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Alabama.Alabama has amended the regulations under its Unemployment Compensation Law as follows: Electronic reporting. Beginning with the quarter ending June 30, 2008, employers with five or more employees covered by the Law must now submit quarterly contribution and wage reports electronically (online Internet filing or Internet file transfer/upload). Prior law made electronic reporting a requirement for employers with 25 or more covered employees. Magnetic media is no longer an option for reporting. Tax preparers who receive remuneration for filing one or more tax reports as a third-party representative of an employer are now required to file all quarterly contribution and wage reports electronically. Language regarding waivers from the rule has been made more specific. Employers may be given a temporary waiver, but the waiver may not exceed one year. Employers requesting a waiver must now do so in writing and include a business name, address and other information. In addition, the rules specify that employers who have been granted a waiver or are not covered by the rules must file using only the paper forms provided by the Department. Copies will not be accepted. The rules now state that any report filed in an improper format will be returned and deemed "not filed." Employers who fail to timely file reports will be subject to penalties.
Georgia.Georgia has amended its Employment Security Law as follows: Independent contractor status. The definition of independent contractor status has been revised to include a provision that services performed for wages are deemed to be employment unless it is shown that such individual and the services performed for wages are the subject of an SS-8 determination by the Internal Revenue Service, which decided against employee status. The provision stating that services performed outside the usual course of business will not be considered employment has been removed.
State-wide Reserve Ratio. For the period of January 1 through December 31, 2008, and January 1 through December 31, 2009, the overall increase in the rate required will be suspended, except in the event the State-wide Reserve Ratio is less than 1.25 percent on the computation date with respect to rates applicable to calendar year 2008 or 2009, then for each such year the Commissioner of Labor will have the option of imposing an increase in the overall rate of up to 35 percent, as of the computation date, for each employer whose rate is computed under a rate table. Previously, this provision only applied for calendar year 2007.
Rate of benefits. An individual's weekly benefit amount is the whole dollar amount, disregarding any fraction of a dollar, computed by dividing the wages paid him or her in the highest two quarters of the base period by 42 (previously, 44). If an individual fails to meet regular qualifying requirements, his or her weekly benefit amount is computed by dividing the highest single quarter of the base period wages by 21 (previously, 22). Effective July 1, 2007, the minimum weekly benefit amount became $44 and the maximum weekly benefit amount became $320. Effective July 1, 2008, the minimum weekly benefit amount will be $44 and the maximum weekly benefit amount will be $330.
Kentucky.The Regulations pertaining to the Kentucky Unemployment Insurance Law have been amended as follows: Initial or reopened claims for benefits. In order for an unemployed worker to file an initial or reopened claim for benefits when issues regarding the unemployed worker's eligibility or a potentially disqualifying circumstance are detected, a fact finding investigation will be conducted during which the unemployed worker will be responsible for providing picture identification and valid proof of his or her Social Security number and presenting all facts in support of the application.
Michigan. Contribution rates for employers with five or more years of experience will continue to range from 0.06% to 10.30% in 2008. The maximum rate of 10.30% includes a 6.30% maximum chargeable benefit component, a 3.00% maximum account building component and a 1.00% maximum nonchargeable benefits component. Note that if the employer has a delinquency in quarterly tax reports, that employer's maximum tax rate will be 10.30%, and the employer also will be assessed a penalty of 3.00%, which is separate from the contribution rate. The nonchargeable benefits component (NBC) for 2008 may range from 0.06% to 1.00%, depending upon an employer's experience.
Mississippi.Mississippi has amended its regulations under the Employment Security Law as follows:
Payment of contributions. The regulations now require that wages paid from the first day of the calendar year be reported in the calendar quarter in which the wages were paid. Contributions are to be paid for the quarter in which the wages were paid. Prior regulations made contributions due on or before the last day of the month after the calendar quarter when the employer became a liable employer. The regulations now provide that payments of contributions, other than those sent through U.S. mail, are deemed to be made on the date they are received by the agency.
Overpayment. There is no longer a requirement that an application for credits be made within three years.
Disposing of business assets. The regulations now require an employer that disposes of its business assets to report such fact to the agency within 30 days. Prior language required the employer to "immediately" report to the agency.
Power of attorney. This new section provides that any individual or organization providing representation to an employer or claimant where the client is absent must provide a power of attorney signed by the client they represent. A power of attorney is not needed if the individual is a CPA and a member of the AICPA or an attorney and a member of a state Bar Association.
Successor employer/missing reports. The new regulations eliminate the section providing that if a successor employer fails to file any two quarterly reports within the qualifying period by September 30 following the computation date, thereby becoming ineligible for a modified rate, the requirement for the maximum contribution rate would be imposed on the successor for the first year only.
Pennsylvania.--Solvency adjustments for 2008-2012. On July 1 of each year, the Secretary will calculate the trigger percentage to be used in setting the surcharge, additional contributions and employee contributions for the following calendar year. If the trigger percentage is 150% or higher, the surcharge will be a negative 1.1%. If the trigger percentage is at least 125%, but less than 150%, the surcharge will be 0.0% and there will be no additional contribution, or employee contribution for the next year. If the trigger percentage is at least 110%, but less than 125%, the surcharge will be 2.9% and the employee contribution will be 0.02%, but there will be no additional employer contribution. If the trigger percentage is at least 95%, but less than 110%, the surcharge will be 5.8% and the employee contribution will be 0.03%, but there will be no additional employer contribution. If the trigger percentage is at least 75%, but less than 95%, the surcharge will be 5.8%, the employee contribution will be 0.06%, and the additional contribution will be 0.25%. If the trigger percentage is at least 50%, but less than 75%, the surcharge will be 5.8%, the employee contribution will be 0.08%, and the additional contribution will be 0.45%. If the trigger percentage is less than 50%, the surcharge will be 5.8%, the employee contribution will be 0.08%, and the additional contribution will be 0.65%. Also, a trigger percentage of less than 50% also causes a reduction in weekly benefit amounts payable to claimants.
The foregoing rates have been adjusted to yield the amounts indicated at the following trigger percentages: (1) with a trigger percentage of at least 150%, the negative 1.1% surcharge will result in a reduction in employer contributions of $18 million; (2) with a trigger percentage of at least 110%, but less than 125%, the 2.9% surcharge will yield $50 million and the 0.02% employee tax will yield $33,333,333; (3) with a trigger percentage of at least 95%, but less than 110%, the 5.8% surcharge will yield $100 million and the 0.03% employee tax will yield $66,666,666; (4) with a trigger percentage of at least 75%, but less than 95%, the 5.8% surcharge will yield $100 million, the 0.06% employee tax will yield $116,666,666, and the 0.25% additional employer contribution will yield $75 million; (5) with a trigger percentage of at least 50%, but less than 75%, the 5.8% surtax will yield $100 million, the 0.08% employee tax will yield $166,666,666, and the 0.45% additional employer contribution will yield $150 million; and (6) with a trigger percentage of less than 50%, the 5.8% surcharge will yield $100 million, the 0.08% employee tax will yield $166,666,666, the 0.65% additional employer contribution will yield $225 million, and the benefit reduction will yield $52 million.
Contribution rates. For calendar year 2008, the following unemployment compensation solvency measures are in effect: (1) the additional employer contribution is 0.25%; (2) the surcharge tax is 5.8%; and (3) the employee tax is 0.06%. The state adjustment factor for 2008 remains 1.5%. Rates for experience-rated, nondelinquent employers will range from 1.8370% to 9.9836% for 2008 and rates for delinquent employers will range from 5.0110% to 13.1576%. New employers nonconstruction employers pay 3.7030% and new construction employers pay 10.2626% in 2008.
Weekly benefit amounts. For 2008, the minimum weekly benefit is $35 and the maximum weekly benefit amount is $539.
Texas.Texas Governor Rick Perry has announced that state businesses will receive a tax cut in the form of a one-year suspension of the unemployment insurance replenishment tax. According to the governor's statement, about 370,000 Texas businesses will be eligible for the tax cut, which will save employers a total of $90 million. The Texas Workforce Commission (TWC) approved the suspension after its review of employment figures and economic forecasts showed there were sufficient reserves to meet unemployment obligations for 2008.
The governor also said that the TWC will continue to distribute the surplus tax credit announced in October 2007 to those qualifying employers who file quarterly unemployment tax reports and owe unemployment insurance taxes. They will receive the surplus tax credit after their first quarter 2008 tax returns are filed and taxes are paid. Qualifying employers also must have had a payroll in 2007 and must have paid all taxes due. The 2008 unemployment insurance rates also reflect the elimination of the obligation assessment, which was previously a component of the unemployment insurance tax.
Washington.The Washington Employment Security Department has adopted new regulations as follows:
The term "fraud" now means an action by an individual where all of the following elements are present: (a) The individual has made a statement or provided information, (b) The statement was false, (c) The individual either knew the statement was false or did not know whether it was true or false when making it, (d) The statement concerned a fact that was material to the individual's rights and benefits under Title 50 of the Revised Code of Washington, and (e) The individual made the statement with the intent that the Department would rely upon it when taking action. In order to decide whether an individual has committed fraud, the elements above must be shown by convincing evidence because fraud cannot be presumed. Circumstantial evidence, rather than direct evidence, is enough to establish fraud if such evidence is clear, cogent and convincing. This definition of fraud also applies to the term "misrepresentation" concerning the recovery of benefits.
Transfer of business. A predecessor-successor relationship exists when a transfer occurs and one business (successor) acquires all or part of another business (predecessor). It may arise from the transfer of operating assets, including but not limited to the transfer of one or more employees from a predecessor to a successor. It may also arise from an internal reorganization of affiliated companies. Whether or not a predecessor-successor relationship (including a partial successor relationship) exists depends on the totality of the circumstances. An employer may be a predecessor if, during any calendar year, it transfers all or part of its operating assets or a separate unit or branch of its trade or business to another individual or organization. An employer may be a successor if, during any calendar year, it acquires substantially all of a predecessor employer's operating assets. It may be a partial successor if, during any calendar year, it acquires part of a predecessor employer's operating assets or a separate unit or branch of a predecessor employer's trade or business.
A predecessor-successor relationship will not exist when (1) the property is acquired through court proceedings, including bankruptcies, to enforce a lien, security interest, judgment, or repossession under a security agreement unless the court specifies otherwise; or (2) for the purposes of experience rating, when any four consecutive quarters, one of which includes the acquisition date, pass without reportable employment by the predecessor, successor or a combination of both.
When operating assets are transferred from one employer to another by using an intermediary whose role is to arrange or assist the transfer process, the Department will decide on a case-by-case basis whether a predecessor-successor relationship exists. The fact that an intermediary was used does not preclude the existence of a predecessor-successor relationship. In addition, when determining if a predecessor-successor relationship exists, the Department will consider the intent of the parties involved and the economic reality of the transactions, as opposed to the strict legal format of the multiple transfers.
SUTA dumping. In order to prove SUTA dumping, the Department must prove by a preponderance of the evidence that: (a) A business is a successor or partial successor to a predecessor business and (b) A significant purpose for the transfer of a business was to obtain a lower tax rate. A "significant purpose" must be more than an incidental purpose, but may be one of many purposes. The Department may show that a significant purpose for the transfer was to obtain a lower tax rate by factors such as: (a) business records, such as corporate minutes or other documents, showing that a lower tax rate was considered part of the decision for the transfer; (b) an outside party, such as an accounting firm or tax advisor, recommended the transfer in order to lower the tax rate; or (c) the employer knew or should have known that transfer of employees to the successor would lower the tax rate and the actual effort of the transfer was to lower taxes significantly.
Wisconsin.The Wisconsin Unemployment Insurance and Reserves Act has been amended as follows:
Taxable wage base. Beginning in calendar year 2009, each employer will pay unemployment insurance taxes on the first $12,000 of wages it pays each employee. The wage base increases to $13,000 in calendar year 2011 and $14,000 in calendar year 2013.
Tax rates. Beginning in January of 2009 employers with positive account balances will have a decrease of 0.2% (two-tenths of one percent) in their basic tax rate and an increase of 0.2% in their solvency tax rate. Employers with overdrawn account balances will have a decrease of 0.4% (four-tenths of one percent) in their basic tax rate and an increase 0.4% in their solvency tax rate.
Qualifying employment. Beginning with UI benefit years that begin April 6, 2008, claimants are required to have 35 times their weekly benefit rate in total base period wages. Former law required 30 times the weekly benefit rate.
Rate of benefits. As of the week beginning January 4, 2009, the maximum weekly benefit rate will increase from $355 per week to $363 per week. The minimum benefit rate will also increase from $53 per week to $54 per week.
Deferral. Beginning with the first quarter of 2009, employers with a first quarter tax liability of $1,000 or more may defer up to 60 percent of the tax due for the first quarter. Employers taking advantage of the deferral must notify the Department electronically of their intent to defer and must file all quarterly contribution, employment and wage reports electronically in the manner and form prescribed by the Department.
Electronic filing. Beginning with tax and wage reports due for the 3rd quarter of 2008, employers with 25 or more employees are required to file tax and wage reports electronically in the manner and form required by the Department. The penalty for filing wage reports incorrectly increases from $10 to $15 per employee, and the penalty for any late report is $50.