California laws, regulations, and policies present many unusual challenges for payroll professionals, in part because California often puts groundbreaking laws and regulations on the books well ahead of the rest of the nation.
California Payroll Guide helps you understand the nuances to stay fully compliant in California. Here are just some of the distinct topics that are completely covered in California Payroll Guide:
- Paid family leave
- EZPAY your payroll tax deposit via credit cards
- Restrictions on divulging Social Security Numbers
- Recordkeeping requirements
- What to report on a pay statement
- Penalties
- Industrial welfare commission wage orders
- Independent contractor v. employee
- Waiting time penalty
- Payments subject to withholding
- Combined reporting
- How to handle multi-state employees
- SDI tax reporting
- Child and medical support
In addition, California Payroll Guide provides the many forms to help you comply with all payroll requirements:
- Payday notice
- Annual report of unclaimed personal property
- Quarterly adjustment form
- Application for transfer of reserve account
- Quarterly wage and withholding reports
- And many more!
The 2012 Edition of California Payroll Guide is designed to bring payroll professionals up to date on changes to California legislation, rulings, opinions, and court decisions. Highlights include:
- The EDD's new quarterly filing requirements began in 2011 with forms DE 9 and DE 9C to replace the DE 6 and DE 7 forms that were used to report unemployment tax, disability tax, and personal income tax as well as related wages paid. Use of these new forms is detailed and changes made to the compliance requirements are highlighted.
- California has its own understanding of who is a contractor and who is an employee. Learn how the rules differ and why for wage and hour, unemployment insurance, workers' compensation, and income taxes.
- California is a Wage Order state. Wage and hour rules are outlined by industry in the wage orders. Understand the purpose of each Wage Order so you can comply with the order for which your employees are covered.
- Step-by-step guidelines to ensure compliance with the California Division of Labor Standards Enforcement (DLSE) on alternative workweeks.
- Reporting requirements for unclaimed property/wages that walk through the new "due diligence" responsibilities after a federal court injunction.
- An explanation of the computer software professional exemption from overtime.
- Up-to-date California court interpretations of meals and rest period requirements.
- Rules regarding when final paychecks are due upon voluntary and involuntary terminations.
- A list and copies of the required worksite postings.
- Payroll checks need to be cashable in California and no bank fees are allowed. There are workarounds.
- Details regarding California’s position on conformity with federal rules and taxation on benefits.
- Details regarding the new law AB 469 (Chapter 655, Statutes of 2011), known as the Wage Theft Protection Act of 2011 and the provisions of the Act that became effective January 1, 2012.
- Effective January 1, 2012, SB 459 adds Sections 226.8 and 2753 to the California Labor Code. This ultimately provides additional assessment of civil penalties for misclassification of independent contractors.
- Details regarding the new requirements for employers paying commissions beginning January 1, 2013.
- 1. WHAT'S DIFFERENT
- Overview
- Quarterly Tax Filings and Elimination of Annual Filing
- California Continues to Step Up Payroll Audits and Using Federal Tax Information to Catch Compliance Failures
- California Mostly Conforms to Federal Tax Law and Now Mandates State Backup Withholding
- DLSE on the Lookout for Recordkeeping and Worksite Posting Violations
- DLSE’s Position on Debit Paycards and Convenience Checks
- Payroll Checks Need to Be Cashable in California Without Bank Fees
- California Supreme Court Considers Definition of “Employer” in Liability for Unpaid Wages
- Furloughs and Salary Reductions: DLSE Rules Salary Basis Test for Exempt Employees Not Violated
- Alternative Work Week Requires Satisfying Tough Compliance Rules; Other Labor Law Updates
- California Has Cal-COBRA Provision to Support Federal COBRA Subsidy
- Temporary Service Employers Have Unique Rules to Follow
- Separate EITC Notice Is Required Apart from Federal Tax Notice
- Disability Insurance Is Mandated
- Kin Care Law, Paid Family Leave, and Unpaid Military Spouse Leave
- DE 4 Used to Claim Benefit of Military Spouses Residency Relief Act
- Special Timing Rules for Paying Employees
- Workers’ Compensation Is Privatized
- Collection of Unclaimed Wages
- Rules for Meal and Rest Periods Improved, but Still Troublesome
- Garnishment Allowed in 2012 for Elder, Dependent Adult Financial Abuse
- More Holidays Are Observed in California
- California Concerned About Privacy of Employees
- 2012 Minimum Wage
- When a Business Closes
- New Hire Reporting
- Mandatory Pay Stub Information
- Doctrine of “Peculiar Risk”
- Travel Time Can Hold Liabilities for Employers
- California Recognizes Domestic Partners and Same-Sex Marriages Performed on or After June 16, 2008, but Before November 5, 2008
- San Francisco’s Mandated Commuter Benefits, Paid Sick Leave, Health Care, and Other Matters
- New Wage Theft Protection Act of 2011
- New SB 459 Willful Misclassification of Independent Contractor Penalties
- Commission Payment Requirement Due January 1, 2013
- 2. HOW TO PAY
- Administration
- FLSA and California
- How to Track Hours Worked
- Wage and Hour Recordkeeping Requirements
- Worksite Posting Requirements
- Methods to Pay Employees
- When to Pay Employees
- Paying Terminated Employees
- Paying Deceased Employees
- Pay Statement Requirements
- Jury Duty and Time Off to Vote Requirements
- Unclaimed Wages
- What Are the Legally Challenging Areas?
- Frequently Asked Questions
- 3. WAGE AND HOUR
- Administration
- Discrimination Laws
- Fair Labor Standards Act Coverage
- FLSA Exemptions
- California Standards
- Minimum Wage
- Child Labor Laws
- Overtime
- Industrial Welfare Commission Wage Orders
- Hours Worked
- Time Off
- Meal Periods
- Rest Periods
- Travel Time
- Education and Training Time
- Make-Up Time
- Deductions
- Independent Contractor vs. Employee
- Severance Pay: Final Pay-Waiting Time Penalty
- WARN Act: Closings and Layoffs
- Other Penalties
- Alternative Workweek Arrangements/Schedules
- List of Worksite Postings
- 4. INCOME TAX WITHHOLDING
- Overview: California Is a Combined Filing State
- Administration
- California Mostly Follows Federal Tax Rules
- Which Employers Are Covered
- How to Register as an Employer
- Who Are Covered Employees
- Resident and Nonresident Employees
- Payments Subject to Withholding
- Payments Not Subject to PIT Withholding
- Stock Option Rules
- Employees' Withholding Allowance Certification: W-4 and DE 4
- When Employee Claims No Tax Liability
- How to Withhold
- How and When to Deposit Payroll Taxes (PIT, UI, SDI, and ETT)
- What to File (PIT, UI, SDI, and ETT)
- Corrections and Adjustments (Form DE 938 or DE 678)
- Statements to Employees (Forms W-2)
- EITC Notice to Employees
- Recordkeeping
- Penalties and Interest
- If You Have a Problem
- Some Information on Reporting Forms 1099
- Annuity, Retirement, and Pension Payments
- Withholding on Contractor Fees, Rentals and Royalties to Nonresidents
- State Backup Withholding Guidelines
- 5. UNEMPLOYMENT INSURANCE
- Administration
- Covered Employers
- Covered Employees
- Taxable Wages
- Exempt Wages
- Reserve Ratio Experience, Rating Method, Contribution Rates, and Surcharges
- Filing and Deposits
- Multistate Employees
- Federal Unemployment Tax Act (FUTA) Certification
- UI Benefits
- Responsibilities When Laying Off Employees
- Recordkeeping
- SUTA Dumping
- Fraud
- UI Cost Controls
- 6. STATE DISABILITY INSURANCE
- Administration
- Which Employers Are Covered
- Types of SDI Plans
- Who Are Covered Employees
- Who Is Eligible for SDI Benefits
- Paid Family Leave
- Tax Rate and Taxable Wages
- Withholding Calculations
- Filing and Deposits
- FAQs on SDI
- 7. WORKERS' COMPENSATION
- "No Fault" Environment
- Administration
- Covered Employers
- Covered Employees
- Elective Coverage
- Insurance Policies
- Premium Calculations
- Multiple Ownership and Changes in Ownership
- Terminating Coverage
- Worksite Posting Requirements
- Recordkeeping
- Benefit Types
- Claims Process and Other Employer Responsibilities
- Fines and Penalties
- 8. EMPLOYMENT TRAINING TAX
- Administration
- Covered Employers
- Covered Wages
- Tax Rate
- How and When to Deposit
- What to File
- 9. BUREAU OF LABOR STATISTICS MULTIPLE WORKSITE REPORTING
- Administration
- Mandatory Reporting
- 10. WAGE GARNISHMENTS
- Administration
- Priority
- Child Support
- Medical Support
- Federal Tax Levies
- State Tax Levies
- Other State Levies and Creditor Garnishments
- Bankruptcy
- Student Loans
- Employee Requested Wage Assignments
- 11. NEW HIRE REPORTING
- Administration
- Who Must Report
- What to Report
- When to Report
- How to Report
- Independent Contractors
- What Happens If Employees or Contractors Are not Reported
- 12. SAN FRANCISCO PAYROLL EXPENSE TAX, MANDATORY SICK PAY, AND HEALTH CARE ACCESS PLAN
- Payroll Expense Tax
- Minimum Wage Requirement
- Paid Sick Leave
- Health Care Security Ordinance
- Pre-tax Commuter Benefits
- 13. LIVING WAGES
- Berkeley and the Berkeley Marina
- Davis
- Fairfax
- Hayward
- Los Angeles
- Los Angeles County
- Marin County
- Oakland
- Oxnard
- Pasadena
- Petaluma
- Port Hueneme
- Richmond
- Sacramento
- San Diego
- San Fernando
- San Francisco
- San Jose
- San Leandro
- Santa Barbara
- Santa Cruz and Santa Cruz County
- Santa Monica
- Sebastopol
- Sonoma
- Ventura
- Ventura County
- Watsonville
- West Hollywood
- Appendix A: PUBLICATION DE 44, CALIFORNIA EMPLOYER'S GUIDE 2012
- Appendix B: WITHHOLDING SCHEDULES FOR 2012
Valerie
Alexander-Bailey
Valerie Alexander-Bailey, CPP, has spent the past 15 of her 25 years in the payroll industry working as Payroll Manager for McClatchy Newspapers, Operations Manager for Oracle Corporation, and Director of Human Resources for Lakemont Homes.
Valerie developed the Payroll Administration Certificate Program at California State University, Continuing Education, Sacramento. This program provides a section on California Payroll Administration. Valerie continues to be an adjunct instructor and advisor for the program, which helps develop those who wish to become payroll professionals in addition to prepare for the American Payroll Association’s Certified Payroll Professional and Fundamental Payroll Certificate exams and earn Continuing Education Credits.
Valerie is active with the American Payroll Association with her roles with the National Speakers Bureau and Board of Advisors. She provides ongoing support for her local chapter by serving on its executive board.
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