HOUSE BILL REPORT

SHB 2426

As Amended by the Senate

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

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (10)

      Signed by Representatives Vekich, Cole, Vice Chair; Smith, Ranking Republican Member, Forner, Jones, R. King, Leonard, Prentice, Walker and Wolfe.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE FEBRUARY 12, 1990

BACKGROUND:

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

Employers who are not current in their unemployment tax payments are not eligible for experience rating.  In collecting on overdue tax payments, the Employment Security Department must serve notices to withhold and deliver by personal service through the county sheriff.

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 must appeal the decision within 10 days.

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

SUMMARY:

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

Employers who have 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.

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.

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.

Nonprofit organizations that elect to self-insure their unemployment insurance program must make payments equal to the amount of benefits paid to claimants based on the employee wages that were paid or payable during the period of election, rather than on the weeks of unemployment that began during the period of election.

EFFECT OF SENATE AMENDMENTS:  The Senate amendment adds a provision that changes the contribution rate for two groups of agricultural employers who are newly covered for unemployment insurance and who are not qualified for experience rating.  For these employers, whose standard industrial code classification is field crops (other than cash grains) or general farming (primarily crops, but not a majority of crops in any other classification), the initial unemployment insurance tax rate is 2.5 percent of qualified payroll.

Fiscal Note:      Requested January 20, 1990.

House Committee ‑ Testified For:    Graeme Sackrison, Employment Security Department.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    The bill makes various minor changes in unemployment insurance law.  The foreign students who are exempt under the bill are also not covered by federal unemployment tax law.  Allowing previously defaulting employers to qualify for experience rating may save some otherwise vulnerable businesses.  Other changes in the bill are made for clarity or equity considerations.  Neither business nor labor representatives have expressed opposition to these changes.

House Committee - Testimony Against:      None.

VOTE ON FINAL PASSAGE:

      Yeas 89; Absent 6; Excused 3

Absent:     Representatives Brekke, Gallagher, Haugen, Locke, Sayan, Sommers H.

Excused:    Representatives Prince, Rector, Vekich.