§383-62  Rate of contributions; financingbenefits paid to government employees and employees of nonprofit organizations. (a)  Except as otherwise provided in this section, each employer shall paycontributions determined in accordance with sections 383-66 and 383-68.

Notwithstanding any other provision of thispart to the contrary, for the calendar years 1977 and 1978 each employer(except any employer making payments instead of contributions pursuant tosubsection (b) or (d)) shall pay contributions equal to three and one-half percent of wages paid by the employer during such calendar years.

(b)  In lieu of contributions required ofemployers under this chapter, the State and its political subdivisions andinstrumentalities (hereinafter referred to as "governmentalemployers" or "governmental employer" as the case may be) shallpay in advance to the director of labor and industrial relations for the fundan amount equivalent to:

(1)  The amount of regular benefits plus one-half theamount of extended benefits payable in each calendar quarter beginning prior toJanuary 1, 1979, to individuals based on wages paid by governmentalemployers; and

(2)  The amount of regular benefits plus the amount ofextended benefits payable in each calendar quarter beginning afterDecember 31, 1978, to individuals based on wages paid by governmentalemployers.

The director shall notify each governmentalemployer of the amount of money required to be paid to the director.  Suchamounts shall be paid to the director prior to the commencement of the calendarquarter in which benefits are payable.

If benefits paid an individual are based onwages paid by one or more governmental employers and one or more otheremployers, or on wages paid by two or more governmental employers, the amountpayable by a governmental employer to the director for the fund shall be inaccordance with the provisions of paragraphs (1) and (2) of subsection (e) ofthis section, governing the allocation of benefit costs among employers liablefor payments in lieu of contributions and between such employers and employersliable for contributions.

For the purposes of paragraphs (1) and (2) ofsubsection (e), governmental employers are employers liable for payments inlieu of contributions.  The amount of payment required from governmentalemployers shall be ascertained by the department of labor and industrialrelations and shall be paid from the general funds of such governmentalemployers upon approval by the comptroller of the State or the director of financeof the respective counties, except that to the extent that benefits are paid onthe basis of wages paid by governmental employers from special administrativefunds, the payment into the unemployment compensation fund shall be made fromsuch special funds.

(c)  Notwithstanding the provisions ofsubsection (b) of this section to the contrary, any governmental employer whichis or becomes subject to this chapter after December 31, 1977, may, inaccordance with this subsection (c), elect to pay contributions pursuant to theprovisions of this part (with the exception of the provisions in subsection (b)and subsections (d) through (g) of this section) applicable to otheremployers.  For the purposes of this subsection (c) the term "governmentalemployer" shall apply to the State and to each county of this State, asseparate and individual employers.

(1)  Any governmental employer which is subject tothis chapter on January 1, 1978, may elect to become liable forcontributions for a period of not less than two calendar years beginning withJanuary 1, 1978; provided it files with the department a written notice ofits election within the thirty-day period following such date.

(2)  Any governmental employer which becomes subjectto this chapter after January 1, 1978, may elect to become liable forcontributions for a period beginning with the date on which such subjectivitybegins and continuing for not less than two calendar years thereafter by filingwith the department a written notice of its election within the thirty-dayperiod following the date on which such subjectivity begins.

(3)  Any governmental employer which has been makingpayments in lieu of contributions in accordance with subsection (b) of thissection for a period subsequent to January 1, 1978, may elect to becomeliable for contributions for a period of not less than two calendar yearsbeginning with January 1 of the year following the year in which theelection is made by filing with the department a written notice of its electionnot later than thirty days prior to the beginning of any calendar year.

(4)  Any governmental employer which makes an electionin accordance with paragraph (1), (2), or (3) of this subsection shall continueto be liable for contributions until it files with the department a writtennotice terminating its election not later than thirty days prior to thebeginning of the calendar year for which such termination shall be effective.

(5)  The department may for good cause extend theperiod within which a notice of election or a notice of termination must befiled.

(6)  The department shall notify each governmentalemployer of any determination which it may make of the effective date of anyelection which such governmental employer makes and of any termination of suchelection.  Such determination shall be conclusive upon such governmentalemployer unless, within fifteen days after the notification was mailed ordelivered to it, such governmental employer files with the department anapplication for review and redetermination, setting forth the reasonstherefor.  The department shall promptly review and reconsider itsdetermination and shall thereafter issue a redetermination in any case in whichsuch application has been filed.  Any such redetermination shall be conclusiveupon the governmental employer unless, within fifteen days after theredetermination was mailed or otherwise delivered to it, the governmentalemployer files written notice of appeal with the department setting forth thereasons for the appeal.  The appeal shall be heard by a referee in accordancewith applicable provisions of sections 383-38 and 383-39, and the decision ofthe referee shall be subject to the provisions of section 383-41.

(7)  Should any governmental employer, having madepayments in lieu of contributions in accordance with subsection (b) of thissection, elect to pay contributions under this part, any amount of positivereserve balance remaining in the self-financing account of such employer afterall liabilities against such account under subsection (b) of this section havebeen satisfied shall be refunded to such employer.

(8)  Any governmental employer which elects to becomeliable for contributions under this part shall pay contributions for the firstyear of such election at the rate which applies to employers who become subjectto this chapter during such year.

(d)  Benefits paid to employees of nonprofitorganizations shall be financed in accordance with the provisions of thissubsection.  For the purpose of this subsection, a nonprofit organization is anorganization (or groups of organizations) described in section 501(c)(3) of theUnited States Internal Revenue Code which is exempt from income tax undersection 501(a) of such code.

(1)  Liability for contributions and election ofreimbursement.  Any nonprofit organization which is, or becomes, subject tothis chapter on or after January 1, 1972, shall pay contributions underthe provisions of this part (with the exception of the provisions in subsection(b) of this section) applicable to other employers unless it elects, inaccordance with this paragraph, to pay to the director of labor and industrialrelations for the fund an amount equal to the amount of regular benefits and ofone-half of the extended benefits paid, that is attributable to service in theemploy of such nonprofit organization, to individuals for weeks of unemploymentwhich begin during the effective period of such election.

(A)  Any nonprofit organization which is, orbecomes, subject to this chapter on January 1, 1972, may elect to becomeliable for payments in lieu of contributions for a period of not less than twocalendar years beginning with January 1, 1972, provided it files with thedepartment a written notice of its election within the thirty-day period immediatelyfollowing such date, or within a like period immediately following the date ofenactment of this subparagraph, whichever occurs later.

(B)  Any nonprofit organization which becomessubject to this chapter after January 1, 1972, may elect to become liablefor payment in lieu of contributions for a period beginning with the date onwhich such subjectivity begins and continuing for not less than two calendaryears thereafter by filing a written notice of its election with the departmentnot later than thirty days immediately following the date of the determinationof such subjectivity.

(C)  Any nonprofit organization which makes anelection in accordance with subparagraph (A) or (B) of this paragraph willcontinue to be liable for payments in lieu of contributions until it files withthe department a written notice terminating its election not later than thirtydays prior to the beginning of the calendar year for which such terminationshall be effective.

(D)  Any nonprofit organization which has beenpaying contributions under this chapter for a period subsequent toJanuary 1, 1972, may change to a reimbursable basis by filing with thedepartment not later than thirty days prior to the beginning of any calendaryear a written notice of election to become liable for payments in lieu ofcontributions.  Such election shall not be terminable by the organization forthat and the next calendar year.

(E)  The department may for good cause extendthe period within which a notice of election, or a notice of termination, mustbe filed and may permit an election to be retroactive but not any earlier thanwith respect to benefits paid after December 31, 1971.

(F)  The department, in accordance with suchregulations as the director of labor and industrial relations may prescribe,shall notify each nonprofit organization of any determination which it may makeof such organization's status as an employer and of the effective date of anyelection which such organization makes and of any termination of suchelection.  Such determination shall be conclusive upon such organizationunless, within fifteen days after the notice thereof was mailed to its lastknown address or otherwise delivered to it, such organization files with thedepartment an application for review and redetermination, setting forth thereasons therefor.  The department shall promptly review and reconsider itsdetermination and shall thereafter issue a redetermination in any case in whichsuch application has been filed.  Any such redetermination shall be conclusiveupon the organization unless, within fifteen days after the redetermination wasmailed to its last known address or otherwise delivered to it, the organizationfiles written notice of appeal with the department, setting forth the reasonsfor the appeal.  The appeal shall be heard by a referee in accordance withapplicable provisions of sections 383-38 and 383-39, and the decision of thereferee shall be subject to the provisions of section 383-41.

(2)  Reimbursement payments.  Payments in lieu of contributionsshall be made in accordance with the provisions of subparagraph (A).

(A)  As determined by the director of labor andindustrial relations, the department shall bill each nonprofit organization (orgroup of such organizations) which has elected to make payments in lieu ofcontributions for an amount equal to the full amount of regular benefits plusone-half of the amount of extended benefits paid during the week, or otherprescribed period, that is attributable to service in the employ of such organizationother than previously uncovered services as defined in section 383-22(b).

(B)  Payment of any bill rendered undersubparagraph (A) shall be made not later than thirty days after such bill wasmailed to the last known address of the nonprofit organization or was otherwisedelivered to it, unless there has been an application for review andredetermination in accordance with subparagraph (D).

(C)  Payments made by any nonprofitorganization under the provisions of this subsection shall not be deducted ordeductible, in whole or in part, from the remuneration of individuals in theemploy of the organization.

(D)  The amount due specified in any bill fromthe department shall be conclusive and binding upon a nonprofit organizationunless, within fifteen days after the notice thereof was mailed to its lastknown address or otherwise delivered to it, such organization files with thedepartment an application for review and redetermination, setting forth thereasons therefor.  The department shall promptly review and reconsider theamount due specified in the bill and shall thereafter issue a redeterminationin which such application has been filed.  Any such redetermination shall beconclusive on the organization unless, within fifteen days after the redeterminationwas mailed to its last known address or otherwise delivered to it, theorganization filed written notice of appeal with the department, setting forththe reasons for the appeal.  The appeal shall be heard by a referee inaccordance with applicable provisions of sections 383-38 and 383-39, and thedecision of the referee shall be subject to the provisions of section 383-41.

(3)  Provision of security.  Any nonprofitorganization that elects to become liable for payments in lieu of contributionsshall be required, within thirty days after the effective date of its election,to deposit with the department an amount of money as security.

(A)  The amount of the deposit required by thisparagraph shall be equal to .2 per cent of the organization's total wages paidfor employment during the calendar year immediately preceding the effectivedate of the election.  If the nonprofit organization did not pay wages in eachof the four calendar quarters of such calendar year, the amount of the depositshall be as determined by the department.

(B)  Any deposit of money in accordance withthis paragraph shall be retained by the department in an escrow account untilliability under the election is terminated, at which time it shall be returnedto the organization, less any deductions as hereinafter provided.  Thedepartment may deduct from the money deposited under this paragraph by anonprofit organization to the extent necessary to satisfy any due and unpaidpayments in lieu of contributions.  The department shall require theorganization within thirty days following any deduction from a money depositunder the provisions of this subparagraph to deposit sufficient additionalmoney to make whole the organization's deposit at the prior level.  Thedepartment may, at any time, review the adequacy of the deposit made by anyorganization.  If, as a result of such review, the department determines thatan adjustment is necessary, it shall require the organization to makeadditional deposit within thirty days of written notice of its determination orshall return to the organization such portion of the deposit as it no longerconsiders necessary, whichever action is appropriate.  Disposition of incomefrom moneys held in escrow shall be governed by the applicable provisions ofthe state law.

(C)  If any nonprofit organization fails tomake a deposit, or to increase or make whole the amount of a previously madedeposit, as provided under this paragraph, the department may terminate suchorganization's election to make payments in lieu of contributions and suchtermination shall continue for not less than thefour-consecutive-calendar-quarter period beginning with the quarter in whichsuch termination becomes effective; provided that the department may extend forgood cause the applicable deposit or adjustment period by not more than thirtydays.

(e)  Each employer, other than governmentemployers, that is liable for payments in lieu of contributions under thissection shall pay to the director of labor and industrial relations for thefund the amount of regular benefits plus the amount of one-half of extendedbenefits paid that are attributable to service in the employ of such employer. If benefits paid to an individual are based on wages paid by more than oneemployer and one or more of such employers are liable for payments in lieu ofcontributions, the amount payable to the fund by each employer that is liablefor such payments shall be determined in accordance with the provisions ofparagraph (1) or paragraph (2).

(1)  Proportionate allocation when fewer than allbase-period employers are liable for reimbursement.  If benefits paid to anindividual are based on wages paid by one or more employers that are liable forpayments in lieu of contributions and on wages paid by one or more employersthat are liable for contributions, the amount of benefits payable by eachemployer that is liable for payments in lieu of contributions shall be anamount which bears the same ratio to the total benefits paid to the individualas the total base-period wages paid to the individual by such employer bear tothe total base-period wages paid to the individual by all of the individual'sbase-period employers.

(2)  Proportionate allocation when all base-periodemployers are liable for reimbursement.  If benefits paid to an individual arebased on wages paid by two or more employers that are liable for payments inlieu of contributions, the amount of benefits payable by each such employershall be an amount which bears the same ratio to the total benefits paid to theindividual as the total base-period wages paid to the individual by suchemployer bear to the total base-period wages paid to the individual by all ofthe individual's base-period employers.

(f)  Two or more employers, includinggovernmental employers, that have become liable for payments in lieu ofcontributions, may file a joint application to the department of labor andindustrial relations for the establishment of a group account for the purposeof sharing the cost of benefits paid that are attributable to service in theemploy of such employers.  Each such application shall identify and authorize agroup representative to act as the group's agent for purposes of thissubsection.  Upon its approval of the application, the department shallestablish a group account for such employers effective as of the beginning ofthe calendar quarter in which the department receives the application, and itshall notify the group's representative of the effective date of the account. Such account shall remain in effect for not less than two years and thereafteruntil terminated at the discretion of the department or upon application by thegroup.  The director of labor and industrial relations shall prescribe suchregulations as the director deems necessary with respect to applications forestablishment, maintenance and termination of group accounts that areauthorized by this paragraph, for addition of new members to, and withdrawal ofactive members from, such accounts, and for the determination of the amountsthat are payable under this paragraph by members of the group and the time andmanner of such payments.

(g)  When a nonprofit organization terminatesits self-financing status and elects to pay contributions under this chapter,any remaining amount of positive reserve balance in its self-financing accountwill be transferred to its contributory reserve account.  The department shalldetermine the contribution rate of such employer in accordance with provisionsof section 383-66(2). [L 1939, c 219, §7(b); am L 1941, c 304, §1, subs 20; RL1945, §4247; am L 1953, c 41, §1(5); RL 1955, §93-61; am L 1959, c 222, §1(3);am L Sp 1959 2d, c 1, §27; am L 1964, c 55, §3; HRS §383-62; am L 1971, c 187,§7; am L 1973, c 120, §2; am L 1976, c 157, §§4, 6; am L 1977, c 148, §6 and c169, §1; am L 1980, c 232, §20; gen ch 1985; am L 1986, c 180, §1]

 

Attorney General Opinions

 

  Subsection (b) is in itself an authorization for payment ofbenefits from the general funds of the governmental employers and moneys fromsaid funds may be used for payment of benefits to legislative employees.  Att.Gen Op. 61-63.

 

Case Notes

 

  Taxpayer's delay in filing its self-financing application didnot constitute good cause.  70 H. 72, 762 P.2d 796.

  Cited:  41 H. 508, 509.