|
From
the Los Angeles Daily Journal
"Paper Proof -- Employers must
report all hirings and firings to the state
Employment Development Department" by
Richard S. Rosenberg
Law firms have certain
reporting and notice requirements which must be
fulfilled every time an employee is hired, let
go (regardless of the reason), or goes on a
leave of absence. These reporting requirements
are detailed in the California Unemployment
Insurance Code and regulations of the California
Employment Development Department. Although
compliance is easy, the failure to follow these
rules can subject the firm to civil penalties,
and in some case, is a crime.
New Employee
Registry Reporting.
All new hires must be reported to the State's
Employment Development Department ("EDD")
within twenty (20) days of the start of work
under California's New Employee Registry
Program. California Unemployment Insurance Code
Section 10885. This program covers even
part-time and temporary hires. If the employee
completes a W-4, a report is required. This is
so even if the employee works only a few days.
The impetus behind this regulation has nothing
to do with employment per se. According to EDD,
children of child support debtors often become
dependent on public assistance (welfare) because
a parent fails to provide the requisite
financial support as obligated. The primary
purpose of the program is to increase child
support collections and reduce the dependence of
families of child support debtors on various
state and federal public assistance programs.
New Employee Registry reports are matched
against child support records to help locate
parents who are avoiding payment obligations so
that a wage withholding order can be established
or an existing support order can be enforced.
Also, the program is supposed to detect and
prevent fraudulent unemployment and workers'
compensation payments through more timely
detection of ineligible claimants.
Firms using payroll
services or programs should double check with
these services to determine whether the payroll
services is handling the necessary New Employee
Registry reporting. Although many payroll
services have reporting programs in place, the
obligation to report ultimately rests with the
firm. If the payroll service is handling this
obligation, it is recommended that the firm
obtain written confirmation to this effect.
Consider also obtaining an indemnity agreement
from the payroll service in the event of a slip
up on their part. Below are some guidelines from
EDD regarding this reporting obligation:
Who has to report?
All employers in California must
report.
Which employees
must be reported?
Every newly-hired (or rehired employee)
must be reported. This includes employees,
regardless of age or projected wages, who work
less than a full day, are part-time employees,
are seasonal employees, or who discontinue their
employment prior to the 20th day of employment.
A rehire occurs when the
employment relationship ended and the returning
individual is required to submit a new W-4 form
to the employer.
What information
must be reported?
Employee's full name, address, social
security number, and start-of-work date.
Employer's name, address, California Employer
Account Number, and Federal Employer
Identification Number ("FEIN").
How is the report
made?
Employers may use the EDD reporting
form DE 34; or
A copy of the employee's W-4 form, so long as
the employee's start-of-work date and the firm's
California employer account number are indicated
on the W-4; or
Alternative equivalent
format such as other hiring documents; or
Magnetic or electronic media.
When must the
report be made?
New hires or rehires must be reported
within 20 days of their start-of-work date.
Employers filing magnetically or electronically
must report by two monthly transmissions which
are not less than 12 days or more than 16 days
apart.
What if the firm
employs individuals in more than one state?
Multi-state firms that file
magnetically may elect to report all new hires
to one state in which they have employees. This
election can be made any time by notifying the
federal Department of Health and Human Services'
Office of Child Support Enforcement.
What if an
employee works in California, but does not live
in California?
Employers must report all employees who
work in California, regardless of where they
live.
Is there a penalty
if the report is late?
Yes. The Employment Development
Department may assess a penalty of $24 for each
failure to report a new hire, or $490 if the
failure is the result of conspiracy between the
employer and the employee not to supply the
required report or to supply a false or
incomplete report.
Where is the
report filed?
Mail: Employment Development Department
P.O. Box 997016, MIC 23
West Sacramento, CA 95799-7016
Fax: 916-255-0951
How can the firm
obtain additional information?
The Employment Development Department
has established the New Employee Registry
Hotline at 916-657-0529. EDD also has a website
(www.edd.ca.gov/txner.htm)
with further information. You may also download
the required forms.
Departure
Notices. Pursuant to Title 22,
Section 1089-1 of the California Civil Code of
Regulations, the firm must also follow certain
requirements in the case of every employee
departure. Notably, this includes even temporary
departures, such as a leave of absence. The
Regulation requires employers to give
written notices to any employee who is
discharged, laid off or even placed on a leave
of absence. Employers who fail to comply with
these notice requirements may be suspect to a
fine and could be guilty of a misdemeanor as
well. The following is a summary of the required
communications:
First, the firm
must provide each affected employee with an EDD
pamphlet entitled "For Your Benefit:
California's Program For The Unemployed."
This pamphlet informs employees of the EDD's
unemployment insurance and disability insurance
programs. Copies of these pamphlets are
available from the EDD, which provides them to
employers free of charge. The pamphlet should be
provided no later than the effective date of the
action.
Second, the firm
must post and maintain in places readily
accessible to all employees an EDD Form entitled
"Notice to Employees." This notice
informs employees of their rights to
unemployment insurance and disability insurance.
Copies of this form are also available from the
EDD at no cost.
Third, the
employer must give the employee a written
notice regarding the employee's change in status
no later than the effective date of the
discharge or layoff or the start date of the
leave of absence. The notice also must contain
the following information, at a minimum: (1) the
employer's name; (2) the employee's name; (3)
the employee's Social Security account number;
(4) whether the action was a discharge, layoff,
leave of absence or change in status from
employee to independent contractor; and (5) the
effective date of the action. The firm may
obtain a sample notice which satisfies these
requirements directly from the EDD or the firm
can develop its own notice, provided all five of
the required elements appear in the notice.
|
Rules
of Employment
