BILL REQ. #: Z-0833.4
State of Washington | 61st Legislature | 2010 Regular Session |
Read first time 01/15/10. Referred to Committee on Labor, Commerce & Consumer Protection.
AN ACT Relating to correcting references in RCW 50.29.021(2)(c)(i), (c)(ii), and (3)(e), RCW 50.29.062(2)(b)(i)(B) and (2)(b)(iii), and RCW 50.29.063(1)(b) and (2)(a)(ii) to unemployment insurance statutes concerning employer experience rating accounts and contribution rates; amending RCW 50.29.062 and 50.29.063; reenacting and amending RCW 50.29.021; creating a new section; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 50.29.021 and 2009 c 493 s 1, 2009 c 50 s 1, and 2009
c 3 s 13 are each reenacted and amended to read as follows:
(1) This section applies to benefits charged to the experience
rating accounts of employers for claims that have an effective date on
or after January 4, 2004.
(2)(a) An experience rating account shall be established and
maintained for each employer, except employers as described in RCW
50.44.010, 50.44.030, and 50.50.030 who have properly elected to make
payments in lieu of contributions, taxable local government employers
as described in RCW 50.44.035, and those employers who are required to
make payments in lieu of contributions, based on existing records of
the employment security department.
(b) Benefits paid to an eligible individual shall be charged to the
experience rating accounts of each of such individual's employers
during the individual's base year in the same ratio that the wages paid
by each employer to the individual during the base year bear to the
wages paid by all employers to that individual during that base year,
except as otherwise provided in this section.
(c) When the eligible individual's separating employer is a covered
contribution paying base year employer, benefits paid to the eligible
individual shall be charged to the experience rating account of only
the individual's separating employer if the individual qualifies for
benefits under:
(i) RCW 50.20.050 (1)(b)(i) or (2)(b)(i), as applicable, and became
unemployed after having worked and earned wages in the bona fide work;
or
(ii) RCW 50.20.050 (1)(b) (v) through (x) or (2)(b) (v) through
(x).
(3) The legislature finds that certain benefit payments, in whole
or in part, should not be charged to the experience rating accounts of
employers except those employers described in RCW 50.44.010, 50.44.030,
and 50.50.030 who have properly elected to make payments in lieu of
contributions, taxable local government employers described in RCW
50.44.035, and those employers who are required to make payments in
lieu of contributions, as follows:
(a) Benefits paid to any individual later determined to be
ineligible shall not be charged to the experience rating account of any
contribution paying employer. However, when a benefit claim becomes
invalid due to an amendment or adjustment of a report where the
employer failed to report or inaccurately reported hours worked or
remuneration paid, or both, all benefits paid will be charged to the
experience rating account of the contribution paying employer or
employers that originally filed the incomplete or inaccurate report or
reports. An employer who reimburses the trust fund for benefits paid
to workers and who fails to report or inaccurately reported hours
worked or remuneration paid, or both, shall reimburse the trust fund
for all benefits paid that are based on the originally filed incomplete
or inaccurate report or reports.
(b) Benefits paid to an individual filing under the provisions of
chapter 50.06 RCW shall not be charged to the experience rating account
of any contribution paying employer only if:
(i) The individual files under RCW 50.06.020(1) after receiving
crime victims' compensation for a disability resulting from a nonwork-related occurrence; or
(ii) The individual files under RCW 50.06.020(2).
(c) Benefits paid which represent the state's share of benefits
payable as extended benefits defined under RCW 50.22.010(6) shall not
be charged to the experience rating account of any contribution paying
employer.
(d) In the case of individuals who requalify for benefits under RCW
50.20.050 or 50.20.060, benefits based on wage credits earned prior to
the disqualifying separation shall not be charged to the experience
rating account of the contribution paying employer from whom that
separation took place.
(e) Benefits paid to an individual who qualifies for benefits under
RCW 50.20.050 (1)(b) (iv) or (xi) or (2)(b) (iv) or (xi), as
applicable, shall not be charged to the experience rating account of
any contribution paying employer.
(f) With respect to claims with an effective date on or after the
first Sunday following April 22, 2005, benefits paid that exceed the
benefits that would have been paid if the weekly benefit amount for the
claim had been determined as one percent of the total wages paid in the
individual's base year shall not be charged to the experience rating
account of any contribution paying employer. This subsection (3)(f)
does not apply to the calculation of contribution rates under RCW
50.29.025 for rate year 2010 and thereafter.
(g) The forty-five dollar increase paid as part of an individual's
weekly benefit amount as provided in RCW 50.20.1201 shall not be
charged to the experience rating account of any contribution paying
employer.
(h) With respect to claims where the minimum amount payable weekly
is increased to one hundred fifty-five dollars pursuant to RCW
50.20.1201(3), benefits paid that exceed the benefits that would have
been paid if the minimum amount payable weekly had been calculated
pursuant to RCW 50.20.120 shall not be charged to the experience rating
account of any contribution paying employer.
(i) Training benefits paid to an individual under RCW 50.22.155
shall not be charged to the experience rating account of any
contribution paying employer.
(4)(a) A contribution paying base year employer, not otherwise
eligible for relief of charges for benefits under this section, may
receive such relief if the benefit charges result from payment to an
individual who:
(i) Last left the employ of such employer voluntarily for reasons
not attributable to the employer;
(ii) Was discharged for misconduct or gross misconduct connected
with his or her work not a result of inability to meet the minimum job
requirements;
(iii) Is unemployed as a result of closure or severe curtailment of
operation at the employer's plant, building, worksite, or other
facility. This closure must be for reasons directly attributable to a
catastrophic occurrence such as fire, flood, or other natural disaster;
(iv) Continues to be employed on a regularly scheduled permanent
part-time basis by a base year employer and who at some time during the
base year was concurrently employed and subsequently separated from at
least one other base year employer. Benefit charge relief ceases when
the employment relationship between the employer requesting relief and
the claimant is terminated. This subsection does not apply to shared
work employers under chapter 50.06 RCW; or
(v) Was hired to replace an employee who is a member of the
military reserves or National Guard and was called to federal active
military service by the president of the United States and is
subsequently laid off when that employee is reemployed by their
employer upon release from active duty within the time provided for
reemployment in RCW 73.16.035.
(b) The employer requesting relief of charges under this subsection
must request relief in writing within thirty days following mailing to
the last known address of the notification of the valid initial
determination of such claim, stating the date and reason for the
separation or the circumstances of continued employment. The
commissioner, upon investigation of the request, shall determine
whether relief should be granted.
Sec. 2 RCW 50.29.062 and 2009 c 225 s 1 are each amended to read
as follows:
Except as provided in RCW 50.29.063, predecessor and successor
employer contribution rates shall be computed in the following manner:
(1) If the successor is an employer, as defined in RCW 50.04.080,
at the time of the transfer of a business, the following applies:
(a) The successor's contribution rate shall remain unchanged for
the remainder of the rate year in which the transfer occurs; and
(b) Beginning January 1st following the transfer, the successor's
contribution rate for each rate year shall be based on a combination of
the following:
(i) The successor's experience with payrolls and benefits; and
(ii) Any experience assigned to the predecessor involved in the
transfer. If only a portion of the business was transferred, then the
experience attributable to the acquired portion is assigned to the
successor.
(2) If the successor is not an employer at the time of the
transfer, the following applies:
(a) For transfers before January 1, 2005:
(i) Except as provided in (ii) of this subsection (2)(a), the
successor shall pay contributions at the lowest rate determined under
either of the following:
(A) The contribution rate of the rate class assigned to the
predecessor employer at the time of the transfer for the remainder of
that rate year. Any experience relating to the assignment of that rate
class attributable to the predecessor is transferred to the successor.
Beginning with the January 1st following the transfer, the successor's
contribution rate shall be based on a combination of the transferred
experience of the acquired business and the successor's experience
after the transfer; or
(B) The contribution rate equal to the average industry rate as
determined by the commissioner, but not less than one percent, and
continuing until the successor qualifies for a different rate in its
own right. Assignment of employers by the commissioner to industrial
classification, for purposes of this subsection, must be in accordance
with established classification practices found in the North American
industry classification system issued by the federal office of
management and budget to the fourth digit provided in the North
American industry classification system.
(ii) If the successor simultaneously acquires the business or a
portion of the business of two or more employers in different rate
classes, its rate, from the date the transfer occurred until the end of
that rate year and until it qualifies in its own right for a new rate,
shall be the rate of the highest rate class applicable at the time of
the acquisition to any predecessor employer who is a party to the
acquisition, but not less than one percent.
(b) For transfers on or after January 1, 2005:
(i) Except as provided in (ii) and (iii) of this subsection (2)(b),
the successor shall pay contributions:
(A) At the contribution rate assigned to the predecessor employer
at the time of the transfer for the remainder of that rate year. Any
experience attributable to the predecessor relating to the assignment
of the predecessor's rate class is transferred to the successor.
(B) Beginning January 1st following the transfer, the successor's
contribution rate for each rate year shall be based on an array
calculation factor rate that is a combination of the following: The
successor's experience with payrolls and benefits; and any experience
assigned to the predecessor involved in the transfer. If only a
portion of the business was transferred, then the experience
attributable to the acquired portion is assigned to the successor if
qualified under RCW 50.29.010(6) by including the transferred
experience. If not qualified under RCW 50.29.010(6), the contribution
rate shall equal the sum of the rates determined by the commissioner
under RCW 50.29.025 (((2))) (1)(d)(ii) or (2)(d) and 50.29.041, if
applicable, and continuing until the successor qualifies for a
different rate, including the transferred experience.
(ii) If there is a substantial continuity of ownership, control, or
management by the successor of the business of the predecessor, the
successor shall pay contributions at the contribution rate determined
for the predecessor employer at the time of the transfer for the
remainder of that rate year. Any experience attributable to the
predecessor relating to the assignment of the predecessor's rate class
is transferred to the successor. Beginning January 1st following the
transfer, the successor's array calculation factor rate shall be based
on a combination of the transferred experience of the acquired business
and the successor's experience after the transfer.
(iii) If the successor simultaneously acquires the business or a
portion of the business of two or more employers with different
contribution rates, the successor's rate, from the date the transfer
occurred until the end of that rate year and until it qualifies in its
own right for a new rate, shall be the sum of the rates determined by
the commissioner under RCW 50.29.025 (1) (a) and (b) or (2) (a) and
(b), and 50.29.041, applicable at the time of the acquisition, to the
predecessor employer who, among the parties to the acquisition, had the
largest total payroll in the completed calendar quarter immediately
preceding the date of transfer, but not less than the sum of the rates
determined by the commissioner under RCW 50.29.025 (((2))) (1)(d)(ii)
or (2)(d) and 50.29.041, if applicable.
(3) With respect to predecessor employers:
(a) The contribution rate on any payroll retained by a predecessor
employer shall remain unchanged for the remainder of the rate year in
which the transfer occurs.
(b) In all cases, beginning January 1st following the transfer, the
predecessor's contribution rate or the predecessor's array calculation
factor for each rate year shall be based on its experience with
payrolls and benefits as of the regular computation date for that rate
year excluding the experience of the transferred business or
transferred portion of business as that experience has transferred to
the successor: PROVIDED, That if all of the predecessor's business is
transferred to a successor or successors, the predecessor shall not be
a qualified employer until it satisfies the requirements of a
"qualified employer" as set forth in RCW 50.29.010.
(4) For purposes of this section, "transfer of a business" means
the same as RCW 50.29.063(4)(c).
Sec. 3 RCW 50.29.063 and 2009 c 225 s 2 are each amended to read
as follows:
(1) If it is found that a significant purpose of the transfer of a
business was to obtain a reduced array calculation factor rate, then
the following applies:
(a) If the successor was an employer at the time of the transfer,
then the experience rating accounts of the employers involved shall be
combined into a single account and the employers assigned the higher of
the predecessor or successor array calculation factor rate to take
effect as of the date of the transfer.
(b) If the successor was not an employer at the time of the
transfer, then the experience rating account of the acquired business
must not be transferred and, instead, the sum of the rate determined by
the commissioner under RCW 50.29.025 (((2))) (1)(d)(ii) or (2)(d) and
50.29.041, if applicable, shall be assigned.
(2) If any part of a delinquency for which an assessment is made
under this title is due to an intent to knowingly evade the
successorship provisions of RCW 50.29.062 and this section, then with
respect to the employer, and to any business found to be knowingly
promoting the evasion of such provisions:
(a) The commissioner shall, for the rate year in which the
commissioner makes the determination under this subsection and for each
of the three consecutive rate years following that rate year, assign to
the employer or business the total rate, which is the sum of the
recalculated array calculation factor rate and a civil penalty
assessment rate, calculated as follows:
(i) Recalculate the array calculation factor rate as the array
calculation factor rate that should have applied to the employer or
business under RCW 50.29.025 and 50.29.062; and
(ii) Calculate a civil penalty assessment rate in an amount that,
when added to the array calculation factor rate determined under (a)(i)
of this subsection for the applicable rate year, results in a total
rate equal to the maximum array calculation factor rate under RCW
50.29.025 plus two percent, which total rate is not limited by any
maximum array calculation factor rate established in RCW 50.29.025
(1)(b)(ii) or (2)(b)(ii);
(b) The employer or business may be prosecuted under the penalties
prescribed in RCW 50.36.020; and
(c) The employer or business must pay for the employment security
department's reasonable expenses of auditing the employer's or
business's books and collecting the civil penalty assessment.
(3) If the person knowingly evading the successorship provisions,
or knowingly attempting to evade these provisions, or knowingly
promoting the evasion of these provisions, is not an employer, the
person is subject to a civil penalty assessment of five thousand
dollars per occurrence. In addition, the person is subject to the
penalties prescribed in RCW 50.36.020 as if the person were an
employer. The person must also pay for the employment security
department's reasonable expenses of auditing his or her books and
collecting the civil penalty assessment.
(4) For purposes of this section:
(a) "Knowingly" means having actual knowledge of or acting with
deliberate ignorance or reckless disregard for the prohibition involved
and includes, but is not limited to, intent to evade,
misrepresentation, or willful nondisclosure.
(b) "Person" means and includes an individual, a trust, estate,
partnership, association, company, or corporation.
(c) "Transfer of a business" includes the transfer or acquisition
of substantially all or a portion of the operating assets, which may
include the employer's workforce.
(5) Any decision to assess a penalty under this section shall be
made by the chief administrative officer of the tax branch or his or
her designee.
(6) Nothing in this section shall be construed to deny an employer
the right to appeal the assessment of a penalty in the manner provided
in RCW 50.32.030.
(7) The commissioner shall engage in prevention, detection, and
collection activities related to evasion of the successorship
provisions of RCW 50.29.062 and this section, and establish procedures
to enforce this section.
NEW SECTION. Sec. 4 If any part of this act is found to be in
conflict with federal requirements that are a prescribed condition to
the allocation of federal funds to the state or the eligibility of
employers in this state for federal unemployment tax credits, the
conflicting part of this act is inoperative solely to the extent of the
conflict, and the finding or determination does not affect the
operation of the remainder of this act. Rules adopted under this act
must meet federal requirements that are a necessary condition to the
receipt of federal funds by the state or the granting of federal
unemployment tax credits to employers in this state.
NEW SECTION. Sec. 5 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 6 Section 1 of this act is necessary for the
immediate preservation of the public peace, health, or safety, or
support of the state government and its existing public institutions,
and takes effect immediately.