Fillable Printable Penalty Reference Chart (De 231Ep)
Fillable Printable Penalty Reference Chart (De 231Ep)
Penalty Reference Chart (De 231Ep)
DE 231EP (7-16) (INTERNET) Page 1 of 5 CU
PENALTY REFERENCE CHART
The Employment Development Department (EDD) applies penalties in accordance with the California
Unemployment Insurance Code (CUIC) and case law to ensure penalties are appropriately and
accurately applied.
Please use the chart below for reference purposes only. Penalties are listed by CUIC section.
Penalty Name
(On EDD correspondence)
CUIC
Section
Penalty Reason
Penalty
Computation/Rate
Benefit Char
g
e
Assessment Penalty
803(f) 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.
10% o
f
the unpaid
contributions plus
interest.
Exception – Good cause.
SEF LEC Penalty
(School Employees Fund
Local Experience Charge)
828 Penalty char
g
ed if a school employer fails to
pay a quarterly local experience charge
within 30 days from the date of notice.
10% of the
unpaid amount
plus interest.
Exception – None.
977(c) Rate Increase 977(c) Employer obtains or attempts to obtain a
reduced UI rate due to deliberate ignorance,
reckless disregard, fraud, intent to evade,
misrepresentation, or willful nondisclosure.
Assi
g
ned the
maximum UI
contribution rate
pursuant to Section
977(a) of the CUIC
table plus 2% for
specified rating
periods.
Exception – None.
NER Penalty
(New Employee Registry)
1088.5(e) Failure to repor
t
the hirin
g
of a new
employee or rehired employee as required
and within the time required, pursuant to
Section 1088.5(d) of the CUIC.
$24 for each failure
to report the hiring
of an employee or
$490 if the failure is
the result of
conspiracy.
Exception – Good cause.
ICR Penalty
(Independent
Contractor Reporting)
1088.8(e) Failure to report an independent contractor as
required and within the time required,
pursuant to Section 1088.8(c) of the CUIC.
$24 for each failure
to report an
independent
contractor or $490 if
the failure is the
result of conspiracy.
Exception – Good cause.
Underpayment Penalty 1112(a) Failure to pay contributions by the due date. 15% of the late
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – Good cause.
DE 231EP (7-16) (INTERNET) Page 2 of 5
Penalty Name
(On EDD correspondence)
CUIC
Section
Penalty Reason
Penalty
Computation/Rate
Late Payment Penalty 1112(a) Failure to submit a Pa
y
roll Tax De
p
osi
t
,
DE 88, payment within the time required.
15% of the late
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – Good cause.
Quarterly Threshold
Penalty
1112(a) 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.
15% of the
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – Good cause.
Payment
Noncompliance Penalty
1112(b) Failure to remit SDI and PIT payments by
electronic funds transfer (if required).
15% of the
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – Good cause.
Late Report Penalty 1112.5(a) 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.
15% of the late
contributions and
PIT withholdings
(10% for periods
prior to the third
quarter of 2014).
Exception – Good cause.
Wa
g
e Item Penalty 1114(a) Failure to file wa
g
e reports within 15 days of
a specific written demand.
$20 per wa
g
e item
($10 for periods
prior to the third
quarter of 2014).
Exception – Good cause.
Wa
g
e Noncompliance
Penalty
1114(b) Failure to file wa
g
e reports for each
employee on magnetic media (if required).
$20 per wa
g
e item
($10 for periods
prior to the third
quarter of 2014).
Exception – Good cause.
Annual Return Penalty 1117 Failure to file annual reconciliation return
within 30 days of written notice.
The lesser of:
$1,000 or
5% of the
contributions to be
reconciled.
Exception – Good cause.
1126 Assessment
Penalty
1126 Penalty added to an assessment for failure to
file returns or reports.
15% of the assessed
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – None.
DE 231EP (7-16) (INTERNET) Page 3 of 5
Penalty Name
(On EDD correspondence)
CUIC
Section
Penalty Reason
Penalty
Computation/Rate
Failure to Re
g
ister
Penalty
1126.1 Failure to re
g
ister as an employer when the
failure is due to intentional disregard or intent
to evade.
$100 per unreported
employee – applied
in the assessed
quarter with the
highest number of
unreported
employees.
Exception – None.
1127 Assessment
Penalty
1127 Filin
g
of deficient returns or reports when the
employer was negligent or intentionally
disregarded the law.
15% of the assessed
contributions (10%
for periods prior to
the third quarter of
2014).
Exception – None.
Fraud or Intent to
Evade Penalty
1128(a) 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.
50% of the assessed
contributions.
Exception – None.
Additional Fraud or
Intent to Evade Penalty
1128(b) 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.
50% of the
assessed
contributions.
Exception – None.
Money Exchan
g
e
Penalty
1128.1 Penalty char
g
ed to an individual or business
who knowingly participates in a money
exchange scheme with an employer in an
attempt to conceal wages.
100% of the
assessed
contributions based
on concealed
wages.
Exception – None.
Assessment Finality
Penalty
1135 Failure to pay assessments by the date the
assessment becomes final.
15% of the unpaid
contributions due
after the finality date
(10% for periods
prior to the third
quarter of 2014).
Exception – None.
False Statement Penalty 1142(a) Makin
g
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.
Not less than two (2)
or more than 10
times the claimant’s
weekly benefit
amount.
Exception – None.
DE 231EP (7-16) (INTERNET) Page 4 of 5
Penalty Name
(On EDD correspondence)
CUIC
Section
Penalty Reason
Penalty
Computation/Rate
False Statement Penalty 1142(b) Submission of a written statement containin
g
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.
Not less than two (2)
nor more than 10
times the claimant’s
weekly benefit
amount.
Exception – None.
False Statement Penalty 1142.1 Makin
g
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.
Not less than two (2)
nor more than 10
times the claimant’s
weekly benefit
amount.
Exception – None.
Advisor Penalty 1145 Person or business entity knowin
g
ly
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.
The
g
reater of:
$5,000 or 10% of
the underreported
contributions,
penalties, and
interest.
Exception – None.
Worker Information
Return Penalty
13052 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.
$50 for each
occurrence.
Exception – Reasonable cause.
Additional Worker
Information Return
Penalty
13052.5 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.
The maximum
income tax rate
pursuant to
Section 17041 of
the Revenue and
Taxation Code
multiplied by the
unreported
amounts paid for
personal services.
Exception – None.
DE 231EP (7-16) (INTERNET) Page 5 of 5
ADDITIONAL INFORMATION
F
or further assistance, please contact the Taxpayer Assistance Center at 888-745-3886 or visit the nearest
Employment Tax Office listed in the Ca
lifornia Employer’s Guide, DE 44, and on the EDD website at
www.edd.ca.gov/Office_Locator/. Additional information is also available through the EDD no-fee payroll tax
seminars and online courses. View the in-person and online course offerings on the EDD website at
www.edd.ca.gov/Payroll_Tax_Seminars/.
F
or information regarding penalty waivers, refer to Information Sheet: Waiver of Penalty Policy, DE 231J.
The EDD is an equal opportunity employer/program. Auxiliary aids and services are available upon request to
individuals with disabilities. Requests for services, aids, and/or alternate formats need to be made by calling
888-745-3886 (voice) or TTY 800-547-9565.
This information sheet is provided as a public service and is intended to provide nontechnical assistance. Every attempt has been made to
provide information that is consistent with the appropriate statutes, rules, and administrative and court decisions. Any information that is
inconsistent with the law, regulations, and administrative and court decisions is not binding on either the Employment Development Department
or the taxpayer. Any information provided is not intended to be legal, accounting, tax, investment, or other professional advice.
