Employment Development Department: Franchise Tax Board: report: payroll charge.
The passing of AB 2690 would create a new avenue for funding while ensuring employers have a say, as the charge is framed as voluntary. This could have implications for how employers manage payroll costs and their contributions to state programs. While the bill aims to support the Employment Development Department's administrative functions, its success depends largely on employer participation and compliance with the proposed voluntary charge.
Assembly Bill 2690, introduced by Assembly Member Burke, focuses on the administration of personal income tax and unemployment through the Employment Development Department and the Franchise Tax Board. Specifically, the bill mandates that these two entities collaborate to prepare a report recommending the establishment of a voluntary payroll charge on employers. This report is required to be submitted by July 1, 2019, and seeks to address funding mechanisms potentially helpful for unemployment programs and other state financial responsibilities related to labor.
Overall, sentiment around AB 2690 appears mixed. Supporters believe that a voluntary payroll charge could stabilize funding for essential unemployment programs, while providing flexibility for employers during economic fluctuations. Conversely, critics argue that introducing new charges, even voluntary ones, could burden businesses and complicate the financial landscape of labor costs in California, leading to a hesitance about the bill's potential implementation.
A notable point of contention revolves around whether making this charge voluntary is sufficient to garner the necessary support from employers. There are concerns that without mandatory compliance, the effectiveness of the payroll charge could be undermined, limiting the scope of funds available to support unemployment programs. Additionally, the repeal of the section in the bill on January 1, 2023, raises questions about the long-term sustainability of implementing such charges.