SENATE 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

Senate Committee on Commerce & Labor

Senate Hearing Date(s):April 1, 1987; April 3, 1987

Majority Report:     Do pass.

     Signed by Senators Warnke, Chairman; Smitherman, Vice Chairman; Anderson, Cantu, Lee, Sellar, Vognild, West, Williams, Wojahn.

Senate Staff:Mark McDermott (786-7429)

                April 3, 1987

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR, APRIL 3, 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 $25 or less than one-half of 1 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The inoperative section is repealed that provides for accelerated relief under the noncharging provisions for employers with employees marginally attached to the labor force.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 $100 for the purposes of determining an employer's eligibility for experience rating.

Fiscal Note:    none requested

Senate Committee - Testified:   Graeme Sakrisen, Employment Security