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Employment Development Department
Employment Development Department

Completing Benefit Audit Forms

General Information

Someone familiar with your payroll records should complete the Benefit Audit (DE 1296B) and New Employee Registry (NER) Benefit Audit (DE 1296NER) forms. Both forms request similar information; however, the forms are in different formats. The table below shows the differences between the two forms.

Characteristics of Benefit Audit, DE 1296B:

Characteristics of NEW Benefit Audit, DE 1296NER:

For each week listed on the audit, report the gross wages earned for the period worked and the type of earnings. Gross Earnings/Wages = Hours Worked x Rate of Pay. If the claimant was paid at piece rate, then report the amount earned in that specific week. Enter "NONE" or "0" if the employee did not work during the week(s) listed.

If the employee was paid on a bi-weekly, semi-monthly, monthly, or an irregular schedule, please provide a breakdown of when the gross wages were earned during the weeks listed. If this is not possible, provide the best breakdown you can and explain how you reported the wages on the form. The goal is to get a weekly breakdown of the claimant's gross earnings since this is how the EDD pays UI benefits to claimants. (See specific pay types (#7) for more information.)

Dates of Work

Benefit Audit (DE 1296B)

NER Benefit Audit (DE 1296NER)

Weekly Instructions

Claimants are required to report weekly gross earnings when they earn money, not when it is paid. You may have a different pay period, but we need you to break the earnings down to our weeks so we can verify if they were reported accurately when UI benefits were claimed. You must enter the earnings for the weeks listed, not the amounts paid in those weeks. Holiday pay and vacation pay should be included. (See other pay types.)

Enter the earnings for your employee for a period of one week at a time. Attaching your payroll records does not provide the information we need. We need to be able to put the work and earnings in the seven-day period from 12:01 a.m. Sunday to midnight Saturday. If your week does not run the same, please provide the best breakdown you can and explain how you reported the gross wages on the form.

Different Week

Our week ends Saturday midnight. If your week does not end on Saturday, take the hours/earnings from different pay period(s) and fit them to the Sunday-Saturday week. For example: If your pay period ends on Wednesday, add Sunday-Wednesday's wages from one pay period to Thursday-Saturday's wages of the next pay period. Enter the total gross wages in the appropriate calendar week on the audit.

If your payroll does not coincide with our weeks, please use one of these two methods for providing the information:

  1. Calculate the hours worked and gross earnings by noting the dates actually worked and then computing gross earnings per our week as listed on the form. (This is the preferred method for providing the requested information.) The DE 1296NER requires you to circle the days worked on the form for the week(s) listed.
  2. If the method for providing work/earnings listed in Item 1 above cannot easily be done, prorate the claimant's gross earnings by arriving at claimant's average earnings per day and multiplying that by the number of days worked in the week we have listed. Please explain the method you used for reporting this information.

Night Shift Workers

The UI week ends at midnight each Saturday. Therefore, if a worker begins a night shift on Saturday night and finishes on Sunday morning, the gross earnings must be separated into two different weeks. Include the hours worked on Saturday (until 12 a.m.) with one week and the hours after midnight in the next week.

Hours or Days Unknown

You should have a record of hours worked because the EDD, among other agencies, requires reporting of hours worked. Please provide the gross earnings per week (when earned, not when paid), using the hours and days worked.

Pay Types

Daily Pay

If you keep daily time records, you can determine what to put on the audit form by adding hours/earnings from the daily records and fitting them to the EDD UI week. We realize this can be time-consuming. If necessary, you may send copies of clearly marked daily time records, including the hourly rate of pay, and we will complete the weekly entries; however, if you can do the calculations yourself, we would appreciate it.

If you do not keep daily records of time worked and have only the amounts earned by pay period, prorate the earnings in order to allocate them to a week of work. Provide any information you do have to the EDD in the form of clearly defined computer printouts or notations on a separate piece of paper.

Bi-Weekly Pay

Enter the gross amount of wages earned in each individual week. Entering two-week wage totals every other week on the audit form may give a false indication that the claimant was incorrectly paid benefits. This often results in requests for detailed payroll documentation and can cause more work for you.

It is important to break down the workdays and earnings into weekly increments. Why? While claiming UI benefits, claimants report wages when earned, not when payment is received. We pay UI benefits weekly, so we need to look at earnings and eligibility issues on a weekly basis. For instance, did the claimant work over 40 hours? Did the claimant earn over his or her weekly benefit amount? Was the claimant available for full- and part-time work? Also, the employee might not work the same shift and make the same amount of money each week. In such cases, dividing the pay period by two is not accurate and may not be fair to the claimant.

If you keep daily time records, add the hours and gross earnings for each Sunday through Saturday week and enter the totals for each week.

If you do not keep daily records of time worked and have only the gross amounts earned by pay period, prorate the earnings in order to allocate them to a week of work. For example:

September 4 - September 17 = $405.20
September 18 - October 1 = $623.02

On the DE 1296NER, circle the days worked and note the dates included in the pay periods, hours worked, and the gross earnings amount for each of those periods.

Semi-Monthly Pay

If you keep daily time records, add the hours and gross earnings for each Sunday through Saturday week and enter the totals for each week.

If you do not keep daily records of time worked and have only the gross amounts earned by pay period, prorate the earnings in order to allocate them to a week of work. For example:

May 1 - 15 = $623.00
May 16 - 31 = $784.00

On the DE 1296NER, circle the days worked and note the dates included in the pay periods, hours worked, and the gross earnings amount for each of those periods.

Monthly Pay

If you keep daily time records, add the hours and gross earnings for each Sunday through Saturday week and enter the totals for each week.

If you do not keep daily records of time worked and have only the gross amounts earned by pay period, prorate the earnings in order to allocate them to a week of work. Also note on the form the gross earnings amount for each monthly pay period. Please include the dates, showing when each ended. For example:

May 1 - 31 = $1,500.25
June 1 - 30 = $1,326.07

Contract Pay/Stipend

If you pay on a contract basis, provide the total gross dollar amount of the contract and the beginning and ending dates of the work performed. For example: "Coached football from August 11, 2003, through November 15, 2003, for a total of $1,700."

Severance Pay

Report severance pay on the audit by circling the "S," even if this individual is permanently separated from your employment and this is a settling of accounts. Indicate on the audit if the worker had to perform some service, such as remaining available for recall, or meet some other requirement to receive the pay. Please note the last day actually worked.

Vacation or Holiday Pay

Report vacation or holiday pay separately from regular earnings by circling the "V" or "H" on the audit (see #5 on DE 1296NER example). The individual's last day worked is important if he or she is permanently separated from your employment and "cashed out" accrued vacation. If the individual is not permanently separated, several factors will decide whether the vacation pay affects his or her eligibility for benefits.

Sick Pay

Report sick pay if the person was still your employee. Report the sick pay separately from regular earnings. Identify the amount that was sick pay by circling "O" on the audit and noting "Sick Pay" in the "Other" area. The individual's last day worked is important if he or she is permanently separated from your employment and "cashed out" accrued sick leave. If the individual is not permanently separated, several factors will decide whether the sick pay affects his or her eligibility for benefits.

Commission Pay

If an employee is paid on a commission basis, please indicate the time period when the work was done to receive the commission. Indicate on the audit if the individual is a full-time, part-time, or on-call employee and if the employee knew the amount of the commission at the time the work/sale was performed.

Pay may be commission only. Like other earnings, commissions need to be allocated to the Sunday through Saturday week. If the individual knew the amount of the commission at the time the services were performed, report the commission when earned. If the individual did not know the amount of the commission at the time the services were performed, report the commission when paid. Use sales records or other means to determine what period is covered by the commission payment.

Pay may be commission plus wages. Report commissions separately from regular earnings. Refer to the above criteria for reporting commissions. Then add the weekly commission to the weekly gross wage amounts. Make a note on the audit form, and circle the "RE" and "C" on the audit form so that we know that commissions were included.

Tips/Gratuities

If an employee received a base salary and tips, please indicate the total amount of the gross earnings for the week. Tips must be allocated to the week they were earned, just like wages. Please indicate on the audit form if the tips were table tips or banquet tips.

If daily records are kept of the tips the person received, add those amounts to the Sunday through Saturday week along with the other gross earnings. If records of tips were not kept on a daily basis, you will need to assign them to the week in which you believe they were earned and provide any information you do have to the EDD. Then add the tips to the weekly gross wage amounts. Make a note on the audit form, circle the "RE" and "O" on the audit form, and note the type of tips they were so that we know tips were included. For example:

Tips for May 1 - 15 = $112.50 (table tips) + $250.00 (base salary for period)
May 16 - 31 = $95.00 + $250.00

Bonuses

If an employee received a bonus, please indicate the time period the bonus covered and what basis was used to determine the bonus, such as length of service or amount of production. Make a note on the audit form, circle the "RE" and "O" on the audit form, and note "Bonus" in the "Other" area.

Bonuses for production or performance must be included in gross earnings. They should be allocated over the entire period covered by the bonus. If you are not sure in which week a bonus should be included, tell us the amount of the bonus, what period it covered, and when it was actually paid. For example:

January 1 - December 31 = $500.00
October 15 - December 15 = $100.00

Separations From Work

Briefly explain the reason for separation.

Missed Work Opportunities/Refused Work

If the employee missed an opportunity to work or refused work during any week, please indicate that on the form or on a separate page. Provide the date the work was refused, the date(s) of the missed period of work, and if the person gave a reason for refusing the work.

Comments

Comments may include additional information not easily provided elsewhere on the form. Do you need to explain something further? Are there other issues, such as availability, refusals of work, or self-employment? Let us know so we can investigate. You are our best source of information. Any additional information can be written on the back of the audit form or included on a separate sheet of paper.

Basic Example

We need the exact gross earnings information for our UI benefit week(s). If you don't have daily records, you need to explain how you calculated and accounted for dates.

In the example below, the claimant worked often but not regularly. The gross earnings were based on $12.00 per hour. The employer completed the DE 1296NER using the following steps:

  1. Circled the days worked each week.
  2. Calculated the hours worked each day, and entered the total number of hours worked for the week.
  3. Multiplied the claimant's hourly pay rate by the number of hours worked during the week to get gross earnings for the week: $12.00 (hourly rate) x 24 hours = $288.00

DE1296NER

Monthly Example

In the example below, the employer paid a monthly salary. The employer completed the DE 1296NER using the following steps:

  1. Circled the days worked each week.
  2. Divided the individual's gross earnings for the monthly payroll period by the number of days in the pay period. For the month of April, the employer divided the monthly salary by 30 days.
  3. Multiplied the calculated daily rate by the number of days in the week.
  4. Entered gross earnings and hours for each week on the form.

DE1296NER

Monthly salary is $2,600.00. Weekly gross earnings are $2,600.00 divided by 30 (days in the month), which is $86.67 per day, x 7 days, which is $606.67 for the week. In this example only three weeks were claimed during that month.

FAQs – Benefit Audits