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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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Are CA employers required to pay additional Unemployment taxes if their reserve accounts a

Customer Question

Are CA employers required to pay additional Unemployment taxes if their reserve accounts are negative when their only employee files a claim
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.
Hello and welcome,

A negative balance in the reserve account typically indicates that the employer's rate has been too low to support claims made against the account. Therefore, the agency will normally increase the employer's UI contribution rate where a negative balance is indicated in the employer's reserve account.

Here is a link that explains contribution calculations:

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Customer: replied 5 years ago.
We have only had the 1 employee in CA for about 2 months and believe that we will need to lay her off soon. Since we have not filed our first return and paid the tax, obviously we would not have a positive reserve account if she is determined to be eligible for unemployment. At this time, we do not anticipate hiring any additional CA employees to report and file tax. Can CA require us to pay into the account to cover her claim if we no longer have CA employees?
Expert:  Tina replied 5 years ago.
The tax is typically stated as a rate payable on employee earnings, so if there are no earnings, there would normally be no tax to pay until there are earnings to report.

All the best to you!

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Tina and other California Employment Law Specialists are ready to help you
Customer: replied 5 years ago.

Thank you!

Expert:  Tina replied 5 years ago.
You are very welcome and take care.

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