California Employer News and Updates

As an employer, you play a vital role in the success of both the New Employee Reporting and Independent Contractor Reporting programs. California matches Independent Contractor Reporting and New Employee Registry reports against child support records to help locate parents in order to establish wage withholding orders or enforce existing orders. The information is also sent to the National Directory of New Hires to locate delinquent child support debtors in other states. Nearly 30 percent of child support cases involve parents who do not live in the same state as their children.

As part of the New Employee Registry (NER) program, all employers are required by law to report new hires, or employee(s) rehired after a separation of 60 consecutive days, to the Employment Development Department (EDD) within 20 days of their start-of-work date, .

As part of the Independent Contractor Reporting (ICR) program, you are required to report independent contractor information to the EDD if you hire an independent contractor and all the following conditions apply:

• You are required to file a Form 1099-MISC or 1099-NEC for the services performed by the independent contractor.
• You pay the independent contractor $600 or more or enter into a contract for $600 or more.
• The independent contractor is an individual or sole proprietorship.

For more information on the new hire and independent contractor programs or the reporting requirements, please visit edd.ca.gov/Payroll_Taxes/Reporting_Requirements.htm.

For information on how to make payments to the California State Disbursement Unit, please visit childsupport.ca.gov/state-disbursement-unit/.

We‘ve updated our online services for employers for improved usability and added security.  The following are the enhancements we’ve made:

• Employer Services Online:
  • Redesigned with a new look and feel for an improved flow and design.
  • Added a new password indicator feature to let you know in real time if you meet the requirements for creating a secure password.
• e-Services for Business:
  • Enhanced the security questions for employer account access to protect your account from unauthorized access.

To better assist you with these changes, we’ve updated our enroll as an employer and enroll as representative webpages that include step by step instructions for enrolling in e-Services for Business. You can also view our e-Services for Business tutorials for further guidance.

Effective January 1, 2024, Senate Bill (SB) 951 removes the taxable wage limit and maximum withholdings for each employee subject to State Disability Insurance (SDI) contributions. The SDI rate for 2024 is 1.1%, for more information visit Rates and Withholding.

You will receive your Notice of Contribution Rates and Statement of Unemployment Insurance (UI) Reserve Account (DE 2088) for the period of January 1, 2024, to December 31, 2024, by December 30, 2023. Carefully review all items on the DE 2088 as it informs you of your 2024 UI contribution rate, whether you are subject to Employment Training Tax (ETT), and all UI reserve account activity. For more information about the DE 2088 and your protest rights, see the reverse side of your DE 2088. You can also refer to the Explanation of the Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088C) or contact the Employment Development Department (EDD) at 1-888-745-3886. For 2024, the UI taxable wage limit and the ETT taxable wage limit is $7,000 per employee. The ETT rate will remain at 0.1 percent (.001).

The State Disability Insurance (SDI) withholding rate for 2024 is 1.1 percent. Effective January 1, 2024, Senate Bill 951 removes the taxable wage limit and maximum withholdings for each employee subject to SDI contributions. New and updated DE 2088 notices issued to employers after May 6, 2022 no longer display the SDI rate. Instead, the DE 2088 includes an EDD website link where employers can find the SDI information. Visit Tax-Rated Employers (ca.gov) for more rate information.

Recent changes were made to employer registration requests in e-Services for Business to enhance account security. Please ensure you provide accurate and up to date information as the EDD will contact you when necessary to obtain additional information. Employer registration requests can take up to ten business days to process. More time may be needed for complex requests, accounts with tax exemptions, or specialized coverage. Visit Am I Required to Register as an Employer for more information on the registration process.

The Disability Insurance Elective Coverage (DIEC) program is available to small-business owners, entrepreneurs, independent contractors, and self-employed individuals who want Disability Insurance (DI) and Paid Family Leave (PFL) coverage. Individuals must meet eligibility requirements to apply for the program. Under DIEC, individuals receive up to 39 weeks of DI benefits for their own illness, injury, disability, or pregnancy. PFL benefits are available for up to 8 weeks in a 12 month-period and may be used to provide care to a seriously ill or injured family member, to bond with a new child entering the family, and to participate in a qualifying event because of a family member’s deployment to a foreign country. For more information about DIEC, please visit the Disability Insurance Elective Coverage webpage.

Interested in learning more about SDI? Sign up for one of our free, interactive webinars by sending an email to DIBOutreach@edd.ca.gov. Webinars are held the second Wednesday of every month from 10 a.m. to 11 a.m. Pacific time (PT) or available by appointment. *