Employees

This section is used to identify the applicant’s current number of full-time and part-time employees, the salary and tax year of hiring for new full-time employees, as well as the number of full-time employees, determined on an annual full-time equivalent basis, employed by the applicant in its “base year” as well as the number of full-time employees, determined on an annual full-time equivalent basis, to be employed by the applicant in its current tax year and four subsequent tax years. This information will be used to calculate the applicant’s “aggregate employee compensation,” which is automatically calculated in this section.

Note: The information entered in this section should represent a good faith projection of the total number of full-time employees the applicant will employ in California. The amounts entered will be used as the basis for the California Competes Tax Credit agreements. Any applicant that reduces its hiring projections by more than 5 percent at the written agreement phase may be rejected for the credit.

Key Definitions:

Full-time Employee - An individual that is paid wages for services in California of not less than an average of 35 hours per week.

Salary - The amount of monetary compensation a full-time employee is paid by the applicant per year and does not include tips, overtime, bonuses, benefits, or other compensation of any kind. When answering the questions that request the minimum and average salary of California full-time employees hired/to be hired, use the salary the full-time employee(s) would make in a full year of employment, without regard to the projected date of hire.

Base Year - The applicant’s taxable year immediately before the applicant’s taxable year in which the application is submitted. The last day during an application period in which an applicant may submit an application is deemed the date an application is submitted. For applicants who first commence doing business in California during the taxable year in which an application is submitted, the number of full-time employees for the base year shall be zero.

Annual Full-time Equivalent - Defined as either of the following:
• In the case of a full-time employee paid hourly wages, “annual full-time equivalent” means the total number of hours worked for the applicant by the employee during the taxable year, not to exceed 1,750 hours per employee, divided by 1,750.

• In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the applicant by the employee during the taxable year, not to exceed 50, divided by 50.

Documents Needed:

• Payroll records for full-time employees employed by the applicant in its prior tax year

• Projected number, dates, and salaries for new full-time employees in the applicant’s current and four subsequent tax years as well as employee attrition projections or known future reductions of employees

A. Existing Number of Full-time and Part-time Employees in California / US

The number of full-time employees that the applicant currently employs in California as of the date the application is submitted. This number is not used for any calculations and is only used to provide a snapshot of the applicant’s current employment levels. The number of US full-time and part-time employees should be inclusive of the California employees.

B. Number, Minimum and Average Salary of Full-time California Employees Hired/Proposed to be Hired

Questions 5-20 request the projected hiring information for full-time California employees for the applicant’s current tax year and four subsequent tax years. When answering these questions, use the salary the full-time employee(s) will make in a full year of employment, without regard to the projected date of hire. Please refer to the definition of “salary” above.

C. Base Year Calculation

Questions 22-27 relate to the applicant’s base year. These questions pertain to the applicant’s total number of full-time employees in California and not just employees related to the project. The system will insert the applicant’s base year which is determined by the answers to the questions in the create application section discussed previously. The answers to these questions will determine how many California full-time employees the applicant employed, determined by an annual full-time equivalent calculation, in the base year in order to measure its growth in full-time California employees in future tax years.

D. Current Tax Year and Four Subsequent Tax Years

Questions 28-57 relate to the applicant’s current tax year and four subsequent tax years. These questions pertain to the applicant’s total number of full-time employees to be employed in California and not just employees related to the project. The answers to these questions will be used to determine the applicant’s net increase of California full-time employees, determined by an annual full-time equivalent calculation, compared to the number of California full-time employees employed by the applicant in its base year, also determined by an annual full-time equivalent calculation. The system will automatically compute and display the number of full-time employees, determined on an annual full-time equivalent basis, for the applicant’s current and four subsequent tax years. The system will then use this information and the average annual salary information previously entered to compute and display the applicant’s “Aggregate Employee Compensation” at the end of the section.