Bill Text: IN SB0506 | 2013 | Regular Session | Enrolled
Bill Title: Unemployment insurance.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2013-05-13 - Public Law 33 [SB0506 Detail]
Download: Indiana-2013-SB0506-Enrolled.html
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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AN ACT to amend the Indiana Code concerning labor and safety.
Chapter 6.5. Professional Employer Organizations
Sec. 1. As used in this chapter, "client" has the meaning set forth in IC 27-16-2-3.
Sec. 2. As used in this chapter, "client level reporting method" has the meaning set forth in section 11(a) of this chapter.
Sec. 3. As used in this chapter, "covered employee" has the meaning set forth in IC 27-16-2-8.
Sec. 4. As used in this chapter, "professional employer agreement" has the meaning set forth in IC 27-16-2-12.
Sec. 5. As used in this chapter, "professional employer organization" or "PEO" has the meaning set forth in IC 27-16-2-13.
Sec. 6. As used in this chapter, "PEO level reporting method" has the meaning set forth in section 9(a) of this chapter.
Sec. 7. (a) For purposes of this article, a covered employee of a PEO is an employee of the PEO.
(b) A PEO is responsible for the payment of contributions, surcharges, penalties, and interest assessed under this article on wages paid by the PEO to the PEO's covered employees during the
term of the professional employer agreement.
Sec. 8. (a) A PEO shall use the client level reporting method to
report and pay all required contributions to the unemployment
compensation fund as required by IC 22-4-10, unless the PEO
elects the PEO level reporting method under section 9 of this
chapter.
(b) A PEO that initially elects the PEO level reporting method
under section 9 of this chapter may subsequently elect the client
level reporting method under section 11 of this chapter.
(c) A PEO using the client level reporting method may not
change its reporting method.
(d) Except as provided by IC 22-4-32-21(d), a PEO and its
related entities shall use the same reporting method for all clients.
Sec. 9. (a) A PEO may elect the PEO level reporting method,
which uses the state employer account number and contribution
rate of the PEO to report and pay all required contributions to the
unemployment compensation fund as required by IC 22-4-10.
(b) A PEO shall make the election required by subsection (a) not
later than the following:
(1) December 1, 2013, if the PEO is doing business in Indiana
on July 1, 2013.
(2) The first date the PEO is liable to make contributions
under this article for at least one (1) covered employee, if the
PEO begins doing business in Indiana after July 1, 2013.
(c) The election required by subsection (a) must be made in
writing on forms prescribed by the department.
(d) A PEO that does not make an election under this section
shall use the client level reporting method.
Sec. 10. (a) The following apply to a PEO that elects to use the
PEO level reporting method:
(1) The PEO shall file all quarterly contribution and wage
reports in accordance with IC 22-4-10-1.
(2) Whenever the PEO enters into a professional employer
agreement with a client, the PEO:
(A) shall notify the department not later than fifteen (15)
days after the end of the quarter in which the professional
employer agreement became effective; and
(B) is subject to IC 22-4-10-6 and IC 22-4-11.5, beginning
on the effective date of the professional employer
agreement.
(3) The PEO shall notify the department in writing on forms
prescribed by the department not later than fifteen (15) days
after the date of the following:
(A) The PEO and a client terminate a professional
employer agreement.
(B) The PEO elects the client level reporting method under
section 11 of this chapter.
After receiving a notice under this subdivision, the
department shall make any changes required by IC 22-4-10-6
and IC 22-4-11.5.
(b) Except as provided by IC 22-4-32-21(d), a PEO that elects to
use the PEO level reporting method is liable for all contributions,
interest, penalties, and surcharges until the effective date of an
election under section 11 of this chapter by the PEO to change to
the client level reporting method.
Sec. 11. (a) A PEO using the PEO level reporting method may
elect the client level reporting method, which uses the state
employer account number and contribution rate of the client to
report and pay all required contributions to the unemployment
compensation fund as required by IC 22-4-10.
(b) A PEO shall make an election under subsection (a) not later
than December 1 of the calendar year before the calendar year in
which the election is effective.
(c) An election under subsection (a) must be made in writing on
forms prescribed by the department.
(d) An election under subsection (a) is effective on January 1 of
the calendar year immediately following the year in which the
department receives the notice described in subsection (c).
Sec. 12. The following apply to a PEO that elects to use the client
level reporting method:
(1) Whenever the PEO enters into a professional employer
agreement with a client, the PEO shall notify the department
not later than fifteen (15) days after the end of the quarter in
which the professional employer agreement became effective.
(2) If a client is an employing unit on the date the professional
employer agreement becomes effective, the client retains its
experience balance, liabilities, and wage credits, and
IC 22-4-10-6 does not apply to the client.
(3) If a client is not an employing unit on the date the
professional employer agreement becomes effective, the client
immediately qualifies for an employer experience account
under IC 22-4-7-2(f) and is subject to IC 22-4-11-2(b)(2) for
purposes of establishing an initial contribution rate.
(4) A client is associated with the PEO's employer experience
account by means of the PEO's primary federal employer
identification number (FEIN) for purposes of liability under
this article and federal certification.
(5) Upon the termination of a professional employer
agreement between the PEO and a client:
(A) the client retains the experience balance, liabilities, and
wage credits for the client's employing unit account;
(B) the client's federal employer identification number
(FEIN) becomes the primary FEIN on the employing unit's
account; and
(C) the PEO's FEIN is not associated with the client's
employing unit account after the date:
(i) all outstanding reports are submitted; and
(ii) all outstanding liabilities are paid in full.
Sec. 13. (a) A client that transfers between PEOs is not subject
to IC 22-4-10-6 and IC 22-4-11.5 whenever:
(1) the PEOs are not commonly owned, managed, or
controlled; and
(2) both PEOs have elected to use the PEO level reporting
method.
(b) The client of a PEO that has elected to use the client level
reporting method may elect to become liable for payments in lieu
of contributions (as defined in IC 22-4-2-32) whenever:
(1) the client is otherwise eligible to make the election; and
(2) the requirements of IC 22-4-10-1 are met.
(b) Any employer subject to this article as successor to an employer pursuant to the provisions of IC 22-4-7-2(a) or IC 22-4-7-2(b) shall cease to be an employer at the end of the year in which the acquisition occurs only if the department finds that within such calendar year the employment experience of the predecessor prior to the date of disposition combined with the employment experience of the successor subsequent to the date of acquisition would not be sufficient to qualify the successor employer as an employer under the provisions of IC 22-4-7-1. No such successor employer may cease to be an employer subject to this article at the end of the first year of the current period of coverage of the predecessor employer. If all of the resources and liabilities of the experience account of an employer are assumed by another in accordance with the provisions of IC 22-4-10-6 or
IC 22-4-10-7, such employer's status as employer and under this article
is hereby terminated unless and until such employer subsequently
qualifies under the provisions of IC 22-4-7-1 or IC 22-4-7-2 or elects
to become an employer under sections 4 or 5 of this chapter.
(c) If no application for termination, as herein provided, is filed by
an employer and four (4) full calendar years have elapsed since any
contributions have become payable from such employer, then and in
such cases the department may terminate such employer's experience
account.
(1) an employing unit (whether or not an employing unit at the time of the acquisition) becomes an employer under IC 22-4-7-2(a);
(2) an employer acquires the organization, trade, or business, or substantially all the assets of another employer; or
(3) an employer transfers all or a portion of the employer's trade or business (including the employer's workforce) to another employer as described in IC 22-4-11.5-7;
the successor employer shall, in accordance with the rules prescribed by the department, assume the position of the predecessor with respect to all the resources and liabilities of the predecessor's experience account.
(b) Except as provided by IC 22-4-6.5 or IC 22-4-11.5, when:
(1) an employing unit (whether or not an employing unit at the time of the acquisition) becomes an employer under IC 22-4-7-2(b); or
(2) an employer acquires a distinct and segregable portion of the organization, trade, or business within this state of another employer;
the successor employer shall assume the position of the predecessor employer with respect to the portion of the resources and liabilities of the predecessor's experience account as pertains to the distinct and segregable portion of the predecessor's organization, trade, or business acquired by the successor. An application for the acquiring employer to assume this portion of the resources and liabilities of the disposing employer's experience account must be filed with the department on prescribed forms not later than thirty (30) days immediately following the disposition date or not later than ten (10) days after the disposing and acquiring employers are mailed or otherwise delivered final notice that the acquiring employer is a successor employer, whichever is the
earlier date. This portion of the resources and liabilities of the
disposing employer's experience account shall be transferred in
accordance with IC 22-4-11.5.
(c) Except as provided by IC 22-4-6.5 or IC 22-4-11.5, the
successor employer, if an employer prior to the acquisition, shall pay
at the rate of contribution originally assigned to it for the calendar year
in which the acquisition occurs, until the end of that year. If not an
employer prior to the acquisition, the successor employer shall pay the
rate of two and seven-tenths percent (2.7%) determined under
IC 22-4-11-2(b)(2), unless the successor employer assumes all or part
of the resources and liabilities of the predecessor employer's experience
account, in which event the successor employer shall pay at the rate of
contribution assigned to the predecessor employer for the period
starting with the first day of the calendar quarter in which the
acquisition occurs, until the end of that year. However, if a successor
employer, not an employer prior to the acquisition, simultaneously
acquires all or part of the experience balance of two (2) or more
employers, the successor employer shall pay at the highest rate
applicable to the experience accounts totally or partially acquired for
the period starting with the first day of the calendar quarter in which
the acquisition occurs, until the end of the year. If the successor
employer had any employment prior to the date of acquisition upon
which contributions were owed under IC 22-4-9-1, the employer's rate
of contribution from the first of the year to the first day of the calendar
quarter in which the acquisition occurred would be two and
seven-tenths percent (2.7%). determined under IC 22-4-11-2(b)(2).
(b) The payments of benefits to an individual shall not in any case be denied or withheld because the experience account of an employer does not reflect a balance and total of contributions paid to be in excess of benefits charged to such experience account.
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 21. (a) Any individual,
group of individuals, or other legal entity, whether or not an employing
unit which acquires all or part of the organization, trade, or business
within this state of an employer or which acquires all or part of the
assets of such organization, trade or business, shall notify the
commissioner in writing by registered mail not later than five (5) days
prior to the acquisition.
(b) Unless such notice is given, the commissioner shall have the
right to proceed against either the predecessor or successor, in
personam or in rem, for the collection of contributions and interest due
or accrued and unpaid by the predecessor, as of the date of such
acquisition, and the amount of such liability shall, in addition, be a lien
against the property or assets so acquired which shall be prior to all
other liens. However, the lien shall not be valid as against one who
acquires from the successor any interest in the property or assets in
good faith, for value and without notice of the lien.
(c) On written request after the acquisition is completed, the
commissioner shall furnish the successor with a written statement of
the amount of contributions and interest due or accrued and unpaid by
the predecessor as of the date of such acquisition, and the liability of
the successor and the amount of the lien shall in no event exceed the
reasonable value of the property or assets acquired by the successor
from the predecessor or the amount disclosed by such statement,
whichever is the lesser.
(d) An acquirer described in subsection (a) or a professional
employer organization under IC 22-4-6.5 may file a request for
clearance in the manner prescribed by the department at least five
(5) business days before an acquisition or transfer. After filing a
request, the acquirer or professional employer organization is
entitled to receive a statement indicating whether an account being
acquired or transferred is in good standing with the department as
of the date of the transfer. If the statement shows that the account
that is being acquired or transferred is in good standing with the
department at the time of the transfer, and the department later
discovers an outstanding liability associated with the acquired or
transferred account, the department:
(1) may not assess a delinquent employer rate modification
under IC 22-4-11-2 based on the account for which a
statement was made under this subsection; and
(2) in the case of a PEO, shall administratively separate the
acquired or transferred client account from the PEO until the
liability is recovered.
(b) This SECTION expires July 1, 2014.
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