Terms and Source Notes for Size of Business Report
Definition of Terms:
Employment, UI Insured
Employment, or the number of employees, refers to the number of persons earning wages during the pay period which includes September 12th, regardless of the type of payroll (daily, weekly, semi-monthly, or monthly) used by each reporting unit.
Any employer employing one or more persons, who pays wages in excess of $100 during a calendar quarter, and who is not engaged in an exempt activity, is subject to the Unemployment Insurance provision of the California Unemployment Insurance code. Each subject employer is required to submit a quarterly contribution report giving the number of insured wage earners on the payroll in the pay period including the twelfth day of each month of the quarter, and giving the total amount of insured payroll paid during the quarter. Employment data in this report is as of September 12th.
Individuals excluded from Unemployment Insurance coverage are:
- interstate railroad employees,
- self-employed individuals,
- some domestic service in private homes,
- children under 18 employed by a parent,
- persons employed by a son, daughter, or spouse,
- certain athletes during off-season training,
- illegal aliens,
- professional and non-professional employees of public and nonprofit schools during periods between academic years or terms,
- all school employees of public and nonprofit schools during vacation or holidays,
- and certain other small groups of workers.
The industry titles and classification used in this report for the years 1994-2000 are those appearing in the 1987 Standard Industrial Classification Manual. Beginning in 2001, the North American Industry Classification System is used. In Tables 2A and 2B, the term "Unclassifiable establishments" includes establishments which cannot be classified in a specific industry.
Payroll, UI Insured
Payroll shown in this report is the total amount of wages paid to employees by employers covered by the Unemployment Insurance code during the entire third quarter of the year, irrespective of any taxing limit. Payroll is not limited to wages but may include share payments, bonuses, or lump sum vacation payments.
Business (Reporting Unit)
A business, or reporting unit, is an economic unit or establishment primarily performing one economic activity, usually at one physical location.
A multi-establishment employer is one with more than one establishment reporting under the same Unemployment Insurance account number within the State and where the sum of the employment in all of the secondary establishments is ten or more. The primary establishment is that with the greatest number of employees.
Additional Information about the Data:
Source of Data
The information shown in this report is derived from data submitted for the third calendar quarter of the year by insured employers on Contribution Returns and on Employment and Payroll Distribution Schedules.
- Employers who reported no payroll during the third calendar quarter are excluded from this report.
- Wages paid by a predecessor employer having 50 or more employees in July or August are added to those paid by the successor, with the combination counted as a single unit and classified according to the size of the successor's September employment.
- Successor-Predecessor accounts having fewer than 50 employees are not combined. The predecessor automatically falls into the "0" employment category, regardless of the July or August employment, while the successor is classified by September employment.
- Detail may not add to total due to independent rounding.
Special Note on 1996 data for 0-4 Size Class
In 1994 to 1995, there was an internal delay within EDD in the processing of "Out of Business" notices. This resulted in an inflated count in the number of reporting units in the 0-4 size group in the 1995 data. Once these were reported, they were removed from the counts, affecting the 1996 counts. Therefore, the change in the reporting units counts from 1994 to 1995 is probably too high and the change from 1995 to 1996 is too low.
Users of these data should be aware of this anomaly and may want to make adjustments or provide explanations with their tabulations. Adjustments may be made by using the percent change shown for the employment and adjusting the count of reporting units by the same percentage.
Historical Changes to UI Coverage
Changes in the California Unemployment Insurance Code since its inception have extended Unemployment Insurance coverage to increasingly larger groups of workers.
In 1972, workers of nonprofit organizations, civil service employees of the State, employees of State hospitals and colleges and the University of California, classified employees of school districts, and some local government employees were covered.
In 1976, coverage was extended to all agricultural employees.
Enactment of Assembly Bill 644, effective January 1, 1978, extended coverage to the following:
- All employees of State and local government (except certain elected and appointed officials, certain part-time employees in policy-making or advisory positions, legislators, judges, members of the State National Guard, inmates of custodial and penal institutions, and those temporarily hired to meet emergency situations.)
- Employees of nonprofit elementary, secondary, and vocational schools.
- Domestic workers of private household employers who pay wages of $1,000 or more per calendar quarter.
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