Article 2. “wages,” The Basis Of The Contribution of California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 2.

Except as otherwise provided in this article "wages" means all remuneration payable to an employee for personal services, whether by private agreement or consent or by force of statute, including commissions and bonuses, and the reasonable cash value of all remuneration payable to an employee in any medium other than cash.

"Wages" also means all remuneration payable for personal services, as specified in Section 926, when the legal obligation for the payment of such wages is assumed by an employer specified in Section 678, and the first or prior employer for whom the personal services were originally performed is relieved of the legal obligation for the payment of such remuneration.

"Wages" also means all tips which are received while performing services which constitute employment and included in a written statement furnished to the employer pursuant to Section 6053 (a) of the Internal Revenue Code. The changes in law made in this section by Chapter 1461 of the Statutes of 1985 shall apply with respect to wages earned on and after January 1, 1986, in conformity with the provisions of federal law.

Unless otherwise specifically provided, the definitions and qualifications of deferred compensation plans shall be determined for purposes of this part in accordance with Subchapter D (commencing with Section 401) of Chapter 1 of Subtitle A of the Internal Revenue Code. When applying the Internal Revenue Code for the purposes of this part, any reference to regulations of the Internal Revenue Service shall not apply if the Employment Development Department has adopted and issued regulations on this subject. In the absence of regulations issued by the Employment Development Department, regulations issued under the Internal Revenue Code shall govern the interpretation of this part.

"Wages" also includes all of the following:
  (a) Any employer contributions under a qualified cash or deferred arrangement, as defined by Section 401(k) of the Internal Revenue Code, to the extent the amount is excluded from the gross income of the employee under Section 402(e)(3) of the Internal Revenue Code.
  (b) Any amount treated as an employer contribution under a state pickup plan as defined by Section 414(h)(2) of the Internal Revenue Code, only if the payments are made pursuant to a salary reduction arrangement.
  (c) Any amount deferred under a nonqualified deferred compensation plan shall be taken into account, for purposes of this article, on the later of the following:
  (1) When the services are performed.
  (2) When there is no substantial risk of forfeiture of the right to the amount.
  (d) Any amount taken into account as "wages" by reason of subdivision (c), and the income attributable thereto, shall be taxed only once and shall not thereafter be treated as "wages" for purposes of this article.
  (e) For the purposes of this section, the term "nonqualified deferred compensation plan" means any plan or arrangement for deferral of compensation other than a plan described under Section 934.

"Wages" includes compensation, that is deductible under Section 162 of the Internal Revenue Code, paid to a member of a limited liability company filing a federal corporate income tax return.

"Wages" does not include the actual amount of any required or necessary business expense incurred by an individual in connection with his employment, or, in lieu of the actual amount of such expenses, the reasonably estimated amount allowed therefor pursuant to authorized regulations.

"Wages" does not include remuneration in excess of seven thousand dollars ($7,000) paid to an individual by an employer during any calendar year, with respect to employment.

For the purpose of determining whether an employer has paid remuneration with respect to employment in excess of the limitation prescribed by Section 930 to an individual during any calendar year, the remuneration shall be deemed to include any remuneration paid to the individual by the employer for services constituting employment under the unemployment compensation law of another state which the employer has reported to the other state as wages for contribution purposes. As used in this section, "remuneration" does not include the remuneration of the type described in Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, and 938.3 when paid by the employer in another state.

If an employer during any calendar year acquires substantially all the property used in a trade or business of another employer, or used in a separate unit of a trade or business of the other employer, and immediately after the acquisition employs in his or her trade or business an individual who immediately prior to the acquisition was employed in the trade or business of the employer from whom the property was acquired, then, for the purpose of determining whether the acquiring employer has paid remuneration with respect to employment in excess of the limitation prescribed by Section 930, or the limitation prescribed by Section 985, to the individual during the calendar year, any remuneration with respect to employment paid to the individual by the employer from whom the property was acquired during the calendar year and prior to the acquisition shall be considered as having been paid by the acquiring employer. As used in this section, "remuneration" does not include the remuneration referred to in Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, and 938.3.

"Wages" does not include the amount of any payment, including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any payment, made to or on behalf of an employee or any of his or her dependents under a plan or system established by an employer which makes provision for his or her employees generally, or for his or her employees generally and their dependents, or for a class or classes of his or her employees, or for a class or classes of his or her employees and their dependents, on account of any of the following:
  (a) Sickness or accident disability, but in the case of payments made to an employee or any of his or her dependents, this subdivision shall exclude from "wages" only those payments which are received under a workers' compensation law.
  (b) Medical or hospitalization expenses in connection with sickness or accident disability.
  (c) Death.

(a) Except for Part 2 (commencing with Section 2601) of this division and Division 6 (commencing with Section 13000), any third party which makes a payment included in the term "wages" solely by reason of subdivision (a) of Section 931 shall be the employer with respect to those wages unless the third-party payer notifies the last employer, who is a member of the plan and for whom the services were performed, within 15 days of payment, and provides all of the following information to that last employer:
  (1) The name and social security account number of the recipients of the wages paid pursuant to subdivision (a) of Section 931.
  (2) The amount of gross wages paid pursuant to subdivision (a) of Section 931.
  (b) The special rule prescribed by this subdivision applies to the payment of sick pay made by a third-party payer, such as an insurer, under a contract of insurance pursuant to a multiple employer plan that is obligated to make payments for sick pay to employees of participating employers. If the third-party payer provides the plan with the notification required by subdivision (a) within the time required, the plan, not the third-party payer, shall be treated as the employer under subdivision (a). If within six business days after receipt of the notification the plan similarly notifies the last employer for whom the services are performed, and who is a plan member, that employer, not the plan, shall be required to report and pay the contributions due with respect to the wages.
  (c) The employer, as determined by subdivision (a) or (b), shall pay contributions, required by this part, except as provided in Sections 984 and 986, and shall comply with the requirements of subdivision (a) of Section 1088.
  (d) When an employer receives the notification prescribed in subdivision (a) or (b), the wages described therein shall be deemed paid when the notice is received.
  (e) The director shall not make an assessment pursuant to Section 1126, 1127, or 1137 to assess employee contributions required by Sections 984 and 13020 on third-party sick pay as described in subdivision (a) for the period from January 1, 1987, through the date on which this subdivision became effective.
  (f) Except as provided by Section 1176 and Section 19301 of the Revenue and Taxation Code, no refunds may be made for employee contributions required by Sections 984 and 13020 paid on third-party sick pay as described in subdivision (a) for the period from January 1, 1987, through the date on which this subdivision became effective.

"Wages" does not include any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability made by an employer to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employer.

"Wages" does not include any payment made to, or on behalf of, an employee or his or her beneficiary:
  (a) From or to a trust described in Section 401(a) of the Internal Revenue Code which is exempt from tax under Section 501(a) of that code at the time of the payment, unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.
  (b) Under or to an annuity plan which, at the time of the payment, is a plan described in Section 403(a) of the Internal Revenue Code.
  (c) Under a simplified employee pension, as defined in Section 408 (k)(1) of the Internal Revenue Code, other than any contributions described in Section 408(k)(6) of the Internal Revenue Code.
  (d) Under a simple retirement account, as described in Section 408 (p) of the Internal Revenue Code, other than any elective contributions under Section 408(p)(2)(A)(i) of the Internal Revenue Code.
  (e) Under or to an annuity contract described in Section 403(b) of the Internal Revenue Code, other than a payment for the purchase of the contract which is made by reason of a salary reduction agreement, whether evidenced by a written instrument or otherwise.
  (f) Under or to an exempt governmental deferred compensation plan, as defined in Section 3121(v)(3) of the Internal Revenue Code.
  (g) To supplement pension benefits under a plan or trust described in any of the foregoing provisions of this section to take into account some portion or all of the increase in the cost of living, as determined by the Secretary of Labor, since retirement, but only if the supplemental payments are under a plan which is treated as a welfare plan under Section 3(2)(B)(ii) of the Employee Retirement Income Security Act of 1974.

"Wages" does not include the payment by an employer, without deduction from the remuneration of the employee, of the tax imposed upon an employee under Section 3101 of the Internal Revenue Code with respect to remuneration paid to an employee for domestic service in a private home of the employer or for agricultural labor, as defined in subsection (g) of Section 3121 of the Internal Revenue Code.

"Wages" does not include remuneration paid in any medium other than cash to an employee for service not in the course of the employer's trade or business, except that this section shall not apply to remuneration paid for domestic service in a private home or in a local college club or local chapter of a college fraternity or sorority.

"Wages" does not include the payment to, or on behalf of, an employee for moving expenses, if at the time of the payment it is reasonable to believe that a corresponding deduction from income is allowable to the employee under Section 217 of the Internal Revenue Code.

(a) "Wages" does not include any payment or series of payments by an employer to an employee or any of his or her dependents which is paid:
  (1) Upon or after the termination of an employee's employment relationship because of death or retirement for disability, and
  (2) Under a plan established by the employer which makes provision for his or her employees generally or a class or classes of his or her employees, or for the employees or class or classes of employees and their dependents.
  (b) This section shall not apply to any payment or series of payments which would have been paid if the employee's employment relationship had not been terminated as prescribed by this section.

"Wages" does not include any contribution, payment, or service provided by an employer which may be excluded from the gross income of an employee, his or her spouse, or his or her dependents, under the provisions of Section 120 of the Internal Revenue Code, relating to amounts received under a qualified group legal services plan.

"Wages" does not include any payment made, or benefit furnished to, or for the benefit of, an employee, for any of the following:
  (a) An educational assistance program if, at the time of payment or the furnishing, it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under Section 127 of the Internal Revenue Code.
  (b) A dependent care assistance program if, at the time of payment or the furnishing, it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under Section 129 of the Internal Revenue Code.
  (c) Any benefit provided to or on behalf of an employee if at the time the benefit is provided it is reasonable to believe that the employee will be able to exclude the benefit from income under Section 74(c), 117, or 132 of the Internal Revenue Code.
  (d) Any benefit under a cafeteria plan, as described in Section 125 of the Internal Revenue Code, if the benefit is excludable from wages pursuant to any other provision of this article, except Section 930.

"Wages" does not include any payment made, or benefit furnished to, or for the benefit of, an employee under Section 105(b) of the Internal Revenue Code, relating to amounts expended for medical care, as amended by Section 1004(d)(1) of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152).

"Wages" does not include any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.

"Wages," does not include any payment made by an employer to a survivor, or the estate of a former employee, after the calendar year in which the employee died.

Types of payments excluded from the definition of wages by Sections 931, 931.5, 933, 934, 935, 936, 937, 938, 938.1, 938.3, and 938.7 shall be excluded from the definition of wages only during the time that the respective type or types of payments set forth in those sections are similarly excluded from the definition of wages contained in the Federal Unemployment Tax Act.

For the purposes of this section, of Sections 977 and 977.5 to the extent specified by those sections, and of Sections 1026, 1088, 1280, 1281, 1282, 2652, 2654, 2655, and 2657, "wages" means taxable wages as well as wages which would be taxable except for the limitations on taxable wages provided under Sections 930 and 985.