(a) If the director finds that an individual or business entity has exchanged money on behalf of an employer and the employer used the cash proceeds from the exchange to conceal the payment of wages with an intent to evade a provision of this code, the director shall assess a penalty against the individual or business entity in an amount equal to 100 percent of any assessed contributions that were based on the concealed wages. An employing unit subject to a penalty under Section 1128 shall not be assessed a penalty under this section for the same violation.
(b) For purposes of this section, “business entity” means a partnership, corporation, association, limited liability company, or Indian tribe (as described by Section 3306(u) of Title 26 of the United States Code).
(c) The penalty applies only when there is evidence that the individual or business entity who exchanged money knew that the employer intended to use the cash proceeds from the exchange to conceal the payment of wages and thereby avoid the payment of contributions or taxes required by this code.
(Amended by Stats. 2015, Ch. 303, Sec. 517. (AB 731) Effective January 1, 2016.)
Last modified: October 25, 2018