Passed by the House April 6, 2012 Yeas 94   FRANK CHOPP ________________________________________ Speaker of the House of Representatives Passed by the Senate April 10, 2012 Yeas 40   BRAD OWEN ________________________________________ President of the Senate | I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 2491 as passed by the House of Representatives and the Senate on the dates hereon set forth. BARBARA BAKER ________________________________________ Chief Clerk | |
Approved May 2, 2012, 1:41 p.m. CHRISTINE GREGOIRE ________________________________________ Governor of the State of Washington | May 2, 2012 Secretary of State State of Washington |
State of Washington | 62nd Legislature | 2012 Regular Session |
READ FIRST TIME 01/31/12.
AN ACT Relating to specifying when predecessor-successor relationships do not exist for purposes of unemployment experience rating; amending RCW 50.29.062; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 50.29.062 and 2010 c 25 s 2 are each amended to read
as follows:
((Except as provided in RCW 50.29.063)) (1) If the department finds
that a significant purpose of the transfer of the business is to obtain
a reduced array calculation factor rate, contribution rates shall be
computed and penalties and other sanctions shall apply as specified in
RCW 50.29.063.
(2) If subsection (1) of this section and RCW 50.29.063 do not
apply and if the department finds that an employer is a successor, or
partial successor, to a predecessor business, predecessor and successor
employer contribution rates shall be computed in the following manner:
(((1)))(a) 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))) (i) The successor's contribution rate shall remain
unchanged for the remainder of the rate year in which the transfer
occurs((; and)).
(((b))) (ii) 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))) (A) The successor's experience with payrolls and benefits;
and
(((ii))) (B) 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))) (b) If the successor is not an employer at the time of the
transfer, the following applies:
(((a))) (i) For transfers before January 1, 2005:
(((i))) (A) Except as provided in (((ii))) (b)(i)(B) of this
subsection (2)(((a))), the successor shall pay contributions at the
lowest rate determined under either of the following:
(((A))) (I) 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))) (II) 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))) (B) 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))) (ii) For transfers on or after January 1, 2005:
(((i))) (A) Except as provided in (((ii) and (iii))) (b)(ii)(B) and
(C) of this subsection (2)(((b))), the successor shall pay
contributions:
(((A))) (I) 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))) (II) 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 by including the transferred experience.
If not qualified under RCW 50.29.010, the contribution rate shall equal
the sum of the rates determined by the commissioner under RCW 50.29.025
(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))) (B) 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))) (C) 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 (1)(d)(ii) or (2)(d)
and 50.29.041, if applicable.
(((3))) (c) With respect to predecessor employers:
(((a))) (i) 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))) (ii) 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.
(3) A predecessor-successor relationship does not exist for
purposes of subsection (2) of this section when a significant purpose
of the transfer of a business or its operating assets is for the
employer to move or expand an existing business, or for an employer to
establish a substantially similar business under common ownership,
management, and control. However, if an employer transfers its
business to another employer, and both employers are at the time of
transfer under substantially common ownership, management, or control,
then the unemployment experience attributable to the transferred
business shall also be transferred to, and combined with the
unemployment experience attributable to, the employer to whom such
business is so transferred as specified in subsection (2)(a) of this
section.
(4) For purposes of this section, "transfer of a business" means
the same as RCW 50.29.063(4)(c).
NEW SECTION. Sec. 2 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. 3 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.