How Much Penalties Can the EDD Charge Me?

On: June 15, 2018

It depends on what happened to incur the penalty in question:

Penalty Name: Benefit Charge Assessment Penalty

Penalty Reason: Failure by a reimbursable employer to pay the cost of Unemployment Insurance (UI) benefits paid to an individual within 30 days from the date of the notice.

Penalty Computation/Rate: 10% of the unpaid contributions plus interest.

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Penalty Name: SEF LEC Penalty (School Employees Fund Local Experience Charge)

Penalty Reason: Penalty charged if a school employer fails to pay a quarterly local experience charge within 30 days from the date of notice.

Penalty Computation/Rate: 10% of the unpaid amount plus interest.

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Penalty Name: 977(c) Rate Increase

Penalty Reason: Employer obtains or attempts to obtain a reduced UI rate due to deliberate ignorance, reckless disregard, fraud, intent to evade, misrepresentation, or willful nondisclosure.

Penalty Computation/Rate: Assigned the maximum UI contribution rate pursuant to Section 977(a) of the CUIC table plus 2% for specified rating periods.

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Penalty Name: NER Penalty (New Employee Registry)

Penalty Reason: Failure to report the hiring of a new employee or rehired employee as required and within the time required, pursuant to Section 1088.5(d) of the CUIC.

Penalty Computation/Rate: $24 for each failure to report the hiring of an employee or $490 if the failure is the result of conspiracy.

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Penalty Name: ICR Penalty (Independent Contractor Reporting)

Penalty Reason: Failure to report an independent contractor as required and within the time required, pursuant to Section 1088.8(c) of the CUIC.

Penalty Computation/Rate: $24 for each failure to report an independent contractor or $490 if the failure is the result of conspiracy.

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Penalty Name: Underpayment Penalty

Penalty Reason: Failure to pay contributions by the due date.

 Penalty Computation/Rate: 15% of the late contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Late Payment Penalty

Penalty Reason: Failure to submit a Payroll Tax Deposit, DE 88, payment within the time required.

Penalty Computation/Rate: 15% of the late contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Quarterly Threshold Penalty

Penalty Reason: Personal Income Tax (PIT) reported on a DE 88 deposit exceeded the limits for the quarterly deposit schedule. Penalty and interest are based on State Disability Insurance (SDI) and PIT withholdings.

Penalty Computation/Rate: 15% of the contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Payment Noncompliance Penalty

Penalty Reason: Failure to remit SDI and PIT payments by electronic funds transfer (if required).

Penalty Computation/Rate: 15% of the contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Late Report Penalty

Penalty Reason: Failure to file reports within 60 days of the due date. Applies only to amounts that were not paid by the due date. This penalty is in addition to penalties required by Sections 1112, 1126, and 1127 of the CUIC.

Penalty Computation/Rate: 15% of the late contributions and PIT withholdings (10% for periods prior to the third quarter of 2014).

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Penalty Name: Wage Item Penalty

Penalty Reason: Failure to file wage reports within 15 days of a specific written demand.

Penalty Computation/Rate: $20 per wage item ($10 for periods prior to the third quarter of 2014).

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Penalty Name: Wage Noncompliance Penalty

Penalty Reason: Failure to file wage reports for each employee on magnetic media (if required).

Penalty Computation/Rate: $20 per wage item ($10 for periods prior to the third quarter of 2014).

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Penalty Name: Annual Return Penalty

Penalty Reason: Failure to file annual reconciliation return within 30 days of written notice.

Penalty Computation/Rate: The lesser of: $1,000 or 5% of the contributions to be reconciled.

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Penalty Name: 1126 Assessment Penalty

Penalty Reason: Penalty added to an assessment for failure to file returns or reports.

Penalty Computation/Rate: 15% of the assessed contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Failure to Register Penalty

Penalty Reason: Failure to register as an employer when the failure is due to intentional disregard or intent to evade.

Penalty Computation/Rate: $100 per unreported employee – applied in the assessed quarter with the highest number of unreported employees.

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Penalty Name: 1127 Assessment Penalty

Penalty Reason: Filing of deficient returns or reports when the employer was negligent or intentionally disregarded the law.

Penalty Computation/Rate: 15% of the assessed contributions (10% for periods prior to the third quarter of 2014).

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Penalty Name: Fraud or Intent to Evade Penalty

Penalty Reason: Failure to file returns or reports or if any part of the deficiency for which an assessment is made is due to fraud or intent to evade. This is in addition to penalties assessed pursuant to Sections 1126 and 1127 of the CUIC.

Penalty Computation/Rate: 50% of the assessed contributions.

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Penalty Name: Additional Fraud or Intent to Evade Penalty

Penalty Reason: Failure to provide information returns to workers as required under Section 13050 of the CUIC or Section 6041A of the Internal Revenue Code (IRC) when penalty is assessed pursuant to Section 1128(a) of the CUIC. This is in addition to penalties assessed pursuant to Sections 1126 and 1127 of the CUIC.

Penalty Computation/Rate: 50% of the assessed contributions.

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Penalty Name: Money Exchange Penalty

Penalty Reason: Penalty charged to an individual or business who knowingly participates in a money exchange scheme with an employer in an attempt to conceal wages.

Penalty Computation/Rate: 100% of the assessed contributions based on concealed wages.

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Penalty Name: Assessment Finality Penalty

Penalty Reason: Failure to pay assessments by the date the assessment becomes final.

Penalty Computation/Rate: 15% of the unpaid contributions due after the finality date (10% for periods prior to the third quarter of 2014).

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Penalty Name: False Statement Penalty – 1142(a)

Penalty Reason: Making a false statement or representation or willfully failing to report a material fact regarding the termination of an employee’s employment. This penalty is assessed against the employer, the employer’s agent, or both.

Penalty Computation/Rate: Not less than two (2) or more than 10 times the claimant’s weekly benefit amount.

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Penalty Name: False Statement Penalty  – 1142(b)

Penalty Reason: Submission of a written statement containing a false statement or representation or willfully failing to report a material fact concerning the reasonable assurance of reemployment following a break between academic years or terms. This penalty is assessed against the employer, the employer’s agent, or both.

Penalty Computation/Rate: Not less than two (2) nor more than 10 times the claimant’s weekly benefit amount.

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Penalty Name: False Statement Penalty  – 1142.1

Penalty Reason: Making a false statement or representation or willfully failing to report a material fact regarding the termination of an employee’s employment, regarding any week during which the employee worked or regarding any time granted to the employee for professional development, when the employee was performing services for an educational institution as defined in Section 1253.3 of the CUIC. This penalty is assessed against the employer.

Penalty Computation/Rate: Not less than two (2) nor more than 10 times the claimant’s weekly benefit amount.

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Penalty Name: Advisor Penalty

Penalty Reason: Person or business entity knowingly advising another person or business entity to violate any provision of Chapter 4, Part 1 of Division 1 of the CUIC. This penalty is assessed against the advisor.

Penalty Computation/Rate: The greater of: $5,000 or 10% of the underreported contributions, penalties, and interest.

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Penalty Name: Worker Information Return Penalty

Penalty Reason: Failure to furnish a statement to an employee in the manner, at the time, and showing the information required by Section 13050 of the CUIC or furnishing a false or fraudulent statement to an employee.

Penalty Computation/Rate: $50 for each occurrence.

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Penalty Name: Additional Worker Information Return Penalty

Penalty Reason: Failure to report amounts paid as remuneration for personal services on an information return as required by Section 13050 of the CUIC or Section 6041A of the IRC on the date prescribed. This penalty shall be assessed against the person or entity required to file and may be charged in lieu of, or in addition to, the penalty under Section 13052 of the CUIC.

Penalty Computation/Rate: The maximum income tax rate pursuant to Section 17041 of the Revenue and Taxation Code multiplied by the unreported amounts paid for personal services.