Here is from Spidell’s Big Blue Answer Book. Use Form 938P if workers reported income and paid the tax.
No delinquency penalty if worker paid tax.
The EDD will abate the delinquency penalty under UIC §1135, in addition to the personal income tax, if:
A worker was improperly treated as an independent contractor and reported the income on a California individual tax return; or
Payments to employees were misclassified and the EDD assessed PIT.
In an employee/independent contractor audit, for example, the EDD abates assessments for PIT withholding for any individual who files EDD Form DE 938P, Claim for Adjustment or Refund of Personal Income Tax. Form DE 938P certifies that the worker has included the amount of earnings on his or her California return.
When the EDD assesses additional tax (UI, ETT, SDI, or PIT), it imposes a 15% penalty when the assessment becomes delinquent.