Employment: taxes and contributions: limited liability company.

Existing law requires employers to withhold tax and make contribution amounts with respect to unemployment insurance, disability insurance, employee training funding, and personal income tax from the wages paid to their employees. Existing law, with specified exceptions, requires that the determination of the employer-employee relationship be made pursuant to common law principles. Existing law defines "employee" for those purposes to include, among other individuals, any officer of a corporation. This bill would additionally include any member of a limited liability company that is treated as a corporation for federal income tax purposes within that definition of "employee" for those purposes. However, the bill would specify that definition of "employee" does not include any member of a limited liability company that is treated as a partnership for federal income tax purposes. Existing law also defines "wages" for those purposes, and exempts from that definition certain remuneration. This bill would provide that wages include compensation, as defined, paid to a member of a limited liability company filing a federal corporate income tax return. By expanding the base of wages subject to unemployment insurance taxes, this bill would deposit additional moneys into the Unemployment Fund, a continuously appropriated fund, and would make an appropriation.