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SB 921

Employment: employer contributions: employee withholdings: credit: agricultural employees.

2025-2026 Regular Session Introduced by Shannon Grove and 1 co-sponsor

SB 921 creates a refundable quarterly overtime credit for agricultural employers and requires disclosures of net wages after the credit to farm labor contractors, with contingent r

April 22 set for first hearing. Failed passage in committee. (Ayes 1. Noes 4. Page 4012.)
#employment #agriculturalemployees #credit #employeewithholdings #employercontributions
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WeVote Research Nonpartisan
Bill Summary · SB 921

Summary of SB 921 (2025-2026, California)

Main purpose and intent

SB 921 aims to support agricultural employers and their workers by creating a refundable credit for overtime wages paid to agricultural employees and by aligning employer reporting to reflect this credit. The bill follows and expands on the policy context of overtime for agricultural workers and seeks to provide a counterbalance to economic pressures facing California farming. It also imposes new disclosure requirements on farm labor contractors to show net and gross wages after applying any related credit.

Key provisions and changes

  • New credit for overtime wages (Division 6.1, commencing with Section 13200):

    • Employers with employees covered by Wage Order No. 14-2001 may claim a quarterly credit equal to the amount of overtime wages paid to those employees in that quarter.
    • Overtime wages are defined as the difference between the overtime rate and the regular rate of pay.
    • The credit is claimed on the employer’s:
    • Report of contributions, quarterly return, and report of wages, or
    • Electronic funds transfer (as specified by the Department).
    • The bill specifies that this credit does not change the amount of taxes withheld from employees nor the employer’s overall tax liability beyond the credit; it is a separate credit against contributions.
    • The credit is designed to operate without requiring an additional appropriation of funds, but implementation of any related refunds is contingent on legislative funding.

  • Refund mechanism for excess credits (Unemployment Insurance Code, Section 1585.6):

    • If the total credit claimed in a quarter exceeds the amount that would have been remitted for that quarter for employee withholdings, a refund is available for the excess.
    • Refunds are contingent upon appropriation; without sufficient funding, refunds would not be provided.

  • Disclosure changes for farm labor contractors (Labor Code, Section 1695.55):

    • Payroll records provided to growers must disclose net and gross wages “less the amount of credit the farm labor contractor received pursuant to Section 13200,” in addition to total hours worked and earnings.
    • Growers must retain these payroll records for three years after a contract ends (existing obligation retained).

  • Impact on farm labor contractors (enforcement):

    • The added requirement to disclose net wages after credit could create additional compliance obligations and potential penalties for violations, contributing to a state-mandated local program.

  • Concurrent regulatory framework (new Division 6.1):

    • Establishes the credit framework and specifies administration and definitions.
    • Clarifies that the credit does not alter employee tax withholding or the employer’s core tax obligations, and that no new taxes are required to be paid by employees.

  • Legislative findings and policy context:

    • The bill includes findings about economic challenges facing California agriculture, drought-driven farm pressures, and the overtime context for agricultural workers.
    • It notes prior overtime policies (Phase-In Overtime for Agricultural Workers Act of 2016) and the intent to support agricultural employees through public financial support of overtime wages.

Who is affected

  • Agricultural employers with employees covered by Wage Order No. 14-2001:
    • May claim the overtime credit quarterly.
    • Must report the credit on required contributions and wage reports or via electronic transfers.
  • Farm labor contractors:
    • Must adjust payroll disclosures to show wages net of the credited amount, affecting how payroll records are provided to growers.
  • Growers/agricultural employers contracting with farm labor contractors:
    • Must retain payroll records reflecting the credit impact for at least three years.
  • Employees (agricultural workers):
    • Their overtime wages drive the credit; the law maintains that employee withholding and tax liability otherwise remain unchanged by the credit.

Procedural and timeline aspects

  • ** Legislative status and timeline:**
    • Introduced January 28, 2026.
    • Referred to the Committee on Labor, Public Employment and Recreation (L., P.E. & R.) and scheduled for hearings in April 2026.
    • As of April 22, 2026, the bill failed passage in the committee on a 1-4 vote (Ayes 1, Noes 4), with the first hearing set for April 22.
  • Implementation and funding:
    • The refund provision (Section 1585.6) is contingent on appropriation in the annual Budget Act or other statute.
    • The overall credit program requires Department of Economic Development (EDD) regulations for implementation.

Fiscal considerations

  • The bill contemplates refunds of excess credit, contingent on funding, which could entail fiscal outlays if the credit exceeds the quarter’s payroll remittance.
  • No direct new taxes are imposed; the design keeps employee withholding intact and creates a new refundable credit mechanism for employers.

If you’d like, I can adapt this into a one-page briefing for policymakers or a plain-language explainer for workers and employers, with a quick comparison to similar programs in Oregon or New York.

Compiled from official sources — confirm details with the bill’s official record.

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