California EDD Audit Resources for Business Owners

Practical guidance on California EDD payroll tax audits, worker classification, independent contractors, audit records, assessments, appeals, and other employment tax issues that can affect your business.

Understand the EDD Audit Process Before You Respond

An EDD payroll tax audit can involve much more than reviewing payroll tax returns. Depending on the scope of the examination, the auditor may review worker classification, independent contractor payments, payroll records, Forms 1099, general ledger accounts, business tax returns, and other financial information.

These resources are designed to help California business owners understand what the EDD may be examining, what records may be requested, how worker classification issues can develop, and what options may be available when the audit results in disputed findings or an assessment.

Featured EDD Audit Resources

EDD Audit Process Topics

Many business owners first begin researching an EDD audit after receiving a notice or records request. Important topics include:

• What to do after receiving an EDD audit notice
• How the California EDD audit process works
• What happens during the EDD opening conference
• Records the EDD may request during an audit
• Questions an EDD auditor may ask about your business and workers
• How far back an EDD payroll tax audit may reach
• What happens when the auditor identifies potential payroll adjustments

Worker Classification & Independent Contractor Resources

Worker classification is one of the most important issues that can arise in an EDD payroll tax audit. Our resource library covers topics including:

• EDD independent contractor audits
• 1099 workers and California employment tax audits
• The California ABC test
• Exceptions to the ABC test
• The business-to-business contractor exception
• The Borello worker classification test
• How the EDD evaluates actual working relationships
• What happens when multiple contractors are reclassified
• Payroll tax consequences of worker reclassification

EDD Assessments, Petitions & Appeals

If an EDD audit results in a disputed assessment, important procedural rights and deadlines may apply. Topics include:

• Understanding an EDD payroll tax assessment
• Reviewing worker classification findings before they become final
• EDD Petitions for Reassessment
• California Unemployment Insurance Appeals Board tax appeals
• Administrative hearings involving EDD payroll tax disputes
• Challenging disputed payroll calculations
• Interest and penalties associated with EDD assessments
• Preserving appeal rights before deadlines expire

EDD Audit Issues by Industry

Worker classification and payroll tax issues can vary considerably by industry. As this resource library expands, we will address EDD audit issues involving businesses such as:

• Real estate brokerages and property-related businesses
• Construction companies and skilled trades
• Transportation and trucking businesses
• Restaurants and hospitality businesses
• Professional and consulting firms
• Personal and home service businesses
• Businesses that regularly use independent contractors or subcontractors

Using This EDD Audit Resource Library

These resources provide general educational information about California EDD payroll tax audits and related employment tax issues. Every audit depends on its own facts, records, workers, audit period, and procedural posture.

If your business is currently under audit, the most useful starting point is usually the notice or records request you have already received. Understanding what the EDD is asking for and where the case currently stands can help determine which issues require immediate attention.

Need Help With a California EDD Audit?

If you have received an EDD audit notice, records request, proposed assessment, or worker classification determination, we can help you understand the issues and determine the next steps.