The 2021-22 Budget: Interest Payment on Federal Unemployment Insurance Loan

Feb 10, 2021 - UI Program Is Financed With Payroll Taxes Paid by Employers. Employers pay both state and federal UI payroll taxes. State UI tax revenues are deposited into the state ’s UI trust fund to pay benefits to unemployed workers.
https://lao.ca.gov/Publications/Report/4360

The 2020-21 Spending Plan: Labor and Employment Issues

Oct 5, 2020 - The department requested resources for AB  5 because its payroll tax auditors must determine if a worker is an independent contractor or an employee. Funds will be used to train auditors to apply the new test and hire auditors to prepare audits for additional employer appeals that are expected as a result of the law.
https://lao.ca.gov/Publications/Report/4274

The 2020-21 Budget: Labor Agreements to Achieve Budgetary Savings

Sep 9, 2020 - The pay that employees receive in a typical pay period —salary plus EDWC —affects employee pension benefits and is subject to Medicare payroll taxes. (Employees in specialty classifications represented by Unit 8 —including foresters, forestry aids, and fire prevention specialists —are compensated more similarly to other state employees based on a 40-hour workweek.)
https://lao.ca.gov/Publications/Report/4267

State Options to Expand Unemployment Benefits

Apr 9, 2020 - Weekly benefit amounts could be set based on each worker ’s most recent tax return or other proof of income. In many cases, however, ineligible workers have no way to show prior earnings. This likely is true for undocumented workers who work informally and do not file income tax returns using an Individual Tax Identification Number.
https://lao.ca.gov/Publications/Report/4219

Federal Paid Leave for Workers Impacted by COVID-19

Mar 27, 2020 - Recent guidance from federal tax agencies and the Department of Labor seeks to minimize this concern. Typically, businesses are required to withhold (from employee paychecks) federal income taxes and the employee’s share of Social Security and Medicare payroll taxes, and submit those payroll taxes at the end of each quarter.
https://lao.ca.gov/Publications/Report/4212

COVID-19: Unemployment Insurance for Workers Impacted by COVID-19

Mar 23, 2020 - To fund the benefits, employers pay a payroll tax on the first $7,000 of employee wages. The payroll tax rate is based on the employers “experience rating, ” in which the tax rate is higher for employers who have had many UI claims in the past and lower for employers with fewer claims.
https://lao.ca.gov/Publications/Report/4208

The 2020-21 Budget: Staffing to Address New Independent Contractor Test

Feb 11, 2020 - Based on supplementary information we requested from the administration, we know that the proposal includes funding for 20 tax auditor positions, most of whom would work additional payroll tax appeals related to AB  5.
https://lao.ca.gov/Publications/Report/4151

The 2020-21 Budget: Overview of the Governor's Budget

Jan 13, 2020 - Recently, corporation tax collections have grown faster than anticipated while personal income tax collections have grown somewhat slower. The administration assumes that this pattern will continue. This is because they attribute the pattern to partnerships, which are taxed under the personal income tax, changing to corporations in response to 2017 federal tax changes.
https://lao.ca.gov/Publications/Report/4135

The 2019-20 Budget: California Spending Plan—Other Provisions

Oct 17, 2019 - In addition to lengthening the duration of leave, the spending plan also reduces the reserve requirement for the Disability Fund, which co llects payroll taxes and pays disability and paid family leave benefits, from 45  percent of disbursements to 30  percent of disbursements.
https://lao.ca.gov/Publications/Report/4101

The 2019-20 Budget: Overview of the Governor's Budget

Jan 14, 2019 - Based on the recent federal approval of a similar tax in Michigan, federal approval of a reauthorized California MCO tax appears likely. Despite this development, the administration did not propose an extension of the MCO tax in 2019 ‑20, forgoing over $ 1  b illion in General Fund benefit.
https://lao.ca.gov/Publications/Report/3916