SENATE BILL REPORT

SHB 2426

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

Senate Hearing Date(s):February 21, 1990; February 22, 1990

Majority Report:  Do pass as amended.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Matson, Saling, Smitherman, Warnke, Williams.

Senate Staff:Forrest Bathurst (786-7429)

                  February 22, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 22, 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.

The department currently notifies employers of benefit charges quarterly.  A remnant of an earlier provision also requires an annual notification, in addition to that provided annually in the tax rate notice.  If 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 and trainee visas.

Employers who have an approved agency-deferred payment contract for the payment of back tax liability may qualify for experience rating as long as the employer does not fail in making payments under the contract or in submitting tax reports.  If the employer does fail, he/she will be assigned a tax rate of 5.4 percent (the highest category).

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.

Employers will no longer be notified by a duplicative annual report of the total amount of benefits charged to their accounts during the 12 months preceding the computation date.

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.

Employers will be notified in a reasonable period of time of their rate of contribution for the succeeding rate year and factors used in its calculation.

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.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

SUMMARY OF PROPOSED SENATE AMENDMENT:

SIC codes 013 (nongrain field crops) and 019 (general farm) are added to a 2.5 percent rate when not yet qualified to be in the contribution rate array.

Senate Committee - Testified: Graeme Sackrison, ESD (pro)