What Happens After I File My EDD Petition? Part Two
By Robert S. Schriebman
This is Part Two of a two part article discussing your options after you file your EDD petition. In Part One we discussed what to do immediately after you received an EDD Notice of Assessment. Once you have received the EDD Notice of Assessment you have thirty days to timely file your petition with the California Unemployment Insurance Appeals Board (CUIAB). This second part of the series assumes that you did file a timely petition with the CUIAB.
After a petition is filed the CUIAB sends you a document entitled Notice of Receipt of Petition. This notice informs you whether or not your petition was timely received. The Notice also assigns you one or more case numbers that you are to use whenever you file any documents with the CUIAB.
If you do nothing after filing your petition you will eventually receive from the CUIAB a notice assigning your matter to one of many hearing centers. Thereafter you will receive a Notice setting your case for a hearing before an administrative law judge.
If you do nothing and just wait for the notice of a hearing date you will have done yourself a great disservice. There is much to be done after a petition is filed and no time to lose. After receiving the Notice of Receipt of Petition you must be proactive. You should contact the EDD office that conducted the audit and specifically the auditor assigned to your matter. You must request a copy of your entire EDD audit file. This should include the following documents:
- All final Notices of Assessment.
- The complete audit report.
- A breakdown of the four basic assessments listed on each and every Notice of Assessment. This includes personal income tax, employment training tax, disability insurance, and unemployment insurance.
- An explanation as to why the EDD assessed each and every penalty against you.
Include with your document rests a copy of the Notice of Receipt of Petition. This informs the auditor that the petition has been filed, and the EDD must comply with your formal written discovery request.
The EDD will send you a copy of your audit report, etc., and there may be a charge for photocopying. Pay the charges and obtain your files. Review your files very carefully, especially the Audit Report because that is the basis of how the EDD reached its assessment.
Yogi Berra is famous for having said, “When you reach a fork in the road take it.” You have now come to that fork. The first avenue is to consider approaching the EDD Settlement Office in an attempt to reach a resolution of the matter without the stress and expense of a formal hearing before an administrative law judge (ALJ). The second avenue is to bypass the settlement process and go straight for an ALJ hearing. There is also a third avenue – first try for a settlement, and if you are not pleased with the results you can request an ALJ hearing.
Let us discuss the settlement avenue. I favor this approach because I have found that the Settlement Office is fair and pleasant to deal with. I suggest that you read my article about the EDD Settlement Office posted on this website before you attempt a settlement. Let’s face it, a settlement is just that – a settlement. It means you will have to pay some money to the EDD to resolve your matter. The payment of settlement money may be the best choice for you. You may not like the ALJ assigned to your case and the ALJ may not like you either! You could lose and have a big lawyer bill at the same time.
A settlement also means that you will agree to treat all prior independent contractors as employees in the future. Settlements must be paid in full shortly after the settlement agreement is approved by the CUIAB. Many settlement agreements have a provision stating that if you miss the payment deadline you must pay the full amount of the original assessment. You can not take the terms of the settlement agreement lightly.
If you elect to bypass the settlement process and have a formal hearing before an ALJ, my best advice to you is to hire experienced, professional representation – do not go it alone. An ALJ hearing is formal. It is a trial. You are allowed to testify and you are allowed to produce witnesses. At the hearing the EDD will usually be represented by the assigned auditor, a supervisor, and even an EDD attorney. Evidence will be received by the judge, and all witnesses will be subject to cross examination.
After the ALJ hears the evidence on both sides, a decision will be issued in writing within a month or so after the hearing. It is very rare for an ALJ to reach a decision during the hearing. If the ALJ rules against you, you will be afforded an opportunity to file an appeal with the Appeals Division of the CUIAB. If the EDD loses, it too will be afforded a right to an appeal.
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Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.