BP BHEAD INT S [atlas:bill]

AN ACT Relating to financing unemployment insurance; amending RCW 50.29.020 and 50.29.025; creating a new section; repealing RCW 50.20.015; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the unemployment insurance experience rating system has produced inequities in the way that unemployment insurance is financed. The legislature further finds that changes in the system are needed to reduce socialized cost and to distribute more equitably among employers the tax burden of unemployment insurance.

Sec. 2. RCW 50.29.020 and 1995 c 57 s 3 are each amended to read as follows:

(1) An experience rating account shall be established and maintained for each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, based on existing records of the employment security department. Benefits paid to any eligible individuals shall be charged to the experience rating accounts of each of such individual's employers during the individual's base year in the same ratio that the wages paid by each employer to the individual during the base year bear to the wages paid by all employers to that individual during that base year, except as otherwise provided in this section.

(2) The legislature finds that certain benefit payments, in whole or in part, should not be charged to the experience rating accounts of employers except those employers described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, as follows:

(a) Benefits paid to any individuals later determined to be ineligible shall not be charged to the experience rating account of any contribution paying employer.

(b) Benefits paid to an individual filing under the provisions of chapter 50.06 RCW shall not be charged to the experience rating account of any contribution paying employer only if:

(i) The individual files under RCW 50.06.020(1) after receiving crime victims' compensation for a disability resulting from a nonwork-related occurrence; or

(ii) The individual files under RCW 50.06.020(2).

(c) Benefits paid which represent the state's share of benefits payable under chapter 50.22 RCW shall not be charged to the experience rating account of any contribution paying employer.

(d) In the case of individuals who requalify for benefits under RCW 50.20.050 or 50.20.060, benefits based on wage credits earned prior to the disqualifying separation shall not be charged to the experience rating account of the contribution paying employer from whom that separation took place.

(((e) In the case of individuals identified under RCW 50.20.015, benefits paid with respect to a calendar quarter, which exceed the total amount of wages earned in the state of Washington in the higher of two corresponding calendar quarters included within the individual's determination period, as defined in RCW 50.20.015, shall not be charged to the experience rating account of any contribution paying employer.))

(3)(a) Beginning July 1, 1985, a contribution-paying base year employer, not otherwise eligible for relief of charges for benefits under this section, may receive such relief if the benefit charges result from payment to an individual who:

(i) Last left the employ of such employer voluntarily for reasons not attributable to the employer;

(ii) Was discharged for misconduct connected with his or her work not a result of inability to meet the minimum job requirements;

(iii) Is unemployed as a result of closure or severe curtailment of operation at the employer's plant, building, work site, or other facility. This closure must be for reasons directly attributable to a catastrophic occurrence such as fire, flood, or other natural disaster; or

(iv) Continues to be employed on a regularly scheduled permanent part-time basis by a base year employer and who at some time during the base year was concurrently employed and subsequently separated from at least one other base year employer. Benefit charge relief ceases when the employment relationship between the employer requesting relief and the claimant is terminated. This subsection does not apply to shared work employers under chapter 50.60 RCW.

(b) The employer requesting relief of charges under this subsection must request relief in writing within thirty days following mailing to the last known address of the notification of the valid initial determination of such claim, stating the date and reason for the separation or the circumstances of continued employment. The commissioner, upon investigation of the request, shall determine whether relief should be granted.

Sec. 3. RCW 50.29.025 and 1995 c 4 s 2 are each amended to read as follows:

The contribution rate for each employer shall be determined under this section.

(1) A fund balance ratio shall be determined by dividing the balance in the unemployment compensation fund as of the June 30th immediately preceding the rate year by the total remuneration paid by all employers subject to contributions during the second calendar year preceding the rate year and reported to the department by the following March 31st. The division shall be carried to the fourth decimal place with the remaining fraction, if any, disregarded. The fund balance ratio shall be expressed as a percentage.

(2) The interval of the fund balance ratio, expressed as a percentage, shall determine which tax schedule in subsection (5) of this section shall be in effect for assigning tax rates for the rate year. The intervals for determining the effective tax schedule shall be:

Interval of the

Fund Balance Ratio Effective

Expressed as a Percentage Tax Schedule

2.90 and above AA

2.50 to 2.89 A

2.10 to 2.49 B

1.70 to 2.09 C

1.30 to 1.69 D

1.00 to 1.29 E

Less than 1.00 F

(3) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios. The array shall show for each qualified employer: (a) Identification number; (b) benefit ratio; (c) taxable payrolls for the four calendar quarters immediately preceding the computation date and reported to the department by the cut-off date; (d) a cumulative total of taxable payrolls consisting of the employer's taxable payroll plus the taxable payrolls of all other employers preceding him or her in the array; and (e) the percentage equivalent of the cumulative total of taxable payrolls.

(4) Each employer in the array shall be assigned to one of twenty rate classes according to the percentage intervals of cumulative taxable payrolls set forth in subsection (5) of this section: PROVIDED, That if an employer's taxable payroll falls within two or more rate classes, the employer and any other employer with the same benefit ratio shall be assigned to the lowest rate class which includes any portion of the employer's taxable payroll.

(5)(a) Subject to subsection (b) of this section, the contribution rate for each employer in the array shall be the rate specified in the following tables for the rate class to which he or she has been assigned, as determined under subsection (4) of this section, within the tax schedule which is to be in effect during the rate year:

Percent of

Cumulative Schedules of Contributions Rates

Taxable Payrolls for Effective Tax Schedule

((~~Rate~~

~~From To Class AA A B C D E F~~

~~0.00 5.00 1 0.48 0.48 0.58 0.98 1.48 1.88 2.48~~

~~5.01 10.00 2 0.48 0.48 0.78 1.18 1.68 2.08 2.68~~

~~10.01 15.00 3 0.58 0.58 0.98 1.38 1.78 2.28 2.88~~

~~15.01 20.00 4 0.58 0.78 1.18 1.58 1.98 2.48 3.08~~

~~20.01 25.00 5 0.78 0.98 1.38 1.78 2.18 2.68 3.18~~

~~25.01 30.00 6 0.98 1.18 1.58 1.98 2.38 2.78 3.28~~

~~30.01 35.00 7 1.08 1.38 1.78 2.18 2.58 2.98 3.38~~

~~35.01 40.00 8 1.28 1.58 1.98 2.38 2.78 3.18 3.58~~

~~40.01 45.00 9 1.48 1.78 2.18 2.58 2.98 3.38 3.78~~

~~45.01 50.00 10 1.68 1.98 2.38 2.78 3.18 3.58 3.98~~

~~50.01 55.00 11 1.98 2.28 2.58 2.98 3.38 3.78 4.08~~

~~55.01 60.00 12 2.18 2.48 2.78 3.18 3.58 3.98 4.28~~

~~60.01 65.00 13 2.38 2.68 2.98 3.38 3.78 4.18 4.48~~

~~65.01 70.00 14 2.58 2.88 3.18 3.58 3.98 4.38 4.68~~

~~70.01 75.00 15 2.88 3.08 3.38 3.78 4.18 4.58 4.78~~

~~75.01 80.00 16 3.08 3.28 3.58 3.98 4.38 4.68 4.88~~

~~80.01 85.00 17 3.28 3.48 3.78 4.18 4.58 4.88 4.98~~

~~85.01 90.00 18 3.68 3.88 4.18 4.58 4.88 4.98 5.18~~

~~90.01 95.00 19 4.08 4.28 4.58 4.98 5.08 5.18 5.38~~

~~95.01 100.00 20 5.40 5.40 5.40 5.40 5.40 5.40 5.40~~))

Rate

From To Class AA A B C D E F

0.00 5.00 1 0.48 0.48 0.58 0.82 1.32 1.72 2.31

5.01 10.00 2 0.48 0.48 0.78 1.02 1.52 1.92 2.51

10.01 15.00 3 0.58 0.58 0.89 1.22 1.62 2.12 2.71

15.01 20.00 4 0.58 0.68 0.98 1.42 1.82 2.32 2.91

20.01 25.00 5 0.73 0.78 1.00 1.52 1.92 2.42 2.91

25.01 30.00 6 0.86 0.90 1.12 1.72 2.12 2.52 3.01

30.01 35.00 7 0.94 1.00 1.18 1.92 2.32 2.72 3.11

35.01 40.00 8 1.09 1.18 1.25 2.12 2.52 2.92 3.31

40.01 45.00 9 1.25 1.28 1.41 2.32 2.72 3.12 3.51

45.01 50.00 10 1.45 1.48 1.61 2.52 2.92 3.32 3.71

50.01 55.00 11 1.69 1.78 1.85 2.72 3.12 3.52 3.81

55.01 60.00 12 1.97 2.08 2.13 2.92 3.32 3.72 4.01

60.01 65.00 13 2.24 2.28 2.40 3.12 3.52 3.92 4.21

65.01 70.00 14 2.44 2.68 2.77 3.32 3.72 4.12 4.41

70.01 75.00 15 2.74 2.98 3.06 3.52 3.92 4.32 4.51

75.01 80.00 16 3.04 3.18 3.55 3.95 4.38 4.68 4.88

80.01 85.00 17 3.25 3.48 3.75 4.18 4.58 4.88 4.98

85.01 90.00 18 3.68 3.90 4.18 4.58 4.88 4.98 5.18

90.01 95.00 19 5.02 5.22 5.38 5.48 5.58 5.68 5.78

95.01 100.00 20 6.25 7.80 8.25 8.35 8.45 8.55 8.65

(b) The maximum contribution rate for employers whose standard industrial code is within major group one of the Standard Industrial Classification Manual, or the equivalent code in a successor classification system as determined by the commissioner, may not exceed five and four-tenths percent.

(6) The contribution rate for each employer not qualified to be in the array shall be as follows:

(a) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned the contribution rate of five and six-tenths percent, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year. If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to five and six-tenths percent for the current rate year;

(b) The contribution rate for employers exempt as of December 31, 1989, who are newly covered under the section 78, chapter 380, Laws of 1989 amendment to RCW 50.04.150 and not yet qualified to be in the array shall be 2.5 percent for employers whose standard industrial code is "013", "016", "017", "018", "019", "021", or "081"; and

(c) For all other employers not qualified to be in the array, the contribution rate shall be a rate equal to the average industry rate as determined by the commissioner; however, the rate may not be less than one percent. Assignment of employers by the commissioner to industrial classification, for purposes of this subsection, shall be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the Standard Industrial Classification code.

NEW SECTION. Sec. 4. RCW 50.20.015 and 1986 c 106 s 1, 1985 c 285 s 3, & 1984 c 205 s 9 are each repealed.

NEW SECTION. Sec. 5. This act takes effect January 1, 2000, and applies to rate years beginning on and after January 1, 2000.