SB-355 • 2026

Judgment debtor employers: Employment Development Department.

Labor Taxes

Vetoed

The latest official action shows the governor vetoed this bill. Check the bill history to see whether lawmakers later overrode that veto.

Sponsor: Pérez
Last action: 2026-03-02
Official status: Veto sustained.
Effective date: Not listed

Plain English Breakdown

The candidate explanation included details about penalties and enforcement that are not specified in the official summary text.

Rules for Employers with Court Orders to Pay

This law requires employers who have court orders to pay money to employees or the state to provide proof of payment within two months. If they don't, there can be penalties and their case might be reported as potential tax fraud.

What This Bill Does

Requires an employer with a final court order to pay money to an employee or the state to show proof of payment or agreement to pay in installments within 60 days.
Makes employers who don't follow this rule liable for civil penalties.
Allows the Labor Commissioner to send unsatisfied judgments to the Tax Support Division as potential tax fraud notices if the employer doesn't comply.

Who It Names or Affects

Employers who have court orders to pay money to employees or the state.
The Employment Development Department, which handles tax enforcement.
Employees who receive judgments against their employers.

Terms To Know

Civil penalty: A fine imposed by a government agency for breaking a law or regulation.

Limits and Unknowns

The bill was vetoed and the veto has been sustained, so it is not currently in effect.
It does not specify what happens if an employer disagrees with a judgment or believes they have already paid.
Details about how penalties are calculated or enforced are not provided.

Bill History

2026-03-02 California Legislative Information
Veto sustained.
2026-03-02 California Legislative Information
Stricken from file.
2025-10-13 California Legislative Information
In Senate. Consideration of Governor's veto pending.
2025-10-13 California Legislative Information
Vetoed by the Governor.
2025-09-16 California Legislative Information
Enrolled and presented to the Governor at 3 p.m.
2025-09-09 California Legislative Information
Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2713.) Ordered to engrossing and enrolling.
2025-09-08 California Legislative Information
In Senate. Concurrence in Assembly amendments pending.
2025-09-08 California Legislative Information
Read third time. Passed. (Ayes 79. Noes 0. Page 2991.) Ordered to the Senate.
2025-09-02 California Legislative Information
Read second time. Ordered to third reading.
2025-08-29 California Legislative Information
From committee: Do pass. (Ayes 15. Noes 0.) (August 29).
2025-08-20 California Legislative Information
August 20 set for first hearing. Placed on APPR. suspense file.
2025-07-03 California Legislative Information
Re-referred to Com. on APPR. pursuant to Assembly Rule 96.
2025-06-26 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on JUD.
2025-06-26 California Legislative Information
From committee: Do pass and re-refer to Com. on JUD. with recommendation: To consent calendar. (Ayes 7. Noes 0.) (June 25). Re-referred to Com. on JUD.
2025-06-05 California Legislative Information
Referred to Coms. on L. & E. and JUD.
2025-05-29 California Legislative Information
In Assembly. Read first time. Held at Desk.
2025-05-29 California Legislative Information
Read third time. Passed. (Ayes 38. Noes 0. Page 1325.) Ordered to the Assembly.
2025-05-27 California Legislative Information
Ordered to special consent calendar.
2025-05-23 California Legislative Information
Read second time. Ordered to third reading.
2025-05-23 California Legislative Information
From committee: Do pass. (Ayes 6. Noes 0. Page 1197.) (May 23).
2025-05-16 California Legislative Information
Set for hearing May 23.
2025-05-12 California Legislative Information
May 12 hearing: Placed on APPR. suspense file.
2025-05-02 California Legislative Information
Set for hearing May 12.
2025-04-30 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 13. Noes 0. Page 939.) (April 29). Re-referred to Com. on APPR.
2025-04-23 California Legislative Information
Re-referred to Com. on JUD.
2025-04-10 California Legislative Information
Set for hearing April 29 in JUD. pending receipt.
2025-04-09 California Legislative Information
From committee: Do pass and re-refer to Com. on RLS. (Ayes 5. Noes 0. Page 739.) (April 9). Re-referred to Com. on RLS.
2025-04-02 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on L., P.E. & R.
2025-03-28 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on L., P.E. & R.
2025-03-26 California Legislative Information
Set for hearing April 9.
2025-02-19 California Legislative Information
Referred to Coms. on L., P.E. & R. and TRANS.
2025-02-13 California Legislative Information
From printer. May be acted upon on or after March 15.
2025-02-12 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 355, Pérez.
Judgment debtor employers: Employment Development Department.
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.

Current Bill Text

Read the full stored bill text

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