Sick Pay, Payroll Taxes and other effects on California Employers

Employers statewide directly affected by the new coronavirus (COVID-19) may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC).



Delay of EDD payroll tax payment


From the Employment Development Dept:

Employers statewide directly affected by the new coronavirus (COVID-19) may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). A written request for extension must be received within 60 days from the original delinquent date of the payment or return.


This directive may be slightly helpful, but most employers have already processed most or all of Jan-March payroll and have deposited their payroll taxes, so the benefit is very minimal unless the State extends this into the 2nd quarter of 2020.


Stay the course with EDD Work Sharing

https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm


Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.


The Work Sharing Program helps employees whose hours and wages have been reduced:

  • Receive UI benefits.

  • Keep their current job.

  • Avoid financial hardships.

The Work Sharing Program helps employers:

  • Minimize or eliminate the need for layoffs.

  • Keep trained employees and quickly prepare when business conditions improve.

  • Avoid the cost of recruiting, hiring, and training new employees.


Here’s a good article with detail about the topic:

https://www.calpeculiarities.com/2020/03/18/covid-19-staying-the-course-with-edd-work-sharing-program/


Here’s some Labor Law information:

  • Final paychecks do NOT have to be issued for employees ‘furloughed’ temporarily if a continuing employment relationship is expected.

  • You might encourage your employees whose hours are reduced or if your operations are shut down to file unemployment insurance claims, as indicated in a prior email. The following link provides more information that your employees may need.


For more information, see: https://edd.ca.gov/Unemployment/Filing_a_Claim.htm


Can employees take Sick Pay? The California Labor Commission FAQ says this:

“Paid sick leave can be used for absences due to illness, the diagnosis, care or treatment of an existing health condition or preventative care for the employee or the employee’s family member.  Preventative care may include self-quarantine as a result of potential exposure to COVID-19 if quarantine is recommended by civil authorities.”


You can get more info about Sick Pay here --- see the Labor Commissioner’s FAQ here: https://www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm.

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