HOUSE BILL REPORT

HB 654

BYRepresentatives Patrick, Wang and Sayan; by request of Employment Security Department

Changing provisions relating to experience rating for purposes of unemployment insurance contributions by employers.

House Committe on Commerce & Labor

Majority Report:     Do pass.  (11)

     Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE FEBRUARY 25, 1987

BACKGROUND:

The experience rating system for unemployment compensation includes provisions for partial noncharging of the accounts of employers who have employees that are identified as marginally attached to the labor force.  The law also provides that the full relief of this noncharging provision will be accelerated by estimating the charges from prior years.  These acceleration procedures were found not to conform with federal law by the secretary of the U.S. Department of Labor.  Because the law contained a federal severability clause, the acceleration procedures are inoperative.

To qualify for experience rating, an employer may not be delinquent in paying any contributions due for unemployment compensation.  The department may, however, disregard unpaid amounts if the amount is less than twenty-five dollars or less than one-half of one percent of the employer's yearly tax.

SUMMARY:

The inoperative section is repealed that provides for accelerated relief under the noncharging provisions for employers with employees marginally attached to the labor force.

The Employment Security Department is allowed to disregard delinquent payments of less than one hundred dollars for the purposes of determining an employer's eligibility for experience rating.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Graeme Sackrison and Kathy Countryman, Employment Security Department.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The obsolete section of the experience rating provisions should be removed.  The Employment Security Department's authority to disregard small delinquencies for experience rating purposes needs updating.

House Committee - Testimony Against: None Presented.