FINAL BILL REPORT

SHB 2426

                                  C 245 L 90

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Vekich, Walker, Chandler and Winsley; by request of Employment Security Department)

Revising provisions for employer contributions for unemployment compensation.

House Committe on Commerce & Labor

Senate Committee on Economic Development & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

Unemployment Insurance Eligibility and Coverage.

Under federal law, state unemployment insurance laws must require an unemployed worker to requalify if the worker applies more than once for benefits based on the same period of employment.  To requalify in Washington, a claimant who files a subsequent application for unemployment benefits using wage credits that were earned before the earlier claim was filed must have earned at least six times the weekly benefit amount since the beginning of the waiting period in the previous benefit year.  If the claimant had returned to work before receiving the waiting period credit in the earlier claim, the claimant will not be able to qualify for benefits in the subsequent claim.

Aliens, including foreign students, employed in the United States are covered by unemployment insurance

Unemployment Insurance Contributions.

Employers who are not current in their unemployment tax payments are not eligible for experience rating.  Agricultural employers newly covered for unemployment insurance are not eligible for experience rating and must pay the industry average unless a special tax rate has been assigned.

Nonprofit organizations may elect to self-insure their unemployment insurance program.  Under the election, the employer must pay the Employment Security Department for the full amount of benefits paid to claimants for weeks of unemployment that begin during the period of the election.

Each quarter, the department notifies every employer of the amount of benefits received by claimants and charged to the employer's experience rating account.  Statutory notice is also required annually.

Redeterminations and Collections.

If, after review by the commissioner of the Employment Security Department, an employer disagrees with the benefit charges that are made to the employer's experience rating account, the employer may appeal the commission's decision within 10 days after the date on which it was issued.

If a party disagrees with a determination of the commissioner concerning the allowance, denial, or amount of the claimant's unemployment insurance benefits, the party may request a redetermination within prescribed time periods.  However, a redetermination may be made at any time to conform the award to a final court decision.

If a claimant receives a back pay award, any benefits that the claimant received for the period covered by the back pay award will be considered overpayments and will be subject to collection action. The department does not have authority to impose interest penalties if the person making repayments on an overpayment fails to make the required payments.

In collecting on overdue tax payments, the department must serve notices to withhold and deliver by personal service through the county sheriff.

Voluntary Combined Reporting for Agricultural Employers.

In 1989, the Legislature directed that the Employment Security Department, the Department of Labor and Industries, the Department of Licensing, and the Department of Revenue develop a plan for implementing voluntary combined reporting for agricultural employers and that the plan have an implementation date of January 1, 1991.  In the plan submitted to the Legislature, the departments recommended that the implementation date be changed to January 1, 1992.

SUMMARY:

Unemployment Insurance Eligibility and Coverage.

The requirement is amended for establishing an unemployment insurance benefit year when the claimant's base year includes wages earned before the establishment of a prior benefit year.  The period in which the claimant is required to have earnings of not less than six times the weekly benefit amount is changed from the period beginning with the waiting period in the prior benefit year to the period following the initial job separation in the prior benefit year.

Unemployment insurance does not cover services performed by nonresident aliens who are temporarily in the United States under specified student visas.

Unemployment Insurance Contributions.

An employer who has an approved agency-deferred payment contract for the payment of back tax liability may qualify for experience rating unless the employer fails to make payments under the contract or fails to submit tax reports.

Newly covered agricultural employers, whose standard industrial code is field crops other than cash grains or general farming, are given an initial unemployment insurance tax rate of 2.5 percent of qualified payroll.

The basis for determining the payments that nonprofit organizations that elect to self-insure their unemployment insurance program must make is changed from the amount of benefits paid to claimants in the weeks of claimant unemployment that began during the period of election to the employee wages that were paid or payable during the period of election.

The requirement is deleted for annual notice to an employer of the total amount of benefits charged to the employer's experience rating account in the previous year.  Annual notice of the employer's tax rate must include information about the factors used in calculating the rate.

Redeterminations and Collections.

The period of time in which an employer may appeal a decision regarding the benefit charges made to the employer's experience rating account is changed from 10 days to 30 days.  The appeal is limited to the charges made during the previous year.

The commissioner of the Employment Security Department is authorized to make a redetermination on an unemployment insurance claim at any time if a back pay award or settlement affects the allowance of benefits or if the case involves fraud, misrepresentation, or willful nondisclosure.

When a claimant receives a back pay award, the back pay constitutes wages for the period for which the pay was awarded.  The claimant is not liable for any unemployment benefits paid for the same period if the back pay award was reduced by the amount of the benefits. Within 30 days of the award, the employer must report to the department the amount by which the back pay award was reduced and must pay the department an amount equal to the reduction.

A claimant who fails to repay an overpayment assessment and does not arrange repayment terms will be assessed an interest penalty of 1 percent per month on the outstanding balance.  If the overpayment resulted from misrepresentation, the interest penalty will be assessed immediately.  For other overpayments, interest will begin accruing after two or more payments have been missed.  Money collected from the interest penalty must be used to fund the department's detection and recovery of overpayments and collection activities.

Service of notices to withhold and deliver the property of an employer who has a tax liability may be served by certified mail, return receipt requested.

Voluntary Combined Reporting for Agricultural Employers.

The implementation date for voluntary combined reporting for agricultural employers who report to the Employment Security Department, the Department of Labor and Industries, the Department of Licensing, and the Department of Revenue is changed to January 1, 1992.

VOTES ON FINAL PASSAGE:

      House 89   0

      Senate    46     0 (Senate amended)

      House             (House refused to concur)

Free Conference Committee

      Senate    47     0

      House 97   0

EFFECTIVE:June 7, 1990

            March 28, 1990 (Section 1)

            July 1, 1990 (Sections 2, 3 and 6 - 9)