State Codes and Statutes
Statutes > Utah > Title-35a > Chapter-04 > 35a-4-30435A-4-304. Special provisions regarding transfers of unemployment experienceand assignment rates.
(1) As used in this section:
(a) "Knowingly" means having actual knowledge of or acting with deliberate ignoranceor reckless disregard for the prohibition involved.
(b) "Person" has the meaning given that term by Section 7701(a)(1) of the InternalRevenue Code of 1986.
(c) "Trade or business" includes the employer's workforce.
(d) "Violate or attempt to violate" includes intent to evade, misrepresentation, or willfulnondisclosure.
(2) Notwithstanding any other provision of this chapter, Subsections (3) and (4) shallapply regarding assignment of rates and transfers of unemployment experience.
(3) (a) If an employer transfers its trade or business, or a portion of its trade or business,to another employer and, at the time of the transfer, there is common ownership, management, orcontrol of the employers, then the unemployment experience attributable to each employer shallbe combined into a common experience rate calculation.
(b) The contribution rates of the employers shall be recalculated and made effective uponthe date of the transfer of trade or business as determined by division rule in accordance withTitle 63G, Chapter 3, Utah Administrative Rulemaking Act.
(c) (i) If one or more of the employers is a qualified employer at the time of the transfer,then all employing units that are party to a transfer described in Subsection (3)(a) of this sectionshall be assigned an overall contribution rate under Subsection 35A-4-303(4)(d), using combinedunemployment experience rating factors, for the rate year during which the transfer occurred andfor the subsequent three rate years.
(ii) If none of the employing units is a qualified employer at the time of the transfer, thenall employing units that are party to the transfer described in Subsection (3)(a) shall be assignedthe highest overall contribution rate applicable at the time of the transfer to any employer who isparty to the acquisition for the rate year during which the transfer occurred and for subsequentrate years until the time when one or more of the employing units is a qualified employer.
(iii) Once one or more employing units described in Subsection (3)(c)(ii) is a qualifiedemployer, all the employing units shall be assigned an overall rate under Subsection35A-4-303(4)(d), using combined unemployment experience rating factors for subsequent rateyears, not to exceed three years following the year of the transfer.
(d) The transfer of some or all of an employer's workforce to another employer shall beconsidered a transfer of its trade or business when, as the result of the transfer, the transferringemployer no longer performs trade or business with respect to the transferred workforce, and thetrade or business is now performed by the employer to whom the workforce is transferred.
(4) (a) Whenever a person is not an employer under this chapter at the time it acquiresthe trade or business of an employer, the unemployment experience of the acquired business shallnot be transferred to that person if the division finds that the person acquired the business solelyor primarily for the purpose of obtaining a lower rate of contributions.
(b) The person shall be assigned the applicable new employer rate under Subsection35A-4-303(5).
(c) In determining whether the business was acquired solely or primarily for the purposeof obtaining a lower rate of contributions, the division shall use objective factors which may
include:
(i) the cost of acquiring the business;
(ii) whether the person continued the business enterprise of the acquired business;
(iii) how long the business enterprise was continued; or
(iv) whether a substantial number of new employees were hired for performance ofduties unrelated to the business activity conducted prior to acquisition.
(5) (a) If a person knowingly violates or attempts to violate Subsection (3) or (4) or anyother provision of this chapter related to determining the assignment of a contribution rate, or if aperson knowingly advises another person in a way that results in a violation of any of thosesubsections or provisions, the person is subject to the following penalties:
(i) (A) If the person is an employer, then the employer shall be assigned an overallcontribution rate of 5.4% for the rate year during which the violation or attempted violationoccurred and for the subsequent rate year.
(B) If the person's business is already at 5.4% for any year, or if the amount of increase inthe person's rate would be less than 2% for that year, then a penalty surcharge of contributions of2% of taxable wages shall be imposed for the rate year during which the violation or attemptedviolation occurred and for the subsequent rate year.
(ii) (A) If the person is not an employer, the person shall be subject to a civil penalty ofnot more than $5,000.
(B) The fine shall be deposited in the penalty and interest account established underSection 35A-4-506.
(b) (i) In addition to the penalty imposed by Subsection (5)(a), a violation of this sectionmay be prosecuted as unemployment insurance fraud.
(ii) The determination of the degree of an offense shall be measured by the total value ofall contributions avoided or reduced or contributions sought to be avoided or reduced by theunlawful conduct as applied to the degrees listed under Subsection 76-8-1301(2)(a).
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, thedivision shall make rules to identify the transfer or acquisition of a business for purposes of thissection.
(7) This section shall be interpreted and applied in a manner that meets the minimumrequirements contained in any guidance or regulations issued by the United States Department ofLabor.
Amended by Chapter 382, 2008 General Session
