Unemp. Ins. Code, § 1110.1

(a) Notwithstanding any other provision of law, the director shall allocate any payment to the department relating to liability for contributions, withheld personal income tax, penalty and interest, in accordance with any designation made by the payer at or before the time the payment is made to the department.

(b) Notwithstanding any other provision of law, if a payer, at or before the time a payment is made to the department, does not designate an obligation to which the payment is to be applied, the director shall allocate the payment in the following order of priority:

(1) Employer contributions required under Sections 976 and 976.6, worker contributions, and withheld personal income tax, in proportion to the aggregate amount of such employer contributions, worker contributions, and withheld personal income tax due.

(2) Penalties and interest due under this division, and penalties and interest due based upon withheld personal income tax.

(c) The director may apply the following standards in making any allocation under this section:

(1) First priority may be given to the extinction of obligations due at the time of payment with respect to which a lien has not been recorded, in the order inverse to that in which the obligation became due.

(2) Second priority may be given to the extinction of obligations due at the time of payment with respect to which a lien has been recorded. If more than one lien has been recorded, the obligations covered by the most recent lien recorded may be extinguished in full before any payment is allocated to obligations covered by the next prior lien recorded.