Bernick

Hunt Building Corporation (Hunt) sued Ray Remy, former Director of the California Employment Development Department (EDD), to recover an assessment for contributions to unemployment insurance, disability insurance and employment training, as well as personal income tax withholding, for work performed on federal land by unlicensed subcontractors engaged by Hunt. The trial court entered judgment for Hunt, requiring EDD to refund $38,714.28 plus prejudgment interest.

EDD appeals. We hold the United States Congress has expressly deferred to state unemployment compensation laws regarding contracting services performed on federal land, allowing states to apply those laws to the same extent as if the work had not been performed on federal land. We further hold unlicensed subcontractors and their employees are deemed statutory employees of a general contractor pursuant to Unemployment Insurance Code sections 621.5 and 13004.5. We conclude EDD may properly assess a general contractor for unpaid contributions and tax withholding for the employees of unlicensed subcontractors for services performed on federal land. Accordingly, we reverse the judgment.

Factual and Procedural…