Article 5. Elections For Financing Unemployment Insurance Coverage of California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 3. >> Article 5.

(a) As used in this section, "nonprofit organization" means any corporation, community chest, fund, or foundation for which services are performed that constitute employment by compulsory coverage under Section 608.
  (b) A nonprofit organization may, in lieu of the contributions required of employers, elect to finance its liability for unemployment compensation benefits, extended duration benefits, and federal-state extended benefits coverage under this division by any method of financing coverage that is permitted under Section 803.
  (c) Any election under Section 803 of a method for financing coverage under this section shall, upon the written approval of the director, take effect with respect to services performed from and after the first day of the calendar quarter in which the election is filed with the director, and shall continue in effect for not less than five full calendar years. Thereafter the election under Section 803 may be terminated as of January 1 of any calendar year only if the nonprofit organization, on or before the 31st day of January of that year, has filed with the director a written application for termination. The director may for good cause waive the requirement that a written application for termination shall be filed on or before the 31st day of January. In no event shall the director approve any method of financing coverage by an election under Section 803 that would establish any different method of financing coverage for any calendar quarter where an election for coverage made by a nonprofit organization under Section 702.1 elects a method of financing coverage permitted under Section 803.
  (d) To the extent permitted by federal law, a nonprofit organization which elects reimbursement financing pursuant to this section and which has a favorable reserve account on the date the election takes effect shall not be liable for the reimbursement of benefits pursuant to the election to the extent that the cost of benefits does not exceed the amount in the reserve account. Notwithstanding Section 1029, the reserve account shall not be canceled and the cost of benefits otherwise chargeable to the organization shall be charged to the reserve account until it is exhausted.
  (e) Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this section.

To the extent permitted by federal law, a nonprofit organization which before the operative date of this section elected reimbursement financing pursuant to Section 801 and which has a favorable reserve account on the operative date of this section shall not be liable for the reimbursement of benefits pursuant to the election to the extent that the cost of benefits does not exceed the amount in the reserve account. Notwithstanding Section 1029, the reserve account shall not be canceled and the cost of benefits otherwise chargeable to the organization shall be charged to the reserve account until it is exhausted.

(a) The State of California, any other public entity (as defined by Section 605), or any Indian tribe as described by Section 3306(u) of Title 26 of the United States Code, or any subdivision, subsidiary, or business enterprise wholly owned by that Indian tribe, for which services are performed that do constitute employment under Section 605 may, in lieu of the contributions required of employers, elect to finance its liability for unemployment compensation benefits, extended duration benefits, and federal-state extended benefits with respect to those services by any method of financing coverage that is permitted under Section 803.
  (b) An election under Section 803 for financing coverage under this section shall take effect with respect to services performed from and after the first day of the calendar quarter in which the election is filed with the director, and shall continue in effect for not less than two full calendar years, unless the election is canceled by the director pursuant to paragraph (2) of subdivision (g) of Section 803. Thereafter the election under Section 803 may be terminated as of January 1 of any calendar year only if the state or other public entity or Indian tribe, on or before the 31st day of January of that year, has filed with the director a written application for termination. The director may for good cause waive the requirement that a written application for termination shall be filed on or before the 31st day of January. Financing coverage by an election under Section 803 is not valid if it would establish any different method of financing coverage for any calendar quarter where an election for coverage has also been made by the state or other public entity or Indian tribe under any provision of Article 4 (commencing with Section 701) of this chapter.
  (c) The director may require from the state and other public entity and Indian tribe, including an agent thereof, employment, financial, statistical, or other information and reports, properly verified, as may be deemed necessary by the director to carry out his or her duties under this division, which shall be filed with the director at the time and in the manner prescribed by him or her.
  (d) The director may tabulate and publish information obtained pursuant to this section in statistical form and may divulge the name of the state or other public entity or Indian tribe.
  (e) The state and other public entity and Indian tribe, including an agent thereof, shall keep any work records as may be prescribed by the director for the proper administration of this division.
  (f) Except as inconsistent with the provisions of this section, the provisions of this division and authorized regulations apply to any matter arising pursuant to this section.

(a) As used in this section, "entity" means an employing unit that is authorized by Article 4 (commencing with Section 701) or by Section 801 or 802 to elect a method of financing coverage permitted by this section.
  (b) In lieu of the contributions required of employers, an entity may elect any one of the following:
  (1) To pay into the Unemployment Fund the cost of benefits, including extended duration benefits and federal-state extended benefits, paid based on base period wages with respect to employment for the entity and charged to its account in the manner provided by Section 1026, pursuant to authorized regulations that shall prescribe the rate or amount, time, manner, and method of payment or advance payment or providing a good and sufficient bond to guarantee payment of contributions.
  (2) Two or more entities may, pursuant to authorized regulations, file an application with the director for the establishment of a joint account for the purpose of determining the rate of contributions they shall pay into the Unemployment Fund to reimburse the fund for benefits paid with respect to employment for those entities. The members of the joint account may share the cost of benefits, including extended duration benefits and federal-state extended benefits, paid based on the base period wages with respect to employment for those members and charged to the joint account in the manner provided by Section 1026. The director shall prescribe authorized regulations for the establishment, maintenance, and dissolution of joint accounts, and for the rate or amount, time, manner, and method of payment or advance payment or providing a good and sufficient bond to guarantee payment of contributions by the members of joint accounts, on the cost of benefits charged in the manner provided by Section 1026.
  (c) Sections 1030, 1031, 1032, and 1032.5, and any provision of this division for the noncharging of benefits to the account of an employer, do not apply to an election under subdivision (b). The cost of benefits charged to an entity under this section shall include, but not be limited to, benefits or payments improperly paid in excess of a weekly benefit amount, or in excess of a maximum benefit amount, or otherwise in excess of the amount that should have been paid, due to any computational or other error of any type by the Employment Development Department or the Department of Benefit Payments, whether or not the error could be anticipated.
  (d) The cost of benefits charged to an entity under this section shall include credits of benefit overpayments actually collected by the department, unless the department determines that the payment was made because the entity, or an agent of the entity, was at fault for failing to respond timely or adequately to requests of the department for information relating to the individual claim for unemployment compensation benefits. The department shall make this determination when the entity or agent fails to respond timely or adequately in two instances relating to the individual claim for unemployment compensation benefits. This subdivision shall apply to benefit overpayments established on or after October 22, 2013.
  (e) In making the payments prescribed by subdivision (b), there shall be paid or credited to the Unemployment Fund, either in advance or by way of reimbursement, as may be determined by the director, any sums he or she estimates the Unemployment Fund will be entitled to receive from each entity for each calendar quarter, reduced or increased by any sum by which he or she finds that his or her estimates for any prior calendar quarter were greater or less than the amounts which should have been paid to the fund. The estimates may be made upon the basis of statistical sampling, or any other method as may be determined by the director. Upon making that determination, the director shall give notice of the determination, pursuant to Section 1206, to the entity. The director may cancel any contributions or portion thereof that he or she finds has been erroneously determined. The director shall charge to any special fund, that is responsible for the salary of any employee of an entity, the amount determined by the director for which the fund is liable pursuant to this section. The contributions due from the entity shall be paid from the liable special fund, the General Fund, or other liable fund to the Unemployment Fund by the Controller or other officer or person responsible for disbursements on behalf of the entity within 30 days of the date of mailing of the director's notice of determination to the entity. The director for good cause may extend for not to exceed 60 days the time for paying without penalty the amount determined and required to be paid. Contributions are due upon the date of mailing of the notice of determination and are delinquent if not paid on or before the 30th day following the date of mailing of the notice.
  (f) An entity that fails to pay the contributions required within the time required shall be liable for interest on the contributions at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code from and after the date of delinquency until paid, and an entity that without good cause fails to pay contributions required within the time required shall pay a penalty of 10 percent of the amount of the contributions. If the entity fails to pay the contributions required on or before the delinquency date, the director may assess the entity for the amount required by the notice of determination. This subdivision does not apply to employers electing financing under Section 821, for amounts due after December 31, 1992.
  (g) Article 8 (commencing with Section 1126) of Chapter 4 of Part 1, with respect to the assessment of contributions, and Chapter 7 (commencing with Section 1701) of Part 1, with respect to the collection of contributions, apply to the assessments provided by this section. Sections 1177 to 1184, inclusive, relating to refunds and overpayments, apply to amounts paid to the Unemployment Fund pursuant to this section. Sections 1222, 1223, 1224, 1241, and 1242 apply to matters arising under this section.
  (h) (1) The director may terminate the election of an entity for financing under this section if the entity is delinquent in the payment of advances or reimbursements required by the director under this section. After a termination, the entity may again make an election pursuant to this section, but only if it is not delinquent in the payment of contributions and not delinquent in the payment of advances or reimbursements required by the director under this section.
  (2) In the case of an Indian tribe (as described by Section 3306 (u) of Title 26 of the United States Code), the director shall terminate all elections for the tribe and all subdivisions, subsidiaries, and business enterprises wholly owned by that tribe if the tribe or any subdivision, subsidiary, or business enterprise wholly owned by that tribe is more than 90 days delinquent in the payment of contributions, bonds, advances, reimbursements, or applicable penalties or interest required under this code, after notice to the tribe. After a termination, the Indian tribe may again make an election pursuant to this section, but only if it is not delinquent in the payment of contributions, bonds, advances, reimbursements, or applicable penalties or interest required under this code.
  (i) Notwithstanding any other provision of this section, an entity shall not be liable for that portion of any extended duration benefits or federal-state extended benefits that is reimbursed or reimbursable by the federal government to the State of California.
  (j) After the termination of an election under this section, the entity shall remain liable for its proportionate share of the cost of benefits paid and charged to its account in the manner provided by Section 1026, which are based on wages paid for services during the period of the election. That liability may be charged against any remaining balance of a prior reserve account used by the entity pursuant to Section 712 or 713. Any portion of the remaining balance shall be included in the reserve account of the entity following a termination of an election under this section which occurs prior to the expiration of a period of three consecutive years commencing with the effective date of the election. For purposes of Section 982, the period of an election under Section 803 shall, to the extent permitted by federal law, be included as a period during which a reserve account has been subject to benefit charges.

Notwithstanding any other provision of this article, if an entity acquires or succeeds to another entity in any manner, the method of reimbursement financing, in lieu of contributions required of employers, elected by the acquiring entity shall apply to all service performed in the employ of the acquiring entity. The acquiring entity shall be liable for the reimbursement of all benefits chargeable to the entity acquired under any method of reimbursement financing elected by the entity acquired, except that this provision shall not apply to the acquisition of, or succession to, less than a total entity if the remainder of the entity partially acquired or succeeded to remains in existence. "Entity" as used in this section means any entity as defined by subdivision (a) of Section 803.

Notwithstanding any other provision of this article, a nonprofit organization which elected reimbursement financing under Section 803 and which has acquired a previously accumulated favorable reserve account under Section 712 or 713 shall be liable for the reimbursement of benefits pursuant to such election for any benefits chargeable to the reserve account and based upon wages paid prior to such election, to the extent that such benefits exceed the previously accumulated favorable reserve account.

The director shall notify the United States Internal Revenue Service and the United States Department of Labor of the failure of any Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code) to make a payment or post a bond as required under subdivision (b) of Section 803 within 90 days of the delinquency date of a notice to the tribe specifying the amount due under that subdivision. If the amount due is subsequently paid by the Indian tribe, the director shall notify the United States Internal Revenue Service and the United States Department of Labor of the satisfaction of the liability.

An unregistered organization described in Section 608, and which has been determined by the Internal Revenue Service to be exempt under Section 501(a) as an organization described in Section 501(c)(3) of the Internal Revenue Code, may elect reimbursement financing under Section 801 when the director finds that it has good cause for failing to register as an employer under this division. The election under Section 801 shall be from the time the organization became an employer. The organization shall, upon election, be liable for reimbursement of the cost of benefits chargeable to the organization from the time it became an employer. Payment of the cost of benefits shall be as provided in Section 803 except that benefits paid more than 30 days prior to the date of election under Section 801 shall accrue interest as provided in Section 1113. The election under Section 801 shall be subject to all provisions of Section 803.

(a) The department shall give notice, as required by Section 1327, to each public entity, as defined by Section 605, which has elected a method of financing under Section 803 at a single address to be selected by the entity.
  (b) The department shall implement subdivision (a) according to the following schedule:
  (1) For the State of California, by July 1, 1986.
  (2) For all public entities with more than 100 employees, by October 1, 1986.
  (3) For all other local public entities, by January 1, 1987.