California Will Waive Penalties for Employers Affected by Bank Closure

On March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver. The California Employment Development Department (EDD) is waiving penalties for employers that are unable to make payroll deposits timely because of the SVB closure [EDD, News Release No. 23-10, 3-10-23].

Affected employers can submit a waiver request through e-Services for Business or in writing. Additional information is available in the Information Sheet Waiver of Penalty Policy or by contacting the Taxpayer Assistance Center.

On March 12, an additional bank (Signature Bank) was closed in New York. These bank failures impact payroll professionals and the APA offers best practices for employers facing issues with meeting their payroll obligations. One tip is to watch for penalty relief granted by state agencies, such as the EDD.

Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you.

Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.