Employment: employer contributions: employee withholdings: credit: agricultural employees.

Plain English Breakdown

The official source material does not provide details on penalties for claiming too much in credits or specific requirements regarding regular wage reports, leaving these points unclear.

Employer Credit for Agricultural Workers' Overtime

This law allows employers who hire agricultural workers to claim a tax credit equal to the overtime wages they pay, but not more than what would normally be withheld in taxes.

What This Bill Does

• Allows employers to get a tax break for paying extra money (overtime) to certain farm workers.
• Requires this tax break to be reported on specific forms or through electronic payments.
• Limits the total amount of the tax break an employer can claim each quarter to what they would normally pay in taxes.

Who It Names or Affects

• Employers who hire agricultural workers.
• Agricultural employees who receive overtime pay.

Terms To Know

Overtime Wages

Extra money paid to workers for working more than the usual number of hours in a day or week.

Tax Credit

A reduction in the amount of tax an employer has to pay, based on certain expenses or payments made.

Limits and Unknowns

• The bill does not specify how much overtime workers must earn for employers to claim this credit.
• It is unclear if there are any penalties for claiming too much in credits.
• The exact forms and methods of reporting the tax credit have not been detailed.

Official Summary Text

SB 628, as amended, Grove.
Employment: employer contributions: employee withholdings: credit: agricultural employees.
The Personal Income Tax Law imposes taxes on taxable income, as provided. Under existing law, every 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, is required to deduct and withhold from those wages, except as provided, for each payroll, a tax computed in an amount substantially equivalent to the amount reasonably estimated to be due under the Personal Income Tax Law. Under existing law, every employer required to withhold those taxes is required to, for each calendar quarter, file a withholding report, a quarterly return, and a report of wages in a form prescribed by the Employment Development Department, and pay over the taxes required to be withheld.
This bill would authorize an employer to claim a credit in an
amount equal to the amount of overtime wages, as defined, paid during that quarter to specified agricultural employees covered by a certain wage order. The bill would require the credit to be claimed on the employer’s report of contributions, quarterly return, and report of wages, or in an electronic funds transfer, as specified. The bill would prohibit the total amount claimed in any given quarter from exceeding the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings.

Current Bill Text

Download Bill PDF