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S1250.......................................by COMMERCE AND HUMAN RESOURCES
EMPLOYMENT SECURITY LAW - Amends existing law relating to the Employment
Security Law to revise definitions; to remove certain provisions providing
for when the transfer of the predecessor's experience rating account is
mandatory; to remove a provision providing when transfers must be based on
estimates of the allocable payrolls; to remove a provision providing for
the transfer of the experience rating when a covered employer makes certain
transfers to another employer; to provide for the transfer of the
experience rating when a covered employer makes certain transfers to
another employer; to provide an alternative method for recalculating the
experience rating for both employers; to provide a method for estimating
the allocable payroll under specified conditions; to provide for factors to
be considered by the Department of Labor to determine whether a transfer of
all or a portion of a trade or business has occurred; and to provide for
the assessment of certain civil penalties by the Department of Labor's
direction if a finding is made that an employer has colluded with an
employee or former employee to file a false or fraudulent claim for
benefits.
01/11 Senate intro - 1st rdg - to printing
01/14 Rpt prt - to Com/HuRes
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/06 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett(Thorson), Werk
NAYS -- None
Absent and excused -- None
Floor Sponsors - Coiner & Stegner
Title apvd - to House
02/07 House intro - 1st rdg - to Com/HuRes
02/18 Rpt out - rec d/p - to 2nd rdg
02/19 2nd rdg - to 3rd rdg
02/20 3rd rdg - PASSED - 64-0-6
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Block,
Bock, Boe, Bolz, Bowers, Bradford, Chadderdon, Chavez, Chew, Clark,
Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
Henbest(Burgoyne), Henderson, Jaquet, Killen, King, Kren, Labrador,
Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
Mortimer, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ringo,
Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
Shepherd(08), Shirley, Shively, Smith(24), Smith(30)(Stanek),
Stevenson, Thayn, Thomas, Vander Woude, Wills, Wood(27), Wood(35),
Mr. Speaker
NAYS -- None
Absent and excused -- Black, Brackett, Moyle, Patrick, Snodgrass,
Trail
Floor Sponsor - Schaefer
Title apvd - to Senate
02/21 To enrol
02/22 Rpt enrol - Pres signed
02/25 Sp signed
02/26 To Governor
02/27 Governor signed
Session Law Chapter 44
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1250 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO THE EMPLOYMENT SECURITY LAW; AMENDING SECTION 72-1315, IDAHO CODE, 3 TO REVISE THE DEFINITION OF "COVERED EMPLOYER" AND TO MAKE TECHNICAL COR- 4 RECTIONS; AMENDING SECTION 72-1316, IDAHO CODE, TO REVISE A DEFINITION AND 5 TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 72-1351, IDAHO CODE, TO 6 MAKE TECHNICAL CORRECTIONS, TO REMOVE CERTAIN PROVISIONS PROVIDING FOR 7 WHEN THE TRANSFER OF THE PREDECESSOR'S EXPERIENCE RATING ACCOUNT IS MANDA- 8 TORY AND TO REMOVE A PROVISION PROVIDING WHEN TRANSFERS MUST BE BASED ON 9 ESTIMATES OF THE ALLOCABLE PAYROLLS; AMENDING SECTION 72-1351A, IDAHO 10 CODE, TO MAKE TECHNICAL CORRECTIONS, TO REMOVE A PROVISION PROVIDING FOR 11 THE TRANSFER OF THE EXPERIENCE RATING WHEN A COVERED EMPLOYER MAKES CER- 12 TAIN TRANSFERS TO ANOTHER COVERED EMPLOYER, TO PROVIDE FOR THE TRANSFER OF 13 THE EXPERIENCE RATING WHEN A COVERED EMPLOYER MAKES CERTAIN TRANSFERS TO 14 ANOTHER EMPLOYER, WHETHER OR NOT THE EMPLOYER IS A COVERED EMPLOYER PURSU- 15 ANT TO IDAHO CODE, TO PROVIDE AN ALTERNATIVE METHOD FOR RECALCULATING THE 16 EXPERIENCE RATING OF BOTH EMPLOYERS, TO PROVIDE A METHOD FOR ESTIMATING 17 THE ALLOCABLE PAYROLL UNDER SPECIFIED CONDITIONS AND TO PROVIDE FACTORS TO 18 BE CONSIDERED BY THE DEPARTMENT OF LABOR TO DETERMINE WHETHER A TRANSFER 19 OF ALL OR A PORTION OF A TRADE OR BUSINESS HAS OCCURRED; AMENDING SECTION 20 72-1372, IDAHO CODE, TO PROVIDE FOR THE ASSESSMENT OF CERTAIN CIVIL PENAL- 21 TIES BY THE DEPARTMENT'S DIRECTOR IF A FINDING IS MADE THAT AN EMPLOYER 22 HAS COLLUDED WITH AN EMPLOYEE OR FORMER EMPLOYEE TO FILE A FALSE OR FRAUD- 23 ULENT CLAIM FOR BENEFITS. 24 Be It Enacted by the Legislature of the State of Idaho: 25 SECTION 1. That Section 72-1315, Idaho Code, be, and the same is hereby 26 amended to read as follows: 27 72-1315. COVERED EMPLOYER. "Covered employer" means: 28 (1) Any person who, in any calendar quarter in either the current or pre- 29 ceding calendar year paid for services in covered employment wages of one 30 thousand five hundred dollars ($1,500) or more, or for some portion of a day 31 in each of twenty (20) different calendar weeks, whether or not consecutive, 32 in either the current or preceding calendar year employed at least one (1) 33 individual,(irrespective of whether the same individual was in employment in 34 each such day). For purposes of this subsection there shall not be taken into 35 account any wages paid to, or in employment of, an employee performing domes- 36 tic services referred to in subsection (8) of this section. 37 (2) All individuals performing services within this state for an employer 38 who maintains two (2) or more separate establishments within this state shall 39 be deemed to be performing services for a single employer. 40 (3) Each individual engaged to perform or assist in performing the work 41 of any person in the service of an employer shall be deemed to be employed by 42 such employer for all the purposes of this chapter, whether such individual 43 was engaged or paid directly by such employer or by such person, provided the 2 1 employer had actual or constructive knowledge of the work. 2 (4) Any employer,(whether or not an employer at the time of 3 acquisition), who acquires the organization, trade, or business or substan- 4 tially all the assets thereof, of another who at the time of such acquisition 5 was a covered employer. 6 (5) In the case of agricultural labor, any person who: 7 (a) During any calendar quarter in the calendar year or the preceding 8 calendar year paid wages in cash of twenty thousand dollars ($20,000) or 9 more for agricultural labor; or 10 (b) On each of some twenty (20) days during the calendar year or during 11 the preceding calendar year, each day being in a different calendar week, 12 employed at least ten (10) individuals in employment in agricultural labor 13 for some portion of the day. 14 (c) Such labor is not agricultural labor when it is performed by an indi- 15 vidual who is an alien admitted to the United States to perform agricul- 16 tural labor pursuant to sections 214(c) and 101(a)(15)(H) of the immigra- 17 tion and nationality act, unless the individual is required to be covered 18 by the federal unemployment tax act. 19 (6) Acrew leaderlicensed farm labor contractor, as provided in chapter 20 16, title 44, Idaho Code, who furnishesmembers of a crewany individual to 21 perform agricultural labor for another person.if:22(a) The crew leader holds a valid certificate of registration under the23migrant and seasonal agricultural worker protection act; or24(b) Substantially all the members of such crew operate or maintain trac-25tors, mechanized harvesting or crop-dusting equipment, or any other mech-26anized equipment, which is provided by the crew leader; and27(c) The crew leader is not an employee of such other person.28 (7)In the case ofAn unlicensed, nonexempt farm labor contractor, as 29 provided in chapter 16, title 44, Idaho Code, who furnishes any individualwho30is furnished by a crew leaderto perform agricultural labor for another 31 person,not treated as a covered employer under subsection (5) of this sec- 32 tion. If an unlicensed, nonexempt farm labor contractor furnishes any individ- 33 ual to perform agricultural labor for another person who is treated as a cov- 34 ered employer under subsection (5) of this section, both such other person and 35notthecrew leaderunlicensed, nonexempt farm labor contractor shall be 36treated as the employer of the individual if the crew leader is not, under the37provisions of subsection (6) of this section, considered to be the employer38and such other person shall be treated as having paid cash remuneration to the39individual in an amount equal to the amount of cash remuneration paid to the40individual by the crew leader (either on his behalf or on behalf of such other41person) for the agricultural labor performed for such other personjointly and 42 severally liable for any moneys due under the provisions of this chapter. 43 (8) In the case of domestic service in a private home, local college 44 club, or local chapter of a college fraternity or sorority, any person who 45 during any calendar quarter in the calendar year or the preceding calendar 46 year paid wages in cash of one thousand dollars ($1,000) or more for such ser- 47 vice. 48 A person treated as a covered employer under this subsection (8) shall not 49 be treated as a covered employer with respect to wages paid for any service 50 other than domestic service referred to in this subsection (8) unless such 51 person is treated as a covered employer under subsection (1) or (5) of this 52 section, with respect to such other service. 53 (9) Any governmental entity as defined in section 72-1322C, Idaho Code. 54 (10) A nonprofit organization as defined in section 72-1322D, Idaho Code. 55 (11) An employer who has elected coverage pursuant to the provisions of 3 1 subsection (3) of section 72-1352, Idaho Code. 2 SECTION 2. That Section 72-1316, Idaho Code, be, and the same is hereby 3 amended to read as follows: 4 72-1316. COVERED EMPLOYMENT. (1) "Covered employment" means an 5 individual's entire service performed by him for wages or under any contract 6 of hire, written or oral, express or implied, for a covered employer or cov- 7 ered employers. 8 (2) Notwithstanding any other provision of state law, services shall be 9 deemed to be in covered employment if a tax is required to be paid or was 10 required to be paid the previous year on such services under the federal unem- 11 ployment tax act or if the director determines that as a condition for full 12 tax credit against the tax imposed by the federal unemployment tax act such 13 services are required to be covered under this chapter. 14 (3) Services covered by an election pursuant to section 72-1352, Idaho 15 Code, and services covered by an election approved by the director pursuant to 16 section 72-1344, Idaho Code, shall be deemed to be covered employment during 17 the effective period of such election. 18 (4) Services performed by an individual for remuneration shall, for the 19 purposes of the employment security law, be covered employment unless it is 20 shown: 21 (a) That the worker has been and will continue to be free from control or 22 direction in the performance of his work, both under his contract of ser- 23 vice and in fact; and 24 (b) That the worker is engaged in an independently established trade, 25 occupation, profession, or business. 26 (5) "Covered employment" shall include an individual's entire service, 27 performed within or both within and without this state: 28 (a) If the service is localized in this state; or 29 (b) If the service is not localized in any state but some of the service 30 is performed in this state, and: 31 (i) The individual's base of operations or the place from which 32 such service is directed or controlled is in this state; or 33 (ii) The individual's base of operations or place from which such 34 service is directed or controlled is not in any state in which some 35 part of the service is performed, but the individual's residence is 36 in this state. 37 (c) Service shall be deemed to be localized within a state if: 38 (i) The service is performed entirely within such state; or 39 (ii) The service is performed both within and without such state, 40 but the service performed without such state is incidental, temporary 41 or transitory in nature or consists of isolated transactions, as com- 42 pared to the individual's service within the state. 43 (d) "Covered employment" shall include an individual's service, wherever 44 performed within the United States, or Canada, if: 45 (i) Such service is not covered under the unemployment compensation 46 law of any other state, the Virgin Islands, or Canada; and 47 (ii) The place from which the service is directed or controlled is 48 in this state. 49 (6) "Covered employment" shall include the services of an individual who 50 is a citizen of the United States, performed outside the United States, 51(except in Canada), in the employ of an American employer,(other than service 52 which is deemed "covered employment" under the provisions of subsection (5) of 53 this section or the parallel provisions of another state's law), if: 4 1 (a) The employer's principal place of business in the United States is 2 located in this state; or 3 (b) The employer has no place of business in the United States; but 4 (i) Is an individual who is a resident of this state; or 5 (ii) Is a corporation which is organized under the laws of this 6 state; or 7 (iii) Is a partnership or a trust and the number of the partners or 8 trustees who are residents of this state is greater than the number 9 who are residents of any other state; or 10 (c) None of the criteria of provision (a) or (b) of this subsection is 11 met but the employer has elected coverage in this state, or the employer 12 having failed to elect coverage in any state, the individual has filed a 13 claim for benefits based on such service, under the law of this state; 14 (d) An "American employer" for purposes of this subparagraph means a per- 15 son who is: 16 (i) An individual who is a resident of the United States; or 17 (ii) A partnership if two-thirds (2/3) or more of the partners are 18 residents of the United States; or 19 (iii) A trust if all of the trustees are residents of the United 20 States; or 21 (iv) A corporation organized under the laws of the United States or 22 of any state. 23 (e) For purposes of this subsection, "United States" means the states, 24 the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin 25 Islands. 26 SECTION 3. That Section 72-1351, Idaho Code, be, and the same is hereby 27 amended to read as follows: 28 72-1351. EXPERIENCE RATING AND VOLUNTARY TRANSFERS OF EXPERIENCE RATING 29 ACCOUNTS. (1) Subject to the other provisions of this chapter, each eligible 30 and deficit employer's,(except cost reimbursement employers), taxable wage 31 rate shall be determined in the manner set forth below for each calendar year: 32 (a) (i) Each eligible employer shall be given an "experience factor" 33 which shall be the ratio of excess of contributions over benefits 34 paid on the employer's account since December 31, 1939, to his aver- 35 age annual taxable payroll rounded to the next lower dollar amount 36 for the four (4) fiscal years immediately preceding the computation 37 date, except that when an employer first becomes eligible, his 38 "experience factor" will be computed on his average annual taxable 39 payroll for the two (2) fiscal years or more, but not to exceed four 40 (4) fiscal years, immediately preceding the computation date. The 41 computation of such "experience factor" shall be to six (6) decimal 42 places. 43 (ii) Each deficit employer shall be given a "deficit experience fac- 44 tor" which shall be the ratio of excess of benefits paid on the 45 employer's account over contributions since December 31, 1939, to his 46 average annual taxable payroll rounded to the next lower dollar 47 amount for one (1) or more fiscal years, but not to exceed four (4) 48 fiscal years, for which he had covered employment ending on the com- 49 putation date; provided, however, that any employer who on any compu- 50 tation date has a "deficit experience factor" for the period immedi- 51 ately preceding such computation date but who has filed all reports, 52 paid all contributions and penalties due on or before the cut-off 53 date, and has during the last four (4) fiscal years paid contribu- 5 1 tions at a rate of not less than the standard rate applicable for 2 each such year and in excess of benefits charged to his experience 3 rating account during such years, shall have any balance of benefits 4 charged to his account which on the computation date immediately pre- 5 ceding such four (4) fiscal years were in excess of contributions 6 paid, deleted from his account, and the excess benefits so deleted 7 shall not be considered in the computation of his taxable wage rate 8 for the rate years following such four (4) fiscal years. For the rate 9 year following such computation date, he shall be given the standard 10 rate for that year. 11 (iii) In the event an employer's coverage has been terminated because 12 he has ceased to do business or because he has not had covered 13 employment for a period of four (4) years, and if said employer 14 thereafter becomes a covered employer, he will be considered as 15 though he were a new employer, and he shall not be credited with his 16 previous experience under this chapter for the purpose of computing 17 any future "experience factor." 18 (b) Schedules shall be prepared listing all eligible employers in inverse 19 numerical order of their experience factors, and all deficit employers in 20 numerical order of their deficit experience factors. There shall be listed 21 on such schedules for each such employer in addition to the experience 22 factor: (i) the amount of his taxable payroll for the fiscal year ending 23 on the computation date, and (ii) a cumulative total consisting of the sum 24 of such employer's taxable payroll for the fiscal year ending on the com- 25 putation date and the corresponding taxable payrolls for all other employ- 26 ers preceding him on such schedules. 27 (c) The cumulative taxable payroll amounts listed on the schedules pro- 28 vided for in paragraph (b) of this subsection shall be segregated into 29 groups whose limits shall be those set out in the table provided in sec- 30 tion 72-1350(7), Idaho Code. Each of such groups shall be identified by 31 the rate class number listed in the table which represents the percentage 32 limits of each group. Each employer on the schedules shall be assigned a 33 taxable wage rate in accordance with section 72-1350, Idaho Code. 34 (d) (i) If the grouping of rate classes requires the inclusion of 35 exactly one-half (1/2) of an employer's taxable payroll, the employer 36 shall be assigned the lower of the two (2) rates designated for the 37 two (2) classes in which the halves of his taxable payroll are so 38 required. 39 (ii) If the group of rate classes requires the inclusion of a por- 40 tion other than exactly one-half (1/2) of an employer's taxable pay- 41 roll, the employer shall be assigned the rate designated for the 42 class in which the greater part of his taxable payroll is so 43 required. 44 (iii) If one (1) or more employers on the schedules have experience 45 factors identical to that of the last employer included in a particu- 46 lar rate class, all such employers shall be included in and assigned 47 the taxable wage rate specified for such class, notwithstanding the 48 provisions of paragraph (c) of this subsection. 49 (e) If the taxable payroll amount or the experience factor or both such 50 taxable payroll amount and experience factor of any eligible or deficit 51 employer listed on the schedules is changed, the employer shall be placed 52 in that position on the schedules which he would have occupied had his 53 taxable payroll amount and/or experience factor as changed been used in 54 determining his position in the first instance, but such change shall not 55 affect the position or rate classification of any other employer listed on 6 1 the schedules and shall not affect the rate determination for previous 2 years. 3 (2) For experience rating purposes, all previously accumulated benefit 4 charges to covered employers' accounts, except cost reimbursement employers, 5 shall not be changed except as providedbyin this chapter. Benefits paid 6 prior to June 30 shall, as of June 30 of each year preceding the calendar year 7 for which a covered employer's taxable wage rate is effective, be charged to 8 the account of the covered employer, except cost reimbursement employers, who 9 paid the largest individual amount of base period wages as shown on the deter- 10 mination used as the basis for the payment of such benefits, except that no 11 charge shall be made to the account of such covered employer with respect to 12 benefits paid under the following situations: 13 (a) If paid to a worker who terminated his services voluntarily without 14 good cause attributable to such covered employer, or who had been dis- 15 charged for misconduct in connection with such services; 16 (b) If paid in accordance with the provisions of section 72-1368(10), 17 Idaho Code, and the decision to pay benefits is subsequently reversed; 18 (c) For that portion of benefits paid to multistate claimants pursuant to 19 section 72-1344, Idaho Code, which exceeds the amount of benefits that 20 would have been charged had only Idaho wages been used in paying the 21 claim; 22 (d) If paid in accordance with the extended benefit program triggered by 23 either national or state indicators; 24 (e) If paid to a worker who continues to perform services for such cov- 25 ered employer without a reduction in his customary work schedule, and who 26 is eligible to receive benefits due to layoff or a reduction in earnings 27 from another employer. 28 (3) A covered employer whose experience rating account is chargeable, as 29 prescribed by this section, is an interested party as defined in section 30 72-1323, Idaho Code. A determination of chargeability shall become final 31 unless, within fourteen (14) days after notice as provided in section 32 72-1368(5), Idaho Code, an appeal is filed by an interested party with the 33 department in accordance with the department's rules. 34 (4) An experience rating record shall be maintained for each covered 35 employer. The record shall be credited with all contributions which the cov- 36 ered employer has paid for covered employment prior to the cut-off date, pur- 37 suant to the provisions of this and preceding acts, and which covered employ- 38 ment occurred prior to the computation date. The record shall also be charged 39 with the amount of benefits paid which are chargeable to the covered 40 employer's account as provided by the appropriate provisions of the employment 41 security law and regulations thereunder in effect at the time such benefits 42 were paid. Nothing in this section shall be construed to grant any covered 43 employer or individual in his service a priority with respect to any claim or 44 right because of amounts paid by such covered employer into the employment 45 security fund. 46 (5) (a) Whenever any individual or type of organization,(whether or not 47 a covered employer within the meaning of section 72-1315, Idaho Code), in 48 any manner succeeds to, or acquires all or substantially all, of the busi- 49 ness of an employer who at the time of acquisition was a covered employer, 50 and in respect to whom the director finds that the business of the prede- 51 cessor is continued solely by the successor, the separate experience rat- 52 ing account of the predecessor shall, upon the joint application of the 53 predecessor and the successor within the one hundred eighty (180) days 54 after such acquisition and approval by the director, be transferred to the 55 successor employer for the purpose of determining such successor's liabil- 7 1 ity and taxable wage rate and any successor who was not an employer on the 2 date of acquisition shall as of such date become a covered employer as 3 defined in this chapter. Such one hundred eighty (180) day period may be 4 extended at the discretion of the director.The transfer of the5predecessor's experience rating account as of the last computation date to6the successor shall be mandatory if the management or ownership or control7is substantially the same for the successor as for the predecessor and8there is a continuity of business activity by the successor.9 (b) Whenever any individual or type of organization, whether or not a 10 covered employer within the meaning of section 72-1315, Idaho Code, in 11 any manner succeeds to, or acquires, part of the business of an employer 12 who at the time of acquisition was a covered employer, and such portion of 13 the business is continued by the successor, so much of the separate expe- 14 rience rating account of the predecessor as is attributable to the portion 15 of the business transferred, as determined on a pro rata basis in the same 16 ratio that the wages of covered employees properly allocable to the trans- 17 ferred portion of the business bears to the payroll of the predecessor in 18 the last four (4) completed calendar quarters immediately preceding the 19 date of transfer, shall, upon the joint application of the predecessor and 20 the successor within one hundred eighty (180) days after such acquisition 21 and approval by the director, be transferred to the successor employer for 22 the purpose of determining such successor's liability and taxable wage 23 rate and any successor who was not an employer on the date of acquisition 24 shall as of such date become a covered employer as defined in this chap- 25 ter. Such one hundred eighty (180) day period may be extended at the dis- 26 cretion of the director.The transfer of the predecessor's experience rat-27ing account as of the last computation date to the successor shall be man-28datory if the management or ownership or control is substantially the same29for the successor as for the predecessor and there is a continuity of30business activity by the successor. Whenever such mandatory transfer31involves only a portion of the experience rating record, and the predeces-32sor or successor employers fail within ten (10) days after notice to sup-33ply the required payroll information, the transfer shall be based on esti-34mates of the allocable payrolls.35 (c) (i) If the successor was a covered employer prior to the date of 36 the acquisition of all or a part of the predecessor's business his 37 taxable wage rate, effective the first day of the calendar quarter 38 immediately following the date of acquisition, shall be a newly com- 39 puted rate based on the combined experience of the predecessor and 40 successor, the resulting rate remaining in effect the balance of the 41 rate year. 42 (ii) If the successor was not a covered employer prior to the date 43 of the acquisition of all or a part of the predecessor's business, 44 his rate shall be the rate applicable to the predecessor with respect 45 to the period immediately preceding the date of acquisition, but if 46 there were more than one (1) predecessor the successor's rate shall 47 be a newly computed rate based on the combined experience of the pre- 48 decessors, becoming effective immediately after the date of acquisi- 49 tion, and shall remain in effect the balance of the rate year. 50 (d) For purposes of this section, an employer's experience rating account 51 shall consist of the actual contribution, benefit and taxable payroll 52 experience of the employer and any amounts due from the employer under 53 this chapter. When a transferred experience rating account includes 54 amounts due from the employer under this chapter, both the predecessor 55 employer and the successor employer shall be jointly and severally liable 8 1 for those amounts. 2 SECTION 4. That Section 72-1351A, Idaho Code, be, and the same is hereby 3 amended to read as follows: 4 72-1351A. MANDATORY TRANSFERS OF EXPERIENCE RATING ACCOUNTS AND FEDERAL 5 CONFORMITY PROVISIONS REGARDING TRANSFERS OF EXPERIENCE AND ASSIGNMENT OF 6 RATES. Notwithstanding any other provision of this chapter, the following 7 shall apply regarding transfers of experience and assignment of rates: 8 (1) (a) If a covered employer transfers its trade or business, or a por- 9 tion thereof, to anothercoveredemployer, whether or not a covered 10 employer within the meaning of section 72-1315, Idaho Code, and, at the 11 time of the transfer, there is substantially common ownership, management 12 or control of the two (2) employers, then the experience rating account 13 attributable to the transferred trade or business shall be transferred to 14 the employer to whom such business is so transferred. The rates of both 15 employers shall be recalculated using the methods provided in section 16 72-1351(5)(b) and either (c)(i) or (c)(ii), Idaho Code. Whenever such man- 17 datory transfer involves only a portion of the experience rating record, 18 and the predecessor or successor employers fail within ten (10) days after 19 notice to supply the required payroll information, the transfer may be 20 based on estimates of the allocable payrolls. 21 (b) If, following a transfer of experience under paragraph (a) of this 22 subsection (1), the director determines that a substantial purpose of the 23 transfer of the trade or business was to obtain a reduced liability for 24 contributions, then the experience rating accounts of the employers 25 involved shall be combined into a single account and a single rate shall 26 be assigned to such account. 27 (2) Whenever a person who is not a covered employer under this chapter at 28 the time such person acquires the trade or business of a covered employer, the 29 experience rating account of the acquired business shall not be transferred to 30 such person if the director finds that such person acquired the business pri- 31 marily for the purpose of obtaining a lower rate of contributions. Instead, 32 such person shall be assigned the standard rate for new employers under sec- 33 tion 72-1350, Idaho Code. In determining whether the trade or business was 34 acquired primarily for the purpose of obtaining a lower rate of contributions, 35 the director shall use objective factors which may include, but are not lim- 36 ited to, the cost of acquiring the business, whether the person continued the 37 business enterprise of the acquired business, how long such business enter- 38 prise was continued, or whether a substantial number of new employees were 39 hired for performance of duties unrelated to the business activity conducted 40 prior to acquisition. 41 (3) (a) It shall be a violation of this section if a person: 42 (i) Makes any false statement to the department when the maker 43 knows the statement to be false or acts with deliberate ignorance of 44 or reckless disregard for the truth of the matter or willfully fails 45 to disclose a material fact to the department in connection with the 46 transfer of a trade or business; 47 (ii) Prepares any false or antedated report, form, book, paper, 48 record, written instrument, or other matter or thing in connection 49 with the transfer of a trade or business with the intent to submit it 50 or allow it to be submitted to the department as genuine or true; 51 (iii) Knowingly violates or attempts to violate subsection (1) or (2) 52 of this section or any other provision of this chapter related to 53 determining the assignment of a contribution rate or an experience 9 1 rate; or 2 (iv) Knowingly advises another person in a way that results in a 3 violation or an attempted violation of subsection (1) or (2) of this 4 section or any other provision of this chapter related to determining 5 the assignment of a contribution rate or an experience rate. 6 (b) If a person commits any of the acts described in paragraph (a) of 7 this subsection (3), the person shall be subject to the following penal- 8 ties: 9 (i) If the person is a covered employer, a civil money penalty of 10 ten percent (10%) of such person's taxable wages for the four (4) 11 completed consecutive quarters preceding the violation shall be 12 imposed for such year and said penalty shall be deposited in the 13 state employment security administrative and reimbursement fund as 14 established by section 72-1348, Idaho Code. 15 (ii) If the person is not a covered employer, such person shall be 16 subject to a civil money penalty of not more than five thousand dol- 17 lars ($5,000) for each violation. Any such penalty shall be deposited 18 in the state employment security administrative and reimbursement 19 fund as established by section 72-1348, Idaho Code. 20 (4) Every person who knowingly makes any false statement to the depart- 21 ment or knowingly fails to disclose a material fact to the department in con- 22 nection with the transfer of a trade or business, or knowingly prepares any 23 false or antedated report, form, book, paper, record, written instrument, or 24 other matter or thing in connection with the transfer of a trade or business 25 with the intent to submit it or allow it to be submitted to the department as 26 genuine or true, or knowingly violates or attempts to violate subsection (1) 27 or (2) of this section or any other provision of this chapter related to 28 determining the assignment of a contribution rate or an experience rate, or 29 knowingly advises another person to act in a way that results in a violation 30 or an attempted violation of subsection (1) or (2) of this section or any 31 other provision of this chapter related to determining the assignment of a 32 contribution rate or an experience rate, shall be guilty of a felony punish- 33 able as provided in section 18-112, Idaho Code. 34 (5) For purposes of this section: 35 (a) An employer's experience rating account shall consist of the actual 36 contribution, benefit and taxable payroll experience of the employer and 37 any amounts due from the employer under this chapter. When a transferred 38 experience rating account includes amounts due from the employer under 39 this chapter, both the predecessor employer and the successor employer 40 shall be jointly and severally liable for those amounts. 41 (b) "Knowingly" means having actual knowledge of or acting with deliber- 42 ate ignorance of or reckless disregard for the prohibition involved. 43 (c) "Person" has the meaning given such term by section 7701(a)(1) of the 44 Internal Revenue Code of 1986 (26 U.S.C. 7701(a)(1)). 45 (d) A "transfer of a trade or business" occurs whenever a person in any 46 manner acquires or succeeds to all or a portion of a trade or business. 47 Factors the department may consider when determining whether a transfer of 48 a trade or business has occurred include, but are not limited to, the fol- 49 lowing: 50 (i) Whether the successor continued the business enterprise of the 51 acquired business; 52 (ii) Whether the successor purchased, leased or assumed machinery 53 and manufacturing equipment, office equipment, business premises, the 54 business or corporate name, inventories, a covenant not to compete or 55 a list of customers; 10 1 (iii) Continuity of business relationships with third parties such as 2 vendors, suppliers and subcontractors; 3 (iv) A transfer of good will; 4 (v) A transfer of accounts receivable; 5 (vi) Possession and use of the predecessor's sales correspondence; 6 and 7 (vii) Whether the employees remained the same. 8 (e) "Trade or business" includes, but is not limited to, the employer's 9 workforce. The transfer of some or all of an employer's workforce to 10 another employer shall be considered a transfer of a trade or business 11 when, as the result of such transfer, the transferring employer no longer 12 performs trade or business with respect to the transferred workforce, and 13 such trade or business is performed by the employer to whom the workforce 14 is transferred. 15 (f) "Violates or attempts to violate" includes, but is not limited to, 16 intent to evade, misrepresentation or willful nondisclosure. 17 (6) The director shall establish procedures to identify the transfer or 18 acquisition of a business for purposes of this section. 19 (7) This section shall be interpreted and applied in such a manner as to 20 meet the minimum requirements contained in any guidance or regulations issued 21 by the United States department of labor. 22 SECTION 5. That Section 72-1372, Idaho Code, be, and the same is hereby 23 amended to read as follows: 24 72-1372. CIVIL PENALTIES. (1) The following civil penalties shall be 25 assessed by the director: 26 (a) If a determination is made finding that an employer willfully filed a 27 false report, a monetary penalty equal to one hundred percent (100%) of 28 the amount that would be due if the employer had filed a correct report or 29 two hundred fifty dollars ($250), whichever is greater, shall be added to 30 the liability of the employer for each quarter for which the employer 31 willfully filed a false report. For the purposes of this section, a false 32 report includes, but is not limited to, a report for a period wherein an 33 employer pays remuneration for personal services which meets the defini- 34 tion of "wages" under section 72-1328, Idaho Code, and the payment is con- 35 cealed, hidden, or otherwise not reported to the department. 36 (b) If a determination is made finding that an employer willfully failed 37 to file the employer's quarterly unemployment insurance tax report when 38 due, the director shall assess a monetary penalty equal to: 39 (i) Seventy-five dollars ($75.00) or twenty-five percent (25%) of 40 the amount that would be due if the employer had filed a timely quar- 41 terly report, whichever is greater, if the employer had not been 42 found in any previous determination to have willfully failed to file 43 a timely quarterly report for any of the sixteen (16) preceding con- 44 secutive calendar quarters; or 45 (ii) One hundred fifty dollars ($150) or fifty percent (50%) of the 46 amount that would be due if the employer had filed a timely quarterly 47 report, whichever is greater, if the employer had been found in any 48 previous determination to have willfully failed to file a timely 49 quarterly report for no more than one (1) of the sixteen (16) preced- 50 ing consecutive calendar quarters; or 51 (iii) Two hundred fifty dollars ($250) or one hundred percent (100%) 52 of the amount that would be due if the employer had filed a timely 53 quarterly report, whichever is greater, if the employer had been 11 1 found in any previous determination or determinations to have will- 2 fully failed to file a timely quarterly report for two (2) or more of 3 the sixteen (16) preceding consecutive calendar quarters. 4 (c) If a determination is made finding that an employer, or any officer 5 or agent or employee of the employer with the employer's knowledge, will- 6 fully made a false statement or representation or willfully failed to 7 report a material fact when submitting facts to the department concerning 8 a claimant's separation from the employer, a penalty in an amount equal to 9 ten (10) times the weekly benefit amount of such claimant shall be added 10 to the liability of the employer. 11 (d) If a determination is made finding that an employer has induced, 12 solicited,orcoerced or colluded with an employee or former employee to 13 file a false or fraudulent claim for benefits under this chapter, a pen- 14 alty in an amount equal to ten (10) times the weekly benefit amount of 15 such employee or former employee shall be added to the liability of the 16 employer. 17 (e) If a determination is made finding that an employer failed to com- 18 plete and submit an Idaho business registration form when due, as required 19 by section 72-1337(1), Idaho Code, a penalty of five hundred dollars 20 ($500) shall be assessed against the employer. 21 (f) For purposes of paragraphs (c) and (d) of this subsection (1), the 22 term "weekly benefit amount" means the amount calculated pursuant to sec- 23 tion 72-1367(2), Idaho Code. 24 (2) At the discretion of the director, the department may waive all or 25 any part of the penalties imposed pursuant to this section if the employer 26 shows to the satisfaction of the director that it had good cause for failing 27 to comply with the requirements of this chapter and rules promulgated thereun- 28 der. 29 (3) Determinations imposing civil penalties pursuant to this section 30 shall be served in accordance with section 72-1368(5), Idaho Code. Penalties 31 imposed pursuant to this section shall be due and payable twenty (20) days 32 after the date the determination was served unless an appeal is filed in 33 accordance with section 72-1368, Idaho Code, and rules promulgated thereunder. 34 Such appeals shall be conducted in accordance with section 72-1368, Idaho 35 Code, and rules promulgated thereunder. 36 (4) Civil penalties imposed by this section shall be in addition to any 37 other penalties authorized by this chapter. The provisions of this chapter 38 that apply to the collection of contributions, and the rules promulgated 39 thereunder, shall also apply to the collection of penalties imposed pursuant 40 to this section. Amounts collected pursuant to this section shall be paid into 41 the state employment security administrative and reimbursement fund as estab- 42 lished by section 72-1348, Idaho Code.
STATEMENT OF PURPOSE
RS 17405C1
This housekeeping bill contains amendments to Idaho's Employment
Security Law.
Section 1 amends the statute that defines which employers are covered
by Idaho's unemployment insurance program. The amendment replaces the
term "crew leader" with "farm labor contractor" and changes the
coverage provisions for farm labor contractors to be consistent with
Idaho's farm labor contractor licensing law.
Section 2 clarifies that the wages an individual must earn to qualify
for unemployment insurance benefits must be earned from one or more
covered employers.
Sections 3 and 4 consolidate all the provisions related to mandatory
transfers of experience rating accounts into one statute by deleting
such provisions from Section 72-1351, Idaho Code, and moving them to
Section 72-1351A, Idaho Code. Section 4 also specifies the factors
that may be considered when determining whether a transfer of a trade
or business has occurred.
Section 5 provides a civil penalty for employers that collude with a
current or former employee to file a fraudulent claim for unemployment
insurance benefits. Current law provides a civil penalty for
employers that have "induced, solicited or coerced" a current or
former employee to file a fraudulent claim for benefits. This
amendment will extend the civil penalty to situations where an
employer and an employee agree to defraud the Department through the
filing of a fraudulent claim.
FISCAL NOTE
There is no negative impact on the State General Fund. Sections 1, 2,
3 and 4 have no fiscal impact.
Section 5 may increase the amount of civil penalties collected by the
Department which would increase the balance in the Department's
Employment Security Administrative and Reimbursement Fund. If the
amendment deters employers from helping claimants receive benefits to
which they are not entitled, it will also have a positive impact on
the balance in the Department's Unemployment Insurance Trust Fund.
CONTACT
Name: Bob Fick
Agency: Labor, Dept. of
Phone: 332-3570
STATEMENT OF PURPOSE/FISCAL NOTE S 1250