Title of Rule and Other Identifying Information: WAC 192-310-160 describes the procedures by which corporations can
exempt their officers from unemployment insurance coverage
beginning January 1, 2009.
THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THIS USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Juanita Myers, Employment Security Department, P.O. Box 9046, Olympia, WA 98507-9046 , AND RECEIVED BY December 23, 2008.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed change clarifies that only the exempted officers of a private corporation must be related by blood or marriage.
Reasons Supporting Proposal: The rule is clarified to show that a private company may exempt an unlimited number of corporate officers if the officers exempted are related by blood or marriage. It is not required that all officers of the corporation be related by blood or marriage whether exempted or not.
Statutory Authority for Adoption: RCW 50.12.010 and 50.12.040.
Statute Being Implemented: RCW 50.04.165.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Employment security department, governmental.
Name of Agency Personnel Responsible for Drafting: Juanita Myers, 212 Maple Park, Olympia, (360) 902-9665; Implementation and Enforcement: Nan Thomas, 212 Maple Park, Olympia, (360) 902-9303.
October 10, 2008
(2) The election to exempt corporate officers is effective immediately if made when the corporation first registers with the department as an employer under RCW 50.12.070. If the election to exempt corporate officers is made after that, the exemption is effective on January 1 of the following calendar year. The corporation must send written notice to the department by January 15 for the exemption to be effective on January 1 of that year. The exemption is not effective until filed with the department and will not be applied retroactively, except for the period from January 1 to January 15 if the notice is sent by January 15. A corporation is not eligible for refund or credit for periods before the effective date of the exemption.
(3) A public company as defined in RCW 23B.01.400 may exempt any bona fide corporate officer:
(a) Who is voluntarily elected or voluntarily appointed under the articles of incorporation or bylaws of the corporation;
(b) Who is a shareholder of the corporation;
(c) Who exercises substantial control in the daily management of the corporation; and
(d) Whose primary responsibilities do not include the performance of manual labor.
(4) A corporation that is not a public company may exempt eight or fewer bona fide corporate officers who voluntarily agree to be exempted from coverage and sign a form approved by the department verifying this. These corporate officers must be voluntarily elected or voluntarily appointed under the articles of incorporation or bylaws of the corporation and must exercise substantial control in the daily management of the corporation.
(5) A corporation that is not a public company may exempt any number of corporate officers if all exempted officers of the corporation are related by blood within the third degree or by marriage to a person related by blood within the third degree. If any of the corporate officers fail to qualify for this exemption because they are not related by blood or marriage as required, then none of the corporate officers may qualify under this subsection, although they may still qualify under subsection (4) of this section. This is an alternative and not an addition to exemptions under subsection (4) of this section.
For example, a husband and wife, their biological or adopted children or stepchildren, grandchildren, and great grandchildren, their brothers and sisters, their nephews and nieces, and the spouses of any of these people could qualify for exemption as corporate officers under this section without being limited to eight individuals. However, if any of the corporate officers exempted do not meet this test, then this subsection does not apply.
(6) This section does not apply to officers of a corporation covered by chapter 50.44 RCW (some nonprofit or government organizations) or chapter 50.50 RCW (Indian tribes).
[Statutory Authority: RCW 50.12.010 and 50.12.040. 07-23-127, § 192-310-160, filed 11/21/07, effective 1/1/09.]