California’s first paycheck starts a 15-day EDD clock. Workers’ comp is due before anyone clocks in.

The $100 / 15-day EDD clock

Unemployment Insurance Code § 675 defines a commercial employer as an employing unit that, for some portion of a day in the current or preceding calendar year, has one or more employees in employment and pays wages for employment in excess of one hundred dollars ($100) during any calendar quarter.

§ 1086 is the registration clock. The EDD restates it in plain language: if you operate a business and hire employees, you must register as an employer within 15 days when you pay more than $100 in wages in a calendar quarter. Household employers are a different $750 cash-wage test on that same EDD page. This scorecard is the commercial path.

EDD’s example on that page: a sole proprietor who pays $75 in March has not crossed $100 in the first quarter. Paying $500 in April makes the business register effective April 1, because more than $100 was paid in the second quarter. Partnership draws are not wages on that page even if labeled as salary.

How you actually get the eight-digit number

The primary path is e-Services for Business. EDD Step 3 says: enroll, log in, choose New Employer, then register for an Employer Payroll Tax Account Number. After registration you receive an eight-digit employer payroll tax account number (example format 000-0000-0), also called a State Employer Identification Number (SEIN). You need that number for returns, wage reports, payments, and account updates.

A paper alternate still exists: the Commercial Employer Account Registration and Update Form (DE 1). EDD says most commercial employers should use that form if they cannot register online, and that mail-in registration may take 10–14 days. Do not submit DE 1 until $100 in wages has been paid. EDD does not publish a registration fee for opening the employer payroll tax account. We will not invent one.

New hire: DE 34 within 20 calendar days

The New Employee Registry page requires employers to report newly hired employees within 20 calendar days of the start-of-work date — the first day services were performed for wages. Rehires after a separation of at least 60 consecutive days follow the same 20-day clock. The report is DE 34. UIC § 1088.5 is the statute. Electronic filers through e-Services must submit two monthly reports not less than 12 days and not more than 16 days apart. EDD publishes a $24 penalty per unreported employee, and $490 if the failure is an intentional agreement not to report. Those are EDD’s published NER penalties, not a software fee.

Workers’ compensation before anyone clocks in

DIR’s Before the First Employee Starts Work page lists workers’ compensation insurance — or state approval to self-insure — among the requirements that apply before an employee begins work. Labor Code § 3700 is the duty to secure payment of compensation. The DWC employer FAQ says that if a business employs one or more employees, it must satisfy that requirement.

Labor Code § 3700.5(a) makes knowing failure to secure compensation a misdemeanor, punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the premium that would otherwise have been due, but not less than ten thousand dollars ($10,000), or by both. We quote that floor. We do not add extra penalties the statute does not state on this page.

How Gusto and Patriot describe California

Confirm the live account on e-Services and the live coverage on DIR.

Gusto, labeled vendor copy (Gusto help, Aug 31 2026). Gusto’s California help article says it works with Middesk to register state income-tax withholding and state unemployment insurance when you do not already have a California account. After that, Gusto still asks the employer to enter the eight-digit EDD account number (format 123-4567-8) and the agency-assigned UI rate, and to exclude Employment Training Tax (ETT) from that rate field. The same article lists DE 9, DE 9C, DE 88, and DE 34 among forms it files or reports. Middesk’s registration does not include TPA or power-of-attorney setup. Read Gusto’s article. See Gusto on the directory.

Patriot, labeled vendor copy (Patriot help, Aug 31 2026). Patriot’s California help article tells the employer to register with EDD through e-Services and states the 15-day / $100 clock. Full Service claims DE 9 and DE 9C after Form 8655 and TPA authorization. The same article puts DE 34 on the employer. We do not print Patriot’s published new-employer SUTA percentage as an EDD fact. Read Patriot’s article. See Patriot on the directory.

What this page does not do

• It does not invent an EDD registration fee.
• It does not publish a new-employer unemployment rate from a vendor help page as if EDD wrote it.
• It does not treat a payroll login as workers’ compensation insurance.
• It does not publish aggregate star ratings.