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sb263_05_EN
(136th General Assembly)
(Substitute
Senate Bill Number 263)
AN
ACT
To amend section 4141.24 of
the Revised Code to make changes regarding the treatment of
professional employer organizations and alternate employer
organizations under the Unemployment Compensation Law.
Be
it enacted by the General Assembly of the State of Ohio:
Section
1.
That
section 4141.24 of the Revised Code be amended to read as follows:
Sec.
4141.24.
(A)(1)
The director of job and family services shall maintain a separate
account for each employer and, except as otherwise provided in
division (B) of section 4141.25 of the Revised Code respecting
mutualized contributions, shall credit such employer's account with
all the contributions, or payments in lieu of contributions, which
the employer has paid on the employer's own behalf.
(2)
If, as of the computation date, a contributory employer's account
shows a negative balance computed as provided in division (A)(3) of
section 4141.25 of the Revised Code, less any contributions due and
unpaid on such date, which negative balance is in excess of the
limitations imposed by divisions (A)(2)(a), (b), and (c) of this
section and if the employer's account is otherwise eligible for the
transfer, then before the employer's contribution rate is computed
for the next succeeding contribution period, an amount equal to the
amount of the excess eligible for transfer shall be permanently
transferred from the account of such employer and charged to the
mutualized account provided in division (B) of section 4141.25 of the
Revised Code.
(a)
If as of any computation date, a contributory employer's account
shows a negative balance in excess of ten per cent of the employer's
average annual payroll, then before the employer's contribution rate
is computed for the next succeeding contribution period, an amount
equal to the amount of the excess shall be transferred from the
account as provided in this division. No contributory employer's
account may have any excess transferred pursuant to division
(A)(2)(a) of this section, unless the employer's account has shown a
positive balance for at least two consecutive computation dates prior
to the computation date with respect to which the transfer is
proposed. Each time a transfer is made pursuant to division (A)(2)(a)
of this section, the employer's account is ineligible for any
additional transfers under that division, until the account shows a
positive balance for at least two consecutive computation dates
subsequent to the computation date of which the most recent transfer
occurs pursuant to division (A)(2)(a), (b), or (c) of this section.
(b)
If at the next computation date after the computation date at which a
transfer from the account occurs pursuant to division (A)(2)(a) of
this section, a contributory employer's account shows a negative
balance in excess of fifteen per cent of the employer's average
annual payroll, then before the employer's contribution rate is
computed for the next succeeding contribution period an amount equal
to the amount of the excess shall be permanently transferred from the
account as provided in this division.
(c)
If at the next computation date subsequent to the computation date at
which a transfer from a contributory employer's account occurs
pursuant to division (A)(2)(b) of this section, the employer's
account shows a negative balance in excess of twenty per cent of the
employer's average annual payroll, then before the employer's
contribution rate is computed for the next succeeding contribution
period, an amount equal to the amount of the excess shall be
permanently transferred from the account as provided in this
division.
(d)
If no transfer occurs pursuant to division (A)(2)(b) or (c) of this
section, the employer's account is ineligible for any additional
transfers under division (A)(2) of this section until the account
requalifies for a transfer pursuant to division (A)(2)(a) of this
section.
(B)
Any employer may make voluntary payments in addition to the
contributions required under this chapter, in accordance with rules
established by the director. Such payments shall be included in the
employer's account as of the computation date, provided they are
received by the director by the thirty-first day of December
following such computation date. Such voluntary payment, when
accepted from an employer, will not be refunded in whole or in part.
In determining whether an employer's account has a positive balance
on two consecutive computation dates and is eligible for transfers
under division (A)(2) of this section, the director shall exclude any
voluntary payments made subsequent to the last transfer made under
division (A)(2) of this section.
(C)
All contributions to the fund shall be pooled and available to pay
benefits to any individual entitled to benefits irrespective of the
source of such contributions.
(D)(1)
For the purposes of this section and sections 4141.241 and 4141.242
of the Revised Code, an employer's account shall be charged only for
benefits based on remuneration paid by such employer. Benefits paid
to an eligible individual shall be charged against the account of
each employer within the claimant's base period in the proportion to
which wages attributable to each employer of the claimant bears to
the claimant's total base period wages. Charges to the account of a
base period employer with whom the claimant is employed part-time at
the time the claimant's application for a determination of benefits
rights is filed shall be charged to the mutualized account when all
of the following conditions are met:
(a)
The claimant also worked part-time for the employer during the base
period of the claim.
(b)
The claimant is unemployed due to loss of other employment.
(c)
The employer is not a reimbursing employer under section 4141.241 or
4141.242 of the Revised Code.
(2)
Notwithstanding division (D)(1) of this section, charges to the
account of any employer, including any reimbursing employer, shall be
charged to the mutualized account if it finally is determined by a
court on appeal that the employer's account is not chargeable for the
benefits.
(3)(a)
Any benefits paid to a claimant under section 4141.28 of the Revised
Code prior to a final determination of the claimant's right to the
benefits shall be charged to the employer's account as provided in
division (D)(1) of this section, provided that if there is no final
determination of the claim by the subsequent thirtieth day of June,
the employer's account shall be credited with the total amount of
benefits that has been paid prior to that date, based on the
determination that has not become final. The total amount credited to
the employer's account shall be charged to a suspense account, which
shall be maintained as a separate bookkeeping account and
administered as a part of this section, and shall not be used in
determining the account balance of the employer for the purpose of
computing the employer's contribution rate under section 4141.25 of
the Revised Code.
(b)
If it is finally determined that the claimant is entitled to all or a
part of the benefits in dispute, the suspense account shall be
credited and the appropriate employer's account charged with the
benefits. If it is finally determined that the claimant is not
entitled to all or any portion of the benefits in dispute, the
benefits shall be credited to the suspense account and, except as
provided in division (D)(3)(d) of this section, a corresponding
charge made to the mutualized account established in division (B) of
section 4141.25 of the Revised Code, provided that, except as
otherwise provided in this section, if benefits are chargeable to an
employer or group of employers who is required or elects to make
payments to the fund in lieu of contributions under section 4141.241
of the Revised Code, the benefits shall be charged to the employer's
account in the manner provided in division (D)(1) of this section and
division (B) of section 4141.241 of the Revised Code, and no part of
the benefits may be charged to the suspense account provided in this
division.
(c)
Except as provided in division (D)(3)(d) of this section, to the
extent that benefits that have been paid to a claimant and charged to
the employer's account are found not to be due the claimant and are
recovered by the director as provided in section 4141.35 of the
Revised Code, they shall be credited to the employer's account.
(d)(i)
An employer's account shall not be credited for amounts recovered by
the director pursuant to division (D)(3)(c) of this section, and the
mutualized account established in division (B) of section 4141.25 of
the Revised Code shall not be charged pursuant to division (D)(3)(b)
of this section, for benefits that have been paid to a claimant and
are subsequently found not to be due to the claimant, if it is
determined by the director, on or after October 21, 2013, that both
of the following have occurred:
(I)
The benefits were paid because the claimant's employer, or any
employee, officer, or agent of that employer, failed to respond
timely or adequately to a request for information regarding a
determination of benefit rights or claims for benefits under section
4141.28 of the Revised Code.
(II)
The claimant's employer, or any employee, officer, or agent of that
employer, on behalf of the employer, previously established a pattern
of failing to respond timely or adequately within the same calendar
year period pursuant to division (D)(3)(d)(ii)(III) of this section.
(ii)
For purposes of division (D)(3)(d) of this section:
(I)
A response is considered "timely" if the response is
received by the director within the time provided under section
4141.28 of the Revised Code.
(II)
A response is considered "adequate" if the employer or
employee, officer, or agent of that employer provided answers to all
questions raised by the director pursuant to section 4141.28 of the
Revised Code or participated in a fact-finding interview if requested
by the director.
(III)
A "pattern of failing" is established after the third
instance of benefits being paid because the claimant's employer, or
any employee, officer, or agent of that employer, on behalf of the
employer, failed to respond timely or adequately to a request for
information regarding a determination of benefit rights or claims for
benefits under section 4141.28 of the Revised Code within a calendar
year period.
(e)
If the mutualized account established in division (B) of section
4141.25 of the Revised Code is not charged for benefits credited to a
suspense account pursuant to division (D)(3)(d) of this section, a
corresponding charge shall be made to the account of the employer
whose failure to timely or adequately respond to a request for
information caused the erroneous payment.
(f)
The appeal provisions of sections 4141.281 and 4141.282 of the
Revised Code shall apply to all determinations issued under division
(D)(3)(d) of this section.
(4)
The director shall notify each employer at least once each month of
the benefits charged to the employer's account since the last
preceding notice; except that for the purposes of sections 4141.241
and 4141.242 of the Revised Code which provides the billing of
employers on a payment in lieu of a contribution basis, the director
may prescribe a quarterly or less frequent notice of benefits charged
to the employer's account. Such notice will show a summary of the
amount of benefits paid which were charged to the employer's account.
This notice shall not be deemed a determination of the claimant's
eligibility for benefits. Any employer so notified, however, may file
within fifteen days after the mailing date of the notice, an
exception to charges appearing on the notice on the grounds that such
charges are not in accordance with this section. The director shall
promptly examine the exception to such charges and shall notify the
employer of the director's decision thereon, which decision shall
become final unless appealed to the unemployment compensation review
commission in the manner provided in section 4141.26 of the Revised
Code. For the purposes of this division, an exception is considered
timely filed when it has been received as provided in division (D)(1)
of section 4141.281 of the Revised Code.
(E)
The director shall terminate and close the account of any
contributory employer who has been subject to this chapter if the
enterprise for which the account was established is no longer in
operation and it has had no payroll and its account has not been
chargeable with benefits for a period of five consecutive years. The
amount of any positive balance, computed as provided in division
(A)(3) of section 4141.25 of the Revised Code, in an account closed
and terminated as provided in this section shall be credited to the
mutualized account as provided in division (B)(2)(b) of section
4141.25 of the Revised Code. The amount of any negative balance,
computed as provided in division (A)(3) of section 4141.25 of the
Revised Code, in an account closed and terminated as provided in this
section shall be charged to the mutualized account as provided in
division (B)(1)(b) of section 4141.25 of the Revised Code. The amount
of any positive balance or negative balance, credited or charged to
the mutualized account after the termination and closing of an
employer's account, shall not thereafter be considered in determining
the contribution rate of such employer. The closing of an employer's
account as provided in this division shall not relieve such employer
from liability for any unpaid contributions or payment in lieu of
contributions which are due for periods prior to such closing.
If
the director finds that a contributory employer's business is closed
solely because of the entrance of one or more of the owners,
officers, or partners, or the majority stockholder, into the armed
forces of the United States, or any of its allies, or of the United
Nations after July 1, 1950, such employer's account shall not be
terminated and if the business is resumed within two years after the
discharge or release of such persons from active duty in the armed
forces, the employer's experience shall be deemed to have been
continuous throughout such period. The reserve ratio of any such
employer shall be the total contributions paid by such employer minus
all benefits, including benefits paid to any individual during the
period such employer was in the armed forces, based upon wages paid
by the employer prior to the employer's entrance into the armed
forces divided by the average of the employer's annual payrolls for
the three most recent years during the whole of which the employer
has been in business.
(F)
If an employer transfers all of its trade or business to another
employer or person, the acquiring employer or person shall be the
successor in interest to the transferring employer and shall assume
the resources and liabilities of such transferring employer's
account, and continue the payment of all contributions, or payments
in lieu of contributions, due under this chapter.
If
an employer or person acquires substantially all, or a clearly
segregable and identifiable portion of an employer's trade or
business, then upon the director's approval of a properly completed
application for successorship, the employer or person acquiring the
trade or business, or portion thereof, shall be the successor in
interest. The director by rule may prescribe procedures for effecting
transfers of experience as provided for in this section.
(G)
Notwithstanding sections 4141.09, 4141.23, 4141.24, 4141.241,
4141.242, 4141.25, 4141.26, and 4141.27 of the Revised Code, both of
the following apply regarding assignment of rates and transfers of
experience:
(1)
If an employer transfers its trade or business, or a portion thereof,
to another employer and, at the time of the transfer, both employers
are under substantially common ownership, management, or control,
then the unemployment experience attributable to the transferred
trade or business, or portion thereof, shall be transferred to the
employer to whom the business is so transferred. The director shall
recalculate the rates of both employers and those rates shall be
effective immediately upon the date of the transfer of the trade or
business.
(2)
Whenever a person is not an employer under this chapter at the time
the person acquires the trade or business of an employer, the
unemployment experience of the acquired trade or business shall not
be transferred to the person if the director finds that the person
acquired the trade or business solely or primarily for the purpose of
obtaining a lower rate of contributions. Instead, that person shall
be assigned the applicable new employer rate under division (A)(1) of
section 4141.25 of the Revised Code.
(H)
The director shall establish procedures to identify the transfer or
acquisition of a trade or business for purposes of this section and
shall adopt rules prescribing procedures for effecting transfers of
experience as described in this section.
(I)
No rate of contribution less than two and seven-tenths per cent shall
be permitted a contributory employer succeeding to the experience of
another contributory employer pursuant to this section for any period
subsequent to such succession, except in accordance with rules
prescribed by the director, which rules shall be consistent with
federal requirements for additional credit allowance in section 3303
of the "Internal Revenue Code of 1954" and consistent with
this chapter, except that such rules may establish a computation date
for any such period different from the computation date generally
prescribed by this chapter, and may define "calendar year"
as meaning a twelve-consecutive-month period ending on the same day
of the year as that on which such computation date occurs.
(J)
The director may prescribe rules for the establishment, maintenance,
and dissolution of common contribution rates for two or more
contributory employers, and in accordance with such rules and upon
application by two or more employers shall establish such common rate
to be computed by merging the several contribution rate factors of
such employers for the purpose of establishing a common contribution
rate applicable to all such employers.
(K)
The director shall adopt rules applicable to professional employer
organizations and professional employer organization reporting
entities to address the method in which a professional employer
organization or professional employer organization reporting entity
reports quarterly wages and contributions to the director for shared
employees.
(1)
The rules shall
recognize
do
both of the following:
(a)
Recognize
a
professional employer organization or professional employer
organization reporting entity as the employer of record of the shared
employees of the professional employer organization or professional
employer organization reporting entity for reporting purposes;
however, the
rules
shall
(b)
Except as provided in division (K)(5) of this section,
require
that each shared employee of a single client employer be reported
under a separate and unique subaccount of the professional employer
organization or professional employer organization reporting entity
to reflect the experience of the shared employees of that client
employer.
(2)
The director shall use a subaccount solely to determine experience
rates for that individual subaccount on an annual basis and shall
recognize a professional employer organization or professional
employer organization reporting entity as the employer of record
associated with each subaccount. The director
shall
may
combine
the rate experience that existed on a client employer's account prior
to entering into a professional employer organization agreement with
the experience
accumulated
as a subaccount of
attributable
to the client employer while subject to the agreement with
the
professional employer organization or professional employer
organization reporting entity. The combined experience
shall
may
remain
with the client
employer's
account upon termination of the professional employer organization
agreement.
(3)
A professional employer organization or professional employer
organization reporting entity shall provide a power of attorney or
other evidence, which evidence may be included as part of a
professional employer organization agreement, completed by each
client employer of the professional employer organization or
professional employer organization reporting entity, authorizing the
professional employer organization or professional employer
organization reporting entity to act on behalf of the client employer
in accordance with the requirements of this chapter.
(4)
Any rule adopted pursuant to division (K) of this section also shall
include administrative requirements that permit a professional
employer organization or a professional employer organization
reporting entity to transmit any reporting and payment data required
under division
(K)(1)
(K)(1)(b)
of this section collectively as a single filing with the director.
(5)
(5)(a)
A professional employer organization or professional employer
organization reporting entity may elect to report shared employees of
a client employer under the account and experience rate of the
professional employer organization or professional employer
organization reporting entity by giving notice to the director.
(b)
If a professional employer organization or professional employer
organization reporting entity has made an election under division
(K)(5)(a) of this section and the election has been in effect for two
or more calendar years, the professional employer organization or
professional employer organization reporting entity may change the
election by notifying the director.
(c)
If a professional employer organization or professional employer
organization reporting entity makes or changes an election under
division (K)(5)(a) or (b) of this section, the director shall
recalculate the experience rate of the professional employer
organization or professional employer organization reporting entity
to reflect the experience attributable to the shared employees of a
client employer under the election. The recalculated rate shall be
effective beginning in the calendar year following the date the
director receives notice of the election.
(6)
As used in division (K) of this section, "client employer,"
"professional employer organization," "professional
employer organization agreement," "professional employer
organization reporting entity," and "shared employee"
have the same meanings as in section 4125.01 of the Revised Code.
(L)
The director shall adopt rules applicable to alternate employer
organizations as defined in section 4133.01 of the Revised Code that
are consistent with the requirements of and rules adopted under
division (K) of this section.
Section
2.
That
existing section 4141.24 of the Revised Code is hereby repealed.
Section
3.
(A)
As used in this section:
(1)
"Professional employer organization," "professional
employer organization reporting entity," and "shared
employee" have the same meanings as in section 4125.01 of the
Revised Code.
(2)
"Alternate employer organization" and "worksite
employee" have the same meanings as in section 4133.01 of the
Revised Code.
(B)
A professional employer organization, professional employer
organization reporting entity, or alternate employer organization may
elect to report quarterly wages and contributions for shared or
worksite employees using the organization's or entity's account and
experience rate under division (K)(5) of section 4141.24 of the
Revised Code, as amended by this act, by giving notice to the
Director of Job and Family Services. To be valid, the notice must be
received by the Director not later than sixty days after the
effective date of this section.
(C)
If a professional employer organization, professional employer
organization reporting entity, or alternate employer organization
makes an election under division (B) of this section, the Director
shall recalculate the experience rate of the professional employer
organization, professional employer organization reporting entity, or
alternate employer organization to reflect the experience
attributable to the shared or worksite employees of a client employer
under the election. The recalculated rate shall be effective
immediately upon the date the Director receives notice of the
election.
Speaker
___________________ of the House of Representatives.
President
___________________ of the Senate.
Passed
________________________, 20____
Approved
________________________, 20____
Governor.
The section numbering of law
of a general and permanent nature is complete and in conformity with
the Revised Code.
Director, Legislative
Service Commission.
Filed
in the office of the Secretary of State at Columbus, Ohio, on the
____ day of ___________, A. D. 20____.
Secretary of State.
File
No. _________ Effective Date ___________________