SB 355: Judgment debtor employers: Employment Development Department.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law establishes in the Department of Industrial Relations the Division of Labor Standards Enforcement under the direction of the Labor Commissioner and authorizes the Labor Commissioner to investigate employee complaints and recover civil penalties for violations of labor law, as prescribed. Existing law requires an employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, to deduct and withhold from those wages a sum which is substantially equivalent to the amount of tax reasonably estimated to be due under the Personal Income Tax Law resulting from the inclusion in the gross income of the employee of the wages which were subject to withholding. Existing law requires the Employment Development Department to have the powers and duties necessary to administer the reporting, collection, refunding to the employer, and enforcement of taxes required to be withheld by employers, as described above.

This bill would require, within 60 days of a final judgment being entered against an employer requiring payment to an employee or to the state, as specified, the judgment debtor employer to provide documentation to the Labor Commissioner that the judgment is fully satisfied, a certain bond has been posted, or the judgment debtor entered into an agreement for the judgment to be paid in installments, as prescribed, and is in compliance with that agreement. The bill would make a judgment debtor employer who fails to comply with that provision liable for a civil penalty. The bill would require, if a judgment debtor employer does not comply with that provision, the Labor Commissioner to provide written notice to the judgment debtor employer that the Labor Commissioner will submit the unsatisfied judgment to the Tax Support Division of the Employment Development Department as a notice of potential tax fraud, as prescribed, and that the civil penalty is due within 90 days of the notice.

Sponsors

Sponsors by party (alphabetical): Democratic 3 · Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. March 2, 2026Veto sustained.
2. March 2, 2026Stricken from file.
3. October 13, 2025In Senate. Consideration of Governor's veto pending.
4. October 13, 2025Vetoed by the Governor.
5. September 16, 2025Enrolled and presented to the Governor at 3 p.m.
6. September 9, 2025Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2713.) Ordered to engrossing and enrolling.
7. September 8, 2025In Senate. Concurrence in Assembly amendments pending.
8. September 8, 2025Read third time. Passed. (Ayes 79. Noes 0. Page 2991.) Ordered to the Senate.
9. September 2, 2025Read second time. Ordered to third reading.
10. August 29, 2025From committee: Do pass. (Ayes 15. Noes 0.) (August 29).
11. August 20, 2025August 20 set for first hearing. Placed on APPR. suspense file.
12. July 3, 2025Re-referred to Com. on APPR. pursuant to Assembly Rule 96.