Rev. & Tax. Code, § 18677

(a) For purposes of this article, if a lender, surety, or other person, who is not an employer under those sections with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of the employee or employees, the lender, surety, or other person shall be liable in his or her own person and estate to this state in a sum equal to the taxes (together with interest) required to be deducted and withheld from the wages by the employer.

(b) If a lender, surety, or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of the employer, with actual notice or knowledge that the employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this part to be deducted and withheld by the employer from those wages, the lender, surety, or other person shall be liable in his or her own person and estate to the State of California in a sum equal to the taxes (together with interest) which are not paid over to this state by the employer with respect to the wages. However, the liability of the lender, surety, or other person shall be limited to an amount equal to 25 percent of the amount so supplied to or for the account of the employer for that purpose.

(c) Any amounts paid to this state pursuant to this section shall be credited against the liability of the employer.