobseekers with integrated employment, education, training, and job search services. Additionally, employers will be provided with access to comprehensive career and labor market information, job placement, economic development information, performance and program information on service providers, and other such services as the businesses in the community may require.
Local boards may also establish affiliated and specialized centers, as defined in the federal Workforce Innovation and Opportunity Act of 2014, which shall act as portals into the larger local one-stop system, but are not required to have all of the partners specified for full service one-stop centers.
Each local board shall develop a policy for identifying individuals who, because of their skills or experience, should be referred immediately to training services. To the extent permitted under the federal Workforce Innovation and Opportunity Act of 2014, this policy, along with the methods for referral of individuals between the one-stop operators and the one-stop partners for appropriate services and activities, shall be contained in the memorandum of understanding between the local board and the one-stop partners.
The California Workforce Development Board and each local board shall ensure that programs and services funded by the federal Workforce Innovation and Opportunity Act of 2014 and directed to apprenticeable occupations, including preapprenticeship training, are conducted, to the maximum extent feasible, in coordination with one or more apprenticeship programs approved by the Division of Apprenticeship Standards for the occupation and geographic area. The California Workforce Development Board and each local board shall also develop a policy of fostering collaboration between community colleges and approved apprenticeship programs in the geographic area to provide preapprenticeship training, apprenticeship training, and continuing education in apprenticeable occupations through the approved apprenticeship programs.
The California Workforce Development Board and each local board also shall ensure, to the maximum extent feasible, that federal Workforce Innovation and Opportunity Act of 2014 funds respectively awarded by them for purposes of preapprenticeship training in the building and construction trades fund programs and services that do both of the following:
Follow the Multi-Craft Core Curriculum implemented by the State Department of Education for its pilot project with California Partnership Academies.
Develop a plan for outreach and retention for women participants in the preapprenticeship program to help increase the representation of women in the building and construction trades.
The California Workforce Development Board shall develop policies for the implementation of these provisions.
In light of California’s diverse population, each one-stop career center should have the capacity to provide the appropriate services to the full range of languages and cultures represented in the community served by the one-stop career center.
For purposes of this division and any laws governing workforce development programs, and to the extent permitted under Chapter 32 of Title 29 of the United States Code and any related regulations, entrance into a registered apprenticeship program shall be considered placement into a job.
The local providers of the following programs or activities shall be required partners in the local one-stop system:
Programs authorized under Title I of the Workforce Innovation and Opportunity Act.
Programs authorized under the Wagner-Peyser Act (29 U.S.C. Sec. 49 et seq.).
Adult education and literacy activities authorized under Title II of the Workforce Innovation and Opportunity Act.
Programs authorized under Title I of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 720 et seq.) other than Section 112 or Part C of the act (29 U.S.C. Sec. 732 and 741).
Activities authorized under Title V of the Older Americans Act of 1965 (42 U.S.C. Sec. 3056 et seq.).
Career and technical education programs at the postsecondary level authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. Sec. 2301 et seq.).
Activities authorized under Chapter 2 of Title II of the Trade Act of 1974 (19 U.S.C. Sec. 2271 et seq.).
Activities authorized under Chapter 41 (commencing with Section 4100) of Title 38 of the United States Code.
Employment and training activities carried out under the Community Services Block Grant Act (42 U.S.C. Sec. 9901 et seq.).
Employment and training activities carried out by the Department of Housing and Urban Development.
Programs authorized by this code, in accordance with applicable federal law.
Programs authorized under Section 212 of the Second Chance Act of 2007 (42 U.S.C. Sec. 17532).
Programs authorized under Part A of Title IV of the Social Security Act (42 U.S.C. Sec. 601 et seq.).
Community-based organizations that provide career services as described in subparagraphs (J) to (N), inclusive, of paragraph (1) of subdivision (a) of Section 14230, shall be encouraged to be one-stop partners.
In conformity with the requirements of Section 3151 of Title 29 of the United States Code, and all applicable state and federal laws and regulations, the local board, with the agreement of the chief local elected official for the local area, shall develop and enter into a memorandum of understanding with the local one-stop partners, designate, certify, and terminate one-stop operators, and conduct oversight over the local one-stop delivery system.
One-stop career center operators shall recognize and comply with applicable labor agreements affecting employees of one-stop career centers, including the right to access by labor representatives pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1 of the Government Code).
In order to avoid a conflict of interest, operators of one-stop career centers that issue vouchers shall not be the recipient of vouchers issued by their center without the approval of the chief local elected official and the state board in instances when there are no other potential one-stop partners in the local area.
To the full extent permitted by federal law, required by federal law, or both, the Employment Development Department shall utilize its Wagner-Peyser funded activities and programs to support local one-stop career centers.
ARTICLE 4. The California Creative Workforce Act of 2021 [14240. - 14246.]
This article shall be known, and may be cited, as the California Creative Workforce Act of 2021.
The purpose of this article is:
To establish creative arts workforce development as a state priority.
To recognize creative workers across California as essential workers and contributors for overcoming California’s greatest challenges through the rebuilding of California’s cultural landscape into a more equitable and just framework.
To develop and support a workforce career development pipeline that serves creative workers at all stages of their careers.
To create equitable opportunities for career exploration and participation in creative work for individuals and communities who may have faced barriers to participation and employment in creative work as a result of low levels of public and private investment, limited exposure to arts programming, or other social or economic barriers to participation and employment in creative work.
To promote employment and earn and learn job training opportunities for creative workers throughout the state.
For purposes of this article:
“Act” means the California Creative Workforce Act of 2021
“Board” means the California Workforce Development Board, established pursuant to Article 1 (commencing with Section 14010) of Chapter 3.
“Council” means the Arts Council established pursuant to Section 8751 of the Government Code.
“Creative work” means work directly relevant to the creation, development, production, and marketing of visual, performance, and literary art, including, but not limited to, painting, muralmaking, photography, music, performance art, acting, filmmaking, dancing, fashion design, graphic design, poetry, and all other forms of creative writing.
“Creative workers” means visual, performance, and literary artists, including, but not limited to, painters, muralists, photographers, musicians, performing artists, actors, filmmakers, dancers, fashion designers, graphic designers, poets, and writers.
“Earn and learn” has the meaning provided by subdivision (q) of Section 14005.
The council, in consultation with the board, shall design a grant program that meets the objectives enumerated in Section 14241.
The council shall consult with local governments, and community nonprofit organizations, educational institutions with arts programming, and workers, unions, and employers in relevant industry sectors on the design of the grant program.
Consistent with this chapter, the council shall adopt criteria, guidelines, and policies for the grant program.
The criteria guidelines, and policies shall be exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The council shall make the criteria, guidelines, and policies available to the public.
The council, in consultation with the board, shall oversee and administer the grant program, which shall be operated and implemented locally or regionally by program grantees, including, but not limited to, local government entities, cultural arts agencies, community nonprofit organizations, and other organizations operating a program that is consistent with the objectives enumerated in Section 14241.
The council shall specify and set aside a portion of program funds to be awarded to grantees to provide, either directly or through contract, earn and learn job training employment opportunities for students who have enrolled or completed a program in the arts, low-income or unemployed creative workers, and others with a demonstrated interest in, or commitment to, creative work in their communities.
Grantees awarded funds under this subdivision may serve as, or contract with, labor market intermediaries who will connect prospective program participants to employers with earn and learn job training employment opportunities that involve creative work.
Earn and learn job training employment opportunities for a creative worker shall be for a period of no less than 12 months and no more than 24 months.
Employment funded by the program shall pay a living wage in the regional labor market where the work is performed.
Creative workers shall be employed in jobs that provide opportunities, over the course of their enrollment in the program, to learn occupational skills relevant to jobs characteristic of the arts and entertainment industry.
Employment shall support creative workers in diverse projects, including, but not limited to, public artworks, musical and theatrical performances, and community documentation projects that lift up the voices of systemically marginalized populations and that reframe and reimagine the possibilities of defining a new California culture.
The program shall be structured so as to promote transition to unsubsidized employment at the time participants complete enrollment, with job placement in a living wage job serving as an important underlying objective of the program.
The council shall specify and set aside a portion of program funds to be awarded to grantees to create equitable opportunities for career exploration and participation in creative work for individuals and communities who have faced barriers to participation and employment in creative work as a result of low levels of public and private investment in the arts, limited exposure to arts programming, or other social or economic barriers to participation and employment in creative work. These efforts shall include providing grants to organizations serving veterans and individuals with employment barriers, as defined by subdivision (j) of Section 14005.
The council, in consultation with the board, may specify and set aside a portion of program funds to be awarded to grantees to provide other workforce services permitted under this division to unemployed, underemployed, and displaced creative workers.
The council, in consultation with the board, shall develop and implement a plan for grant program evaluation and shall specify the data to be collected to evaluate program efficacy, including all of the following:
Data pertaining to the demographic characteristics of program participants.
Data pertaining to employment barriers of individual program participants.
Data pertaining to the types of earn and learn job training programs in which participants enroll.
Data pertaining to any workforce services received during the period of program participation.
Data pertaining to outcomes, including labor market data, regarding the wages and employment of program participants after they exit the program.
The council shall require grantees, as a condition of receiving funding, to collect and remit all requisite data necessary to conduct program evaluation.
This article shall become operative upon the appropriation by the Legislature of sufficient funds for its purposes.
CHAPTER 5. Educational Services [14500. - 14530.]
Notwithstanding any other provision of law, when a person using his or her Workforce Innovation and Opportunity Act individual training account enrolls in an adult education program, a noncredit curricula program at a community college, or a regional occupational center or program, for which state funds are allocated, all of the following shall apply:
The entities administering the program may use Workforce Innovation and Opportunity Act individual training account funds only to increase the number of hours of services provided above their adult block entitlement pursuant to Section 52616 of the Education Code and funding limit for regional occupational center programs for the purpose of enhancing services already supported with state funds. Any state funds provided to these entities above their adult block entitlements and funding limit for regional occupational center programs shall be subject to an appropriation in the annual Budget Act.
Any state funds allocated to the entity administering the program shall not be offset with the Workforce Innovation and Opportunity Act individual training account funds.
The entity administering the program shall use the Workforce Innovation and Opportunity Act individual training account funds received for the program.
To the extent permitted by federal law, school districts and county offices of education are eligible to apply to local workforce development boards to provide basic skills training and skills necessary for attaining a secondary school diploma.
To the extent permissible under federal law, the Governor may set aside a portion of the youth funding specifically for programs to improve the academic skills of low-achieving youth and for dropout prevention activities.
CHAPTER 5.1. Community Economic Resilience Fund Program [14531. - 14531.]
There is hereby established within the Workforce Services Branch of the Employment Development Department, the Community Economic Resilience Fund Program, to build an equitable and sustainable economic recovery from the impacts of COVID-19 on California’s industries, workers, and communities, and to provide for the durability of that recovery by fostering long-term economic resilience in the overall transition to a carbon-neutral economy.
The branch shall administer the Community Economic Resilience Fund Program. The program shall be governed by the provisions of this chapter.
The program shall be administered by the Labor and Workforce Development Agency, the Office of Planning and Research, and the Governor’s Office of Business and Economic Development. These three agencies shall be referred to as the Inter-Agency Leadership Team and shall jointly be responsible for planning, oversight, and decision-making, including, but not limited to all of the following:
Identifying the geographic boundaries of regions in a way that prioritizes economic recovery and transition strategies and is consistent with other state definition of regional economic and labor markets.
Creating program guidelines and evaluation metrics.
Designing a competitive grant structure for CERF investments.
Developing technical assistance and evaluation infrastructure.
Tracking and reporting progress and deliverables.
Program implementation shall be undertaken by the Workforce Services Branch of the Employment Development Department under the direction of the Inter-Agency Leadership Team. It is the intent of the Legislature that CERF be designed to build a more robust, sustainable, and equitable recovery across all sectors of California’s economy and to provide for the durability of that recovery by fostering long-term economic resilience in the overall transition to a carbon-neutral economy.
The Inter-Agency Leadership Team, as established in paragraph (1), shall develop policies for grant funds distributed in this chapter that may fund regional programs and economic development strategies that directly complement state and federal infrastructure, climate, business, and workforce investments in multiple sectors, including housing, transportation, advanced energy, broadband, and natural resources, and connect, in each of those sectors, to any existing or emerging high road training partnerships. Policies and guidelines developed under this provision shall be made publicly available on the Labor and Workforce Development Agency’s internet website.
The Inter-Agency Leadership Team shall consist of the senior cabinet-level appointees, or their designees, representing the Labor and Workforce Development Agency, the Office of Planning and Research, and the Governor’s Office of Business and Economic Development, with policy guidance from subject matter experts within those state entities.
The Inter-Agency Leadership Team shall be supported administratively by the Office of Planning and Research. Administrative support shall include support for convenings, meetings, agendas, gathering, analyzing and communicating stakeholder input, and summarizing guidelines for solicitations and providing this policy guidance to the Workforce Services Branch. The Labor and Workforce Development Agency, the Office of Planning and Research, and the Governor’s Office of Business and Economic Development shall sign memoranda of understanding or inter-agency agreements for purposes of confirming each of their roles and responsibilities in the Interagency Leadership Team.
The representation on the collaboratives shall reflect the people and economy of the region and include balanced representation from labor, business, community, government, and other stakeholders, including, but not limited to, economic development, philanthropy, education, and workforce partners to be designated in the program guidelines.
Planning grants shall be awarded on a competitive basis to establish and support at least one High Road Transition Collaborative per region in areas that have had disproportionate impacts due to COVID-19. The Inter-Agency Leadership Team shall establish evaluation criteria consistent with the state planning priorities established pursuant to Section 65041.1 of the Government Code. The Inter-Agency Leadership Team shall establish additional criteria and detailed metrics in the program guidelines, consistent with the goals of the program outlined in subdivisions (b) and (c), including the following core activities:
Implementation grants shall be awarded on a rolling and competitive basis. This grant program shall be structured to provide a small initial tranche of funding for economic diversification pilots with demonstrable high road elements in those regions already engaged in economic recovery and transition planning. The majority of funds shall be used to provide, through June 30, 2028, economic development grants on a rolling basis, informed by the work of high road transition collaboratives.
The grant recipients shall demonstrate a plan to fully spend or obligate by June 30, 2028, all funds received pursuant to this subdivision, and shall pay all obligations by June 30, 2030.
The implementation grants shall also meet all of the following requirements:
Support work identified as a priority in the economic recovery and transition plan with the high road intent of this program.
Demonstrate support of the regional intermediary and alignment with the economic recovery and transition plan.
Support labor standards where applicable, such as prevailing wage, project labor agreements, or community workforce agreements.
Address geographic equity, accounting for differences in urban, suburban, rural, and tribal communities, and emphasize investment in underserved jurisdictions.
Organize strategies by industry or geography, or both, within and across regions, with the potential to focus on regionwide strategies or on one or more specific priority projects within a region.
Include a range of activities related to economic diversification, including, but not limited to, creating innovation hubs for key growth industries, expanding incubator or accelerator programs that provide technical assistance for small business owners to connect to larger industry clusters, and other projects and activities that advance a high road economy.
Coordinate with, advance, and complement, without supplanting, state and federal infrastructure investments.
Align with regional workforce needs by linking directly to high road training partnerships or high road construction careers training programs wherever such partnerships exist or emerge in the region.
The Labor and Workforce Development Agency, working with the Office of Planning and Research, and the Governor’s Office of Business and Economic Development, shall manage the design and operation of all program solicitation and award processes, including the administration of and accountability for both the planning and implementation grants. The Workforce Services Branch shall manage funds and contracts under direction of the Inter-Agency Leadership Team. This includes, but is not limited to, all of the following:
Solicitation, management and execution of all grants and contracts, based on guidelines developed by the Inter-Agency Leadership Team.
Oversight and monitoring for fiscal integrity.
Quarterly reporting to the Inter-Agency Leadership Team.
Beginning December 31, 2022, annual reporting to the Joint Legislative Budget Committee and the applicable Senate and Assembly budget subcommittees. The report shall include a detailed summary of grants awarded, fiscal compliance, and progress on individual program objectives and related high road metrics, including equity, inclusivity, job quality, and sustainability, as designated in program guidelines and determined by inter-agency program staff.
Commencing June 30, 2023, supplemental annual reporting to the Legislature, in accordance with Section 9795 of the Government Code, that includes a concise written discussion, based on the experience and expertise of the Inter-Agency Leadership Team and program staff, describing key findings on regional trends in sustainable economic recovery, and common challenges in the development and implementation of high road transition strategies.
Procurement of a comprehensive third-party evaluation to be completed, with guidance and oversight from the Inter-Agency Leadership Team, no less than six months after all available outcome data is available.
All CERF grantees shall fulfill the outcome and reporting requirements required by this chapter as established by the Inter-Agency Leadership Team and fiscal oversight by the Employment Development Department. In addition to and in alignment with paragraphs (4) and (5) of subdivision (f), these reporting requirements shall include:
A detailed analysis of grantee challenges and achievements, whether relating to convening an inclusive regional planning process, developing a comprehensive high road recovery plan, or implementing a strategy to promote long-term economic resilience within the region and to create high road jobs, while transitioning to a carbon-neutral economy. This shall include measurable progress toward target outcomes, including job creation, increase in number of jobs per region, average increases in hourly wages of entered employed individuals placed in jobs, job retention, number of individuals impacted through services, such as training, supportive services, or job placement, as enumerated in CERF guidelines and individual contracts in accord with each of the above jurisdictions.
A more general discussion of the challenges and opportunities of designing and implementing a high road transition vision in a particular place or industry. At a minimum, grantees shall report the number and types of stakeholders directly involved in CERF planning or project development, the nature and extent of their participation, and related efforts to build capacity among community, labor, local government, or other key stakeholder groups.
A portion of grant funding may be reserved for making planning and implementation grants to Native American tribes under criteria and conditions determined by the Inter-Agency Leadership Team and consistent with the purposes of the program. Tribes are intended to have maximum flexibility in the use of the funds and to use the funds to support tribe-led economic development projects. Applying for grant funds that are awarded pursuant to this subdivision does not preclude a tribal government or group of tribal governments from applying for other implementation grants awarded pursuant to this section.
For the purposes of this chapter, the following definitions apply:
“CERF” shall mean the Community Economic Resilience Fund Program.
“High road” has the same meaning as used in subdivision (r) of Section 14005.
“High road construction careers” has the same meaning as used in subdivision (t) of Section 14005.
“High road transition collaboratives” or “collaboratives” are broad-based regional groups convened by a skilled and impartial intermediary to plan for economic recovery and transition to a sustainable and equitable economic future. These collaboratives shall prioritize equity, sustainability, and job quality, and advance a shared prosperity where workers and communities across California’s diverse regions share equally in the benefits of a carbon-neutral future. Minimum membership and representation shall be as described in subdivision (c).
“High road training partnerships” has the same meaning as used in subdivision (s) in Section 14005.
Until July 1, 2025, the administering agency may authorize advance payments on a grant awarded under this section in accordance with Section 11019.1 of the Government Code.
All criteria, guidelines, and policies developed for the administration of the program shall be exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
This chapter shall become operative when an appropriation is made by the Legislature for the purposes of carrying out the provisions of this chapter. The branch shall post notice of the appropriation on the home page of its internet website and send notice of the appropriation to the Legislative Counsel.
DIVISION 8. California Green Collar Jobs Act of 2008 [15000. - 15003.]
This division shall be known, and may be cited, as the California Green Collar Jobs Act of 2008.
The Legislature finds and declares all of the following:
The State of California has long been a national and international leader on environmental, natural resource, pollution prevention, and energy issues, as well as recent landmark laws in the areas of climate change, renewable energy, energy efficiency, and alternative transportation fuels.
The passage of these laws has resulted in billions of dollars of investment capital flowing into the State of California for research, development, and commercialization of new green and clean technologies. This investment of capital is indicative of the rapidly growing clean and green technology sector of the California economy.
California’s green economy is about the potential of new technologies combined with innovative public policy and strategic investments to stimulate the growth of new markets for green products and services.
As the green economy grows, it will be accompanied by an increased demand for a highly skilled and well-trained “green collar” workforce.
California state government must act promptly to build the partnerships, expand the programs, and secure the resources necessary to meet our green workforce needs. This effort must involve both our K–12 and higher education systems, labor unions, the environmental community, workforce development programs, nongovernmental organizations, philanthropy, and private sector industries.
In acknowledgment of the tremendous size of California’s economy and related infrastructure, the application of sector strategies in a wide variety of industry sectors is essential to providing labor for industry and career paths for current and potential employees. The California Workforce Investment Board shall adopt a sector strategy approach in responding to industry sector workforce and economic development needs. This strategy will ensure industry has a qualified workforce and can offer opportunities for employment, training, and career advancement for all Californians. The initial drive of this sector strategy approach will be the California Green Collar Jobs Act of 2008.
The California Workforce Investment Board (CWIB) shall establish a special committee known as the Green Collar Jobs Council (GCJC), comprised of the appropriate representatives from the CWIB existing membership, including the K–12 representative, the California Community Colleges representative, the Governor’s Office of Business and Economic Development representative, the Employment Development Department representative, and other appropriate members. The GCJC may consult with other state agencies, other higher education representatives, local workforce investment boards, and industry representatives as well as philanthropic, nongovernmental, and environmental groups, as appropriate, in the development of a strategic initiative. To the extent private funds are available, is the intent of the Legislature that the GCJC will develop an annual award for outstanding achievement for workforce training programs operated by local or state agencies, businesses, or nongovernment organizations to be named after Parrish R. Collins.
As part of the strategic initiative, the GCJC shall focus on developing the framework, funding, strategies, programs, policies, partnerships, and opportunities necessary to address the growing need for a highly skilled and well-trained workforce to meet the needs of California’s emerging green economy. The GCJC shall do all of the following:
Assist in identifying and linking green collar job opportunities with workforce development training opportunities in local workforce investment areas (LWIAs), encouraging regional collaboration among LWIAs to meet regional economic demands.
Align workforce development activities with regional economic recovery and growth strategies.
Develop public, private, philanthropic, and nongovernmental partnerships to build and expand the state’s workforce development programs, network, and infrastructure.
Provide policy guidance for job training programs for the clean and green technology sectors to help them prepare specific populations, such as at-risk youth, displaced workers, veterans, formerly incarcerated individuals, and others facing barriers to employment.
Develop, collect, analyze, and distribute statewide and regional labor market data on California’s new and emerging green industries workforce needs, trends, and job growth.
Collaborate with community colleges and other educational institutions, registered apprenticeship programs, business and labor organizations, and community-based and philanthropic organizations to align workforce development services with strategies for regional economic growth.
Identify funding resources and make recommendations on how to expand and leverage these funds.
Foster regional collaboratives in the green economic sector.
The CWIB may accept any revenues, moneys, grants, goods, or services from federal and state entities, philanthropic organizations, and other sources, to be used for purposes relating to the administration and implementation of the strategic initiative, as described in subdivision (b). The CWIB shall also ensure the highest level of transparency and accountability and make information available on the CWIB Internet Web site.
Upon appropriation by the Legislature, the department may expend the moneys and revenues received pursuant to subdivision (c) for purposes related to the administration and implementation of the strategic initiative, and for the award of workforce training grants implementing the strategic initiative.
On or before April 1, 2011, and annually each April 1 thereafter, the CWIB shall report to the Legislature on the status of GCJC activities, grants awarded, and its development and implementation of a green workforce strategic initiative.
The GCJC shall also consult with the appropriate state and local agencies to identify opportunities to coordinate the award of grant and green workforce training funds received by the state under the federal American Recovery and Reinvestment Act of 2009 (Public Law 111-5) or any other funding sources.
DIVISION 9. CALWORKS PROGRAM: JOB CREATION [17000. - 17002.]
As used in this division “department” means the Employment Development Department.
Consistent with the ongoing relationships that the department maintains with private sector employers, the department shall encourage and organize the involvement of private sector employers and other community leaders in creating the necessary jobs for recipients of aid under Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code to move from welfare into unsubsidized employment.
In carrying out the provisions of this division, the department shall conduct activities including, but not limited to, the following:
Establish a council of corporate executives consisting of 13 members drawn from the business community including, but not limited to, retired or former chief executive officers of major California corporations. Seven members shall be appointed by the Governor, three shall be appointed by the Senate Committee on Rules, and three shall be appointed by the Speaker of the Assembly. Appointments shall be made no later than January 31, 1998. This council shall provide ongoing advice and assistance to the department in recruiting private employers to hire recipients of aid.
In consultation with the council described in subdivision (a), establish a clearinghouse for information on the Internet or other forms of toll-free communication for private sector employers to obtain information about assistance and resources for hiring CalWORKs recipients and to register their pledges to assist the state in finding the jobs necessary to meet the local welfare-to-work goals throughout the state.
In consultation with the council described in subdivision (a), provide a forum for leaders in the faith-based communities, as well as other civic leaders, to assist the state in promoting welfare-to-work goals as part of the civic duty of their constituents.
DIVISION 10. EMPLOYMENT ASSISTANCE FOR WORKERS WITH DISABILITIES [18000. - 18012.]
It is the purpose of this division to ensure that workforce preparation services provided through California’s one-stop centers, including information and services provided electronically, are accessible to employers and jobseekers with disabilities.
It is further the intent of the Legislature that one-stop centers provide appropriate services to individuals with disabilities to enhance their employability.
It is further the intent of the Legislature that, in order to achieve the goals specified in subdivisions (a) and (b), local workforce investment boards plan for and report on services to jobseekers and employers with disabilities, including the implementation of the federal Ticket to Work program for those local workforce investment boards and one-stop centers that choose to implement the Ticket to Work program in their local workforce investment areas.
Each local workforce investment board shall establish at least one comprehensive one-stop career center in each local workforce investment area. These one-stop centers shall ensure access to services pursuant to Section 134(d) of the federal Workforce Investment Act of 1998 (29 U.S.C. Sec. 2864(d)), including services for persons with disabilities, including, but not limited to, all of the following:
Outreach, intake, and orientation.
Initial assessments of skills, aptitudes, abilities, and need for support services.
Program eligibility determinations.
Information on the local, regional, and national labor market.
Information on filing for unemployment insurance.
Access to intensive services as needed, including, but not limited to, comprehensive and specialized assessments of skill levels and service needs, development of individual employment plans, group counseling, individual counseling and career planning, case management for participants seeking training services under subdivision (g), and short-term prevocational services, such as learning, communication, interview, and other jobseeking and work related skills to help prepare individuals for unsubsidized employment and training.
Training services, including, but not limited to, occupational skills training, on-the-job training, workplace training and cooperative education programs, private sector training programs, skills upgrade and retraining, entrepreneurial training, job readiness training, adult education, and literacy activities combined with training, and customized training.
The local workforce investment boards shall schedule and conduct regular performance reviews of their one-stop centers to determine whether the centers and providers are providing effective and meaningful opportunities for persons with disabilities to participate in the programs and activities of the centers and providers.
One-stop center counselor staff shall provide accurate information to beneficiaries of Supplemental Security Income and the State Supplemental Program and Social Security Disability Insurance on the implications of work for these individuals. The information shall include, but not be limited to, referrals to appropriate benefits’ planners. One-stop center counselor staff shall also provide accurate information to individuals with disabilities on how they may gain access to Medi-Cal benefits pursuant to Section 14007.9 of the Welfare and Institutions Code.
In order to ensure that one-stop career centers operated by local workforce investment boards meet the needs of workers and employers with disabilities, the Governor shall ensure that evaluations conducted pursuant to Sections 134 (a)(2)(B)(ii) and (v) of the federal Workforce Investment Act of 1998 (29 U.S.C. Sec. 2864(a)(2)(B)(ii) and (v)), address how local one-stop centers provide all of the following:
Full access to workforce development services for their disabled community.
Assistive technology to ensure access to services.
Staff training on assessment and service strategies for jobseekers and employers with disabilities.
Representation of the disability community in program planning and service delivery.
The development of regional employment networks to participate in the federal Ticket to Work program and the role of the local board and one-stop centers in the Ticket to Work program.
The California Workforce Investment Board shall report to the Governor and the Legislature by September 30, 2004, on the status of one-stop services to individuals with disabilities and implementation of the federal Ticket to Work program in California.
If permitted by federal law, the California Workforce Investment Board and local workforce investment boards shall include persons with disabilities or their representatives, with a particular effort to include such persons who are not employees of state or local government.
DIVISION 11. Fair Share from Big Corporations Act [19000. - 19000.5.]
This Division shall be known, and may be cited, as the Fair Share from Big Corporations Act.
The Legislature finds and declares all of the following:
Federal House Resolution 1 (Public Law 119-21) was passed on a partisan vote and signed by President Donald J. Trump on Independence Day, 2025.
H.R. 1 made the largest cuts to the Medicaid program in history.
H.R. 1 made these cuts in order to fund the largest tax breaks for big corporations in history, and those tax breaks amount to $900 billion in additional tax giveaways to profitable corporations at the expense of health insurance for low-income Americans.
H.R. 1 gave these tax breaks to corporations regardless of whether they pay their workforce poverty wages, forcing their workforce to turn to safety net programs such as the Medicaid program.
One of the most significant cuts in the Medicaid program, known as the Medi-Cal program in California, was a cut resulting from a new work and community engagement requirement.
Data shows that 92 percent of adults who receive Medicaid benefits are working and are getting paid poverty wages.
A 2022 Congressional Budget Office (CBO) report notes that, despite the rhetoric, work requirements are not likely to lead to increased employment unless paired with targeted work supports, such as childcare and transportation.
Being denied health care does not make anyone better at finding a job, keeping a job, or getting more hours at the job they already have.
Being threatened with losing health care does not help the millions of working adults who currently receive Medi-Cal benefits to increase their wages enough to afford nongovernment-funded health care or secure a job that has adequate health coverage.
A growing body of research shows a healthy workforce provides businesses with a competitive advantage.
When a big corporation relies on Medi-Cal to provide their employees with health insurance, they are relying on what amounts to taxpayer subsidies to gain the competitive advantage of a healthy workforce.
The Department of Finance and the Legislative Analyst’s Office have both reported that growing Medi-Cal costs are a leading factor in the state’s long-term structural deficit.
In large part due to the negative impacts of HR 1 on the state’s finances, the state can no longer afford to maintain current subsidies for big corporations in the form of paying full costs of their employees’ enrollment in the Medi-Cal program.
If HR 1 remains in effect, legislation will be considered as early as 2027 requiring big corporations to pay their fair share for their employees’ health insurance and reduce the taxpayer burden of big corporations’ employees being enrolled in Medi-Cal.
On or before March 1, 2027, the Department of Finance shall present to the Joint Legislative Budget Committee one or more options for holding the state’s largest corporations accountable for the taxpayer costs of their employees enrolled in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code).
One of the options presented by the department pursuant to paragraph (1) shall include a premium paid by employers with at least 250 employees to offset the taxpayer costs of their employees enrolled in the Medi-Cal program who are not offered employer health coverage.
Each option presented by the department pursuant to subdivision (a) shall include all of the following:
Data prepared by the Employment Development Department, the State Department of Health Care Services, or other state departments working in cooperation with the Department of Finance, to show or estimate the number of workers at the state’s largest corporations who are enrolled in the Medi-Cal program, and other available information pertinent to the option.
Proposed statutory language necessary to implement the option drafted by the Legislative Counsel Bureau.
An analysis of the cost of, and timeline for, implementing the option, assuming that the option is enacted into law during the 2027 legislative session.
If the Medicaid program-related provisions of Public Law 119-21, enacted on July 1, 2025, are repealed on or before March 1, 2027, this section shall not become operative.