Fresno, California – The California Employment Development Department(EDD) came to the AB 1513 show late and just recently has stated their directions on reporting AB 1513 back-wages. Here at Datatech, we stay on top of labor legislation and reporting requirements for state and federal agencies for the benefit of our clients.
You’ll recall that the AB 1513 back-wages were to be paid by mid-December 2016 for a 3 and half year span from July 2012 to December 2015. The complications this created for employers was off the chart, but employers attempted their best effort to pay the wages and follow up to see that any wages that may have been returned for ‘bad addresses’ were able to arrive at employees new addresses. Reporting these wages is a whole other struggle.
Recently, Datatech Vice President and Programmer Matthew Davidian received a few answers on how the EDD wants the AB 1513 wages reported. For our clients, says Davidian, “We will be creating a special DE-9/DE-9C report specifically for these wages. It will be a separate process from the regular quarterly reporting workflow.”
EDD’s late guidance on this issue for employers means that adjustments in payroll software will take time into 2017. Datatech is working on it’s solution for clients to arrive by sometime in February.
Davidian says Datatech clients will appreciate having this special DE-9/DE-9C report, “They’ll find all of the safe harbor checks that were issued during the fourth quarter 2016 by selecting checks issued with the special Safe Harbor wage type.” In addition to that, the report will determine which quarters each employee worked and allocate the total Safe Harbor wages earned among those quarters.
EDD wanted the AB 1513 wages to be reported separately from regular wages, however, many employers have already filed their quarterly reports and included the Safe Harbor wages in their regular quarterly report for the fourth quarter of 2016. A number of clients filed their reports even before the EDD sent the notices out.
So how do you simplify this issue? Says Davidian, “Datatech will not be doing any special programming for the quarterly report to exclude the Safe Harbor wages.” But he adds, “This means that employers should not delay filing regular electronic reports and making tax deposits for all wages issued in the fourth quarter.”
According to Davidian, AB 1513 quarterly reports should include a note to the EDD indicating that employer’s electronic report for the fourth quarter of 2016 included the AB 1513 wages that were reported. This way, the EDD will not double count these wages when entering them into their systems.
Here’s the kicker, the EDD cannot accept electronic reports for the AB 1513 wages. So the EDD says you’ll need to submit reports on paper for up to 14 quarters (July 2012 thru December 2015) for the safe harbor wages that were issued. Employers should have received a notice from the EDD with a special address for submitting these reports, says Davidian.
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