Preproposal statement of inquiry was filed as WSR 99-19-067.
Title of Rule: Owners of entities are not covered for unemployment insurance purposes.
Purpose: To create a new rule by converting existing policy as a result of a comprehensive review of all UI tax administration rules, policies, and procedures in accordance with Governor Locke's Executive Order 97-02 and numbered as WAC 192-300-190.
Statutory Authority for Adoption: RCW 50.01.010 and chapters 50.04, 50.24 RCW.
Statute Being Implemented: RCW 50.04.090 and 50.04.100.
Summary: This is a new rule created from existing UI tax administration policy following Governor Locke's guidelines to streamline all rules for the general public and make rules as clear and concise as possible. This new rule assists owners of businesses and/or their representatives in describing the requirements of the department for the exclusion of owners from unemployment insurance coverage. The Department of Labor and Industries has similar regulations in this area.
Reasons Supporting Proposal: The proposed regulations will clarify these situations for employers.
Name of Agency Personnel Responsible for Drafting: George Mante, 212 Maple Park, Olympia, WA 98507, (360) 902-9642; Implementation and Enforcement: Dale Ziegler, 212 Maple Park, Olympia, WA 98507, (360) 902-9303.
Name of Proponent: Employment Security Department, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: This rule is being revised in accordance with Governor Locke's Executive Order 97-02 which requires a complete review of agency rules, policies and procedures. This particular rule sets forth the conditions where the department can deny the owner of a business coverage for unemployment insurance purposes. The purpose is to convert an existing policy into a rule per the Governor's Executive Order 97-02. The rule also clearly shows that members of a limited liability company, partners of a limited liability partnership et. al. are not covered for unemployment insurance purposes. In addition it reiterates the fact that there is no employer-employee relationship with services provided in the business by the owners, so owners are not covered for unemployment insurance purposes.
Proposal Changes the Following Existing Rules: See explanation above concerning the addition of two new sections to the rule to preserve and protect the UI trust fund.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rules will not impact businesses in particular industries as defined in chapter 19.85 RCW, but will impact all industries equally. In addition chapter 19.85 RCW (RCW 19.85.025(3) applies below).
Section 201, chapter 403, Laws of 1995, applies to this rule adoption. The proposed rules will meet the intent of RCW 34.05.310. Public access will be through hearings and solicitation of comment from select stakeholders.
Hearing Location: Employment Security Department, Office of Staff Development, Room 1, ESD Annex, 106 Maple Park, Olympia, WA 98504, on December 28, 1999, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact George Mante by December 23, 1999, (360) 902-9642.
Submit Written Comments to: George Mante, Tax Reform Coordinator, UI Tax Administration, P.O. Box 9046, Olympia, WA 98507-9046, fax (360) 902-9556, by December 23, 1999.
Date of Intended Adoption: December 24 , 1999.
November 15, 1999
The owners of a business as identified in RCW 50.04.090 include business entities such as limited liability companies, limited liability partnerships, etc. There is no employer-employee relationship in the services provided to the business by the owners, as defined in RCW 50.04.100. Therefore owners are not covered for unemployment insurance purposes.