Bill Text: MI SB1019 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: Employment security; contribution rate; client employers of a professional employer organization; clarify lookback period length. Amends sec. 13m of 1936 (Ex Sess) PA 1 (MCL 421.13m).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2014-07-16 - Referred To Committee On Reforms, Restructuring And Reinventing [SB1019 Detail]

Download: Michigan-2013-SB1019-Introduced.html

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SENATE BILL No. 1019

 

 

July 16, 2014, Introduced by Senator BRANDENBURG and referred to the Committee on Reforms, Restructuring and Reinventing.

 

 

 

     A bill to amend 1936 (Ex Sess) PA 1, entitled

 

"Michigan employment security act,"

 

by amending section 13m (MCL 421.13m), as amended by 2012 PA 219.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 13m. (1) A professional employer organization that has

 

not previously filed shall file a report with the agency in

 

accordance with R 421.121 and R 421.190 of the Michigan

 

administrative code for a determination of its status as a liable

 

employing unit and employer under this act. A PEO determined to be

 

a liable employer shall complete an electronic employer

 

registration in the manner approved by the agency to register its

 

employer liability.

 

     (2) Except as provided in subdivision (b), a PEO that is a

 

liable employer shall use the following method for reporting wages

 

and paying unemployment contributions under this act:

 

     (a) The PEO shall comply with all requirements of this act

 

that apply to a contributing employer. The PEO shall file a single

 

quarterly wage report and unemployment contribution report and pay

 

contributions of its client employers based on the account

 

information of each client employer. The unemployment agency shall

 

convert a reimbursing employer to a contributing employer beginning

 

with the calendar quarter in which the employer becomes a client

 

employer of a PEO. The PEO shall file reports required under R

 

421.121 of the Michigan administrative code and make contribution

 

payments by electronic reporting and payment methods approved by

 

the agency. The PEO shall notify the agency within 30 days after

 

any employer becomes its client employer and within 30 days after

 

any client employer discontinues its association with the PEO. All

 

of the following apply to a rate calculation for client employers

 

of the PEO:

 

     (i) For a client employer that is a contributing employer and

 

was a client employer of the a PEO on the date that the PEO changed

 

to the reporting method provided in this subdivision,on or before

 

January 1, 2014, the following rates apply:

 

     (A) Except as provided in sub-subparagraphs (B) and (C), ifIf

 

the client employer reported no employees or no payroll to the

 

agency for 8 or more calendar quarters or, beginning January 1,

 

2014, for 12 or more calendar quarters,did not report any payroll

 

under its unemployment account number or reported payroll with zero

 

dollars under its unemployment account number to the agency for the

 

8 calendar quarters ending December 31, 2013, the client employer's

 

unemployment tax rate for 2014 will be the new employer tax rate

 

and any prior unemployment tax rate for the client employer will

 

not be resumed.

 

     (B) If the client employer was a client employer of the PEO

 

for less than 8 calendar quarters or, beginning January 1, 2014,

 

for less than 12 calendar quarters, the client employer's

 

unemployment tax rate will be based on the client employer's prior

 

account and experience.

 

     (B)(C) If the client employer's account has been terminated

 

for more than 1 year or if the client employer never previously

 

registered with the agency, the client shall be separately

 

registered using a method approved by the agency within 30 days

 

after the employer becomes a client employer of the PEO. The client

 

employer shall be assigned the new employer unemployment tax rate.

 

     (C) If the client employer does not qualify for the new

 

employer rate under subparagraph (A) or (B), the client employer's

 

unemployment tax rate for 2014 shall be as provided in section 19.

 

     (ii) A business entity that is a contributing An employer and

 

that becomes a client employer of the PEO on or after January 1,

 

2014 shall initially retain its existing unemployment tax rate or

 

establish a new rate as provided in section 19.

 

     (b) A PEO that is a liable employer and that was operating in

 

this state before January 1, 2011 may elect and use the reporting

 

method in subdivision (a) before January 1, 2014, but shall report

 

using the method in subdivision (a) on and after January 1, 2014.

 

     (3) A PEO that is a liable employer is the employer for

 

purposes of claims management and hearings under this act on behalf

 

of the client employer.

 

     (4) A PEO that reports under subsection (2)(a) shall confirm

 

the mailing address of the client employer, which may be stated as

 

that of the PEO or of the client employer. The PEO shall disclose

 

the business address of the client employer, which shall be the

 

physical address of the client employer, to the agency.

 

     (5) Either the PEO that reports under subsection (2)(a) or the

 

PEO's client employers, but not both, shall file a quarterly wage

 

detail report electronically, and shall file a quarterly

 

contribution payment in a manner approved by the agency. If a

 

client entity of a PEO leases some of its employees from the PEO

 

but retains the remainder of its employees, the leased employees

 

shall be reported by the PEO under the client entity's unemployment

 

insurance agency account number and the retained employees shall be

 

reported by the client entity under an agency-assigned subaccount

 

number of the client entity's account number.

 

     (6) The agency shall issue a FUTA certification in accordance

 

with the internal revenue code of 1986, 26 USC 1 to 9834, and

 

regulations, rulings, instructions, and directives of the internal

 

revenue service.

 

     (7) The requirements of this section do not preclude the

 

agency from enforcing any provision of this act based on any act or

 

omission by a PEO that occurred before January 1, 2011.

 

     (8) As used in this section, "professional employer

 

organization" or "PEO" means that term as defined in R

 

421.190(1)(d) of the Michigan administrative code.

 

     Enacting section 1. This amendatory act is curative and shall

 

be applied retroactively. The amendatory act expresses the original

 

intent of the legislature as to the method for calculating the

 

unemployment tax rate for a client employer of a PEO for the 2014

 

tax year.