Initial Steps for Employers Expanding into the Golden State

With a state as large and diverse as California, it appeals to businesses. However, the state’s unique employment law requirements can pose challenges to employers new to the state. The following are some action items employers need to complete before their first employee starts working in California.

California Employer Identification Number

All employers in California must obtain an employer identification number (EIN) by filing a DE-1 Registration Form with the Employment Development Department. The EIN serves as the state equivalent of the federal tax identification number. The EIN is essential for reporting employment taxes and complying with other state requirements.

Workers’ Compensation Insurance Coverage

California requires that all employers either have workers’ compensation insurance or be authorized to self-insure. Failure to comply with this requirement may subject an employer to penalties. 

Required Registration, Certification or Licensing

In California, certain industries require employers to be registered, certified or licensed through various state agencies prior to operating a business. The California Division of Labor Standards Enforcement provides licensing or registration for the following industries:

• Farm labor contractors.
• Garment manufacturers.
• Talent agents.
• Employers of industrial homeworkers.
• Sheltered workshops.
• Studio teachers.
• Car washes.

Neda N. Dal Cielo and Veena Bhatia are attorneys with Jackson Lewis in Silicon Valley, Calif. © 2024 Jackson Lewis. All rights reserved. Reposted with permission.