Section 1128.1 Of Article 8. Assessments From California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 8.
1128.1
. (a) If the director finds that an individual or business
entity has exchanged money on behalf of an employer and the employer
used the cash proceeds from the exchange to conceal the payment of
wages with an intent to evade a provision of this code, the director
shall assess a penalty against the individual or business entity in
an amount equal to 100 percent of any assessed contributions that
were based on the concealed wages. An employing unit subject to a
penalty under Section 1128 shall not be assessed a penalty under this
section for the same violation.
(b) For purposes of this section, "business entity" means a
partnership, corporation, association, limited liability company, or
Indian tribe (as described by Section 3306(u) of Title 26 of the
United States Code).
(c) The penalty applies only when there is evidence that the
individual or business entity who exchanged money knew that the
employer intended to use the cash proceeds from the exchange to
conceal the payment of wages and thereby avoid the payment of
contributions or taxes required by this code.