Bill Text: MN HF2582 | 2011-2012 | 87th Legislature | Engrossed

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Bill Title: Unemployment insurance federal conformity, policy, and other housekeeping changes made.

Sponsorship: Bipartisan Bill

Status: (Introduced - Dead) 2012-04-04 - HF indefinitely postponed [HF2582 Detail]

Download: Minnesota-2011-HF2582-Engrossed.html

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A bill for an act

relating to unemployment insurance; making federal conformity, policy, and
other housekeeping changes;amending Minnesota Statutes 2010, sections
268.035, subdivision 12d; 268.042, subdivision 1; 268.044, subdivision
1; 268.046, subdivision 3; 268.047, subdivision 4; 268.051, subdivision 4;
268.069, subdivision 2; 268.085, subdivisions 5, 11, 15; 268.095, subdivision 6;
268.103, subdivision 1; 268.18, subdivisions 2, 2b, 4, 4a; 268.192, by adding
a subdivision; 268.194, subdivision 1; Minnesota Statutes 2011 Supplement,
sections 268.035, subdivision 20; 268.051, subdivision 5; 268.07, subdivision
2; 268.115, subdivision 1; 268.184, subdivisions 1, 1a; repealing Minnesota
Rules, part 3315.0555, subparts 2, 3, 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

FEDERAL CONFORMITY

    Section 1. Minnesota Statutes 2010, section 268.047, subdivision 4, is amended to read:
    Subd. 4. Limitation on exceptions. (a) Regardless of subdivisions 2 and 3, an
exception under those subdivisions will be limited in accordance with according to section
268.101, subdivision 2 , paragraph (b).
(b) Regardless of subdivision 2, clause (8), an exception under that clause does
not apply if the overpaid unemployment benefits resulted because the employer or any
employee, officer, or agent of the employer:
(1) failed to respond timely or adequately to a request for information under section
268.101, subdivision 1, paragraph (b); and
(2) has established a pattern of failing to respond timely or adequately to requests for
information under section 268.101, subdivision 1, paragraph (b).
The employer must pay the trust fund the amount of the overpaid unemployment
benefits that will be used in computing the future tax rate of taxpaying employers or
charged to the reimbursable account of a nonprofit or government employer under
subdivision 1. The procedure for required payment is under section 268.184, subdivision 1.
This paragraph is enacted to conform to the requirements of Public Law 112-40,
section 252. A "pattern" for purposes of this paragraph is a prior failure to respond to the
greater of two requests for information, or two percent of all requests for information in
the most recent six months.
EFFECTIVE DATE.This section is effective for determinations issued on or
after July 1, 2013.

    Sec. 2. Minnesota Statutes 2010, section 268.18, subdivision 2, is amended to read:
    Subd. 2. Overpayment because of fraud. (a) Any applicant who receives
unemployment benefits by knowingly misrepresenting, misstating, or failing to disclose
any material fact, or who makes a false statement or representation without a good faith
belief as to the correctness of the statement or representation, has committed fraud. After
the discovery of facts indicating fraud, the commissioner must make a determination
that the applicant obtained unemployment benefits by fraud and that the applicant must
promptly repay the unemployment benefits to the trust fund. In addition, the commissioner
must assess a penalty equal to 40 percent of the amount fraudulently obtained. This
penalty is in addition to penalties under section 268.182. The determination is effective
the Sunday of the week that it was issued.
    (b) Unless the applicant files an appeal within 20 calendar days after the sending
of the determination of overpayment by fraud to the applicant by mail or electronic
transmission, the determination is final. Proceedings on the appeal are conducted in
accordance with section 268.105.
    (c) If the applicant fails to repay the unemployment benefits, penalty, and interest
assessed, the total due may be collected by the methods allowed under state and federal
law. A determination of overpayment by fraud must state the methods of collection the
commissioner may use to recover the overpayment. Money received in repayment of
fraudulently obtained unemployment benefits, penalties, and interest is first applied to the
unemployment benefits overpaid, then to the penalty amount due, then to any interest due.
62.5 percent of the payments made toward the penalty are credited to the contingent
account and 37.5 percent credited to the administration account trust fund.
    (d) If an applicant has been overpaid unemployment benefits under the law of
another state because of fraud and that state certifies that the applicant is liable to repay
the unemployment benefits and requests the commissioner to recover the overpayment,
the commissioner may offset from future unemployment benefits otherwise payable the
amount of overpayment.
    (e) Regardless of the limitations in section 268.101, subdivision 2, paragraph
(e), unemployment benefits paid for weeks more than four years before the date of a
determination of overpayment by fraud issued under this subdivision are not considered
overpaid unemployment benefits.
EFFECTIVE DATE.The amendments to paragraph (c) are effective for any
money credited on or after July 1, 2013. The amendments to paragraph (e) are effective
July 1, 2012.

    Sec. 3. Minnesota Statutes 2011 Supplement, section 268.184, subdivision 1, is
amended to read:
    Subdivision 1. Administrative penalties. (a) The commissioner must penalize
an employer if that employer or any employee, officer, or agent of that employer, is
in collusion with any applicant for the purpose of assisting the applicant to receive
unemployment benefits fraudulently. The penalty is $500 or the amount of unemployment
benefits determined to be overpaid, whichever is greater.
    (b) The commissioner must penalize an employer if that employer or any employee,
officer, or agent of that employer (1) made a false statement or representation knowing it
to be false, (2) made a false statement or representation without a good faith belief as to
correctness of the statement or representation, (3) knowingly failed to disclose a material
fact, or (4) made an offer of employment to an applicant when, in fact, the employer had
no employment available, but only if the employer's action:.
    (i) was taken to prevent or reduce the payment of unemployment benefits to any
applicant;
    (ii) was taken to reduce or avoid any payment required from an employer under
this chapter or section 116L.20; or
    (iii) caused an overpayment of unemployment benefits to an applicant.
The penalty is the greater of $500, or 50 percent of the overpaid or reduced unemployment
benefits or payment required, whichever is greater. following resulting from the
employer's action:
(i) the amount of any overpaid unemployment benefits to an applicant;
(ii) the amount of unemployment benefits not paid to an applicant that would
otherwise have been paid; or
(iii) the amount of any payment required from the employer under this chapter or
section 116L.20 that was not paid.
    (c) The commissioner must penalize an employer if that employer failed or refused
to honor a subpoena issued under section 268.105, subdivision 4, or section 268.188. The
penalty is $500 and any costs of enforcing the subpoena, including attorney fees.
    (d) Penalties under this subdivision and under section 268.047, subdivision 4,
paragraph (b), are in addition to any other penalties and subject to the same collection
procedures that apply to past due taxes. Penalties must be paid within 30 calendar days
of assessment issuance of the determination of penalty and credited to the contingent
account trust fund.
    (e) The determination of the penalty is final unless the employer files an appeal
within 20 calendar days after the sending of the determination of the penalty to the
employer by mail or electronic transmission. Proceedings on the appeal are conducted in
accordance with section 268.105.
EFFECTIVE DATE.This section is effective July 1, 2012, except the amendments
to paragraph (d) are effective for penalties imposed on or after July 1, 2013.

ARTICLE 2

POLICY

    Section 1. Minnesota Statutes 2010, section 268.046, subdivision 3, is amended to read:
    Subd. 3. Penalties; application. (a) Any person that violates the requirements
of this section and any taxpaying employer that violates subdivision 1, paragraph (b),
or any nonprofit or government employer that violates subdivision 2, paragraph (b), is
subject to the penalties under section 268.184, subdivision 1a. Penalties are credited to
the administration account to be used to ensure integrity in the unemployment insurance
program trust fund.
    (b) Section 268.051, subdivision 4, does not apply to contracts under this section.
This section does not limit or prevent the application of section 268.051, subdivision 4, to
any other transactions or acquisitions involving the taxpaying employer. This section does
not limit or prevent the application of section 268.051, subdivision 4a.
    (c) An assignment of an account upon the execution of a contract under this section
and a termination of a contract with the corresponding assignment of the account is not
considered a separation from employment of any worker covered by the contract. Nothing
under this subdivision causes the person to be liable for any amounts past due under this
chapter from the taxpaying employer or the nonprofit or government employer.
    (d) This section applies to, but is not limited to, persons registered under section
79.255 , but does not apply to persons that obtain an exemption from registration under
section 79.255, subdivision 9.
EFFECTIVE DATE.This section is effective July 1, 2013.

    Sec. 2. Minnesota Statutes 2010, section 268.051, subdivision 4, is amended to read:
    Subd. 4. Experience rating history transfer. (a) The experience rating history of
the predecessor employer is transferred to the successor employer when:
    (1) a taxpaying employer acquires all of the organization, trade or business, or
workforce of another taxpaying employer; and
    (2) there is 25 percent or more common ownership or there is substantially common
management or control between the predecessor and successor, the experience rating
history of the predecessor employer is transferred to the successor employer.
    (b) A portion of the experience rating history of the predecessor employer is
transferred to the successor employer when:
    (1) a taxpaying employer acquires a portion, but less than all, of the organization,
trade or business, or workforce of another taxpaying employer; and
    (2) there is 25 percent or more common ownership or there is substantially common
management or control between the predecessor and successor, the successor employer
acquires, as of the date of acquisition, the experience rating history attributable to the
portion it acquired, and the predecessor employer retains the experience rating history
attributable to the portion that it has retained. If the commissioner determines that
sufficient information is not available to substantiate that a distinct severable portion
was acquired and to assign the appropriate distinct severable portion of the experience
rating history, the commissioner must assign the successor employer that percentage
of the predecessor employer's experience rating history equal to that percentage of
the employment positions it has obtained, and the predecessor employer retains that
percentage of the experience rating history equal to the percentage of the employment
positions it has retained.
    (c) The term "common ownership" for purposes of this subdivision includes
ownership by a spouse, parent, grandparent, child, grandchild, brother, sister, aunt, uncle,
niece, nephew, or first cousin, by birth or by marriage.
    (d) Each successor employer that is subject to paragraph (a) or (b) must notify the
commissioner of the acquisition by electronic transmission, in a format prescribed by the
commissioner, within 30 calendar days of the date of acquisition. Any successor employer
that fails to notify the commissioner is subject to the penalties under section 268.184,
subdivision 1a , if the successor's assigned tax rate under subdivision 2 or 5 was lower than
the predecessor's assigned tax rate at the time of the acquisition. Payments made toward
the penalties are credited to the administration account to be used to ensure integrity in the
unemployment insurance program trust fund.
    (e) If the successor employer under paragraphs (a) and (b) had an experience rating
at the time of the acquisition, the transferred experience rating history of the predecessor
is combined with the successor's experience rating history for purposes of recomputing
a tax rate.
    (f) If there has been a transfer of an experience rating history under paragraph (a) or
(b), employment with a predecessor employer is not considered to have been terminated if
similar employment is offered by the successor employer and accepted by the employee.
    (g) The commissioner, upon notification of an employer, or upon the commissioner's
own motion if the employer fails to provide the required notification, must determine if an
employer is a successor within the meaning of this subdivision. The commissioner must,
after determining the issue of succession or nonsuccession, recompute the tax rate under
subdivision 6 of all employers affected. The commissioner must send the recomputed tax
rate to all affected employers by mail or electronic transmission. Any affected employer
may appeal the recomputed tax rate in accordance with the procedures in subdivision 6,
paragraph (c).
    (h) The "experience rating history" for purposes of this subdivision and subdivision
4a means the amount of unemployment benefits paid and the taxable wages that are being
used and would be used in computing the current and any future experience rating.
    For purposes of this chapter, an "acquisition" means anything that results in the
obtaining by the successor employer, in any way or manner, of the organization, trade or
business, or workforce of the predecessor employer.
    A "distinct severable portion" in paragraph (b) means a location or unit separately
identifiable within the employer's wage detail report under section 268.044.
    (i) Regardless of the ownership, management, or control requirements of paragraph
(a), if there is an acquisition or merger of a publicly held corporation by or with another
publicly held corporation the experience rating histories of the corporations are combined
as of the date of acquisition or merger for the purpose of recomputing a tax rate.
EFFECTIVE DATE.This section is effective July 1, 2012, except that the
amendments to paragraph (d) are effective July 1, 2013.

    Sec. 3. Minnesota Statutes 2011 Supplement, section 268.051, subdivision 5, is
amended to read:
    Subd. 5. Tax rate for new employers. (a) Each new taxpaying employer that does
not qualify for an experience rating under subdivision 3, except new employers in a high
experience rating industry, must be assigned, for a calendar year, a tax rate the higher of
(1) one percent, or (2) the tax rate computed, to the nearest 1/100 of a percent, by dividing
the total amount of unemployment benefits paid all applicants during the 48 calendar
months ending on June 30 of the prior calendar year by the total taxable wages of all
taxpaying employers during the same period, plus the applicable base tax rate and any
additional assessments under subdivision 2, paragraph (c).
    (b) Each new taxpaying employer in a high experience rating industry that does not
qualify for an experience rating under subdivision 3, must be assigned, for a calendar year,
a tax rate the higher of (1) that assigned under paragraph (a), or (2) the tax rate, computed
to the nearest 1/100 of a percent, by dividing the total amount of unemployment benefits
paid to all applicants from high experience rating industry employers during the 48
calendar months ending on June 30 of the prior calendar year by the total taxable wages
of all high experience rating industry employers during the same period, to a maximum
provided for under subdivision 3, paragraph (b), plus the applicable base tax rate and any
additional assessments under subdivision 2, paragraph (c).
    (c) An employer is considered to be in a high experience rating industry if:
    (1) the employer is engaged in residential, commercial, or industrial construction,
including general contractors;
    (2) the employer is engaged in sand, gravel, or limestone mining;
    (3) the employer is engaged in the manufacturing of concrete, concrete products,
or asphalt; or
    (4) the employer is engaged in road building, repair, or resurfacing, including bridge
and tunnels and residential and commercial driveways and parking lots.
(d) Regardless of any law to the contrary, a taxpaying employer must be assigned a
tax rate under this subdivision if:
(1) the employer registers for a tax account under section 268.042 and for each of
the five calendar quarters after registering files a "no wages paid" report on wage detail
under section 268.044; or
(2) the employer has filed 14 consecutive quarterly "no wages paid" reports on
wage detail under section 268.044.
    (d) (e) The commissioner must send to the new employer, by mail or electronic
transmission, a determination of tax rate assigned. An employer may appeal the
determination of a tax rate in accordance with the procedures in subdivision 6, paragraph
(c).
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 4. Minnesota Statutes 2010, section 268.085, subdivision 5, is amended to read:
    Subd. 5. Deductible earnings. (a) If the applicant has earnings, including holiday
pay, with respect to any week, from employment, covered employment, noncovered
employment, self-employment, or volunteer work, equal to or in excess of the applicant's
weekly unemployment benefit amount, the applicant is ineligible for unemployment
benefits for that week.
    (b) If the applicant has earnings, with respect to any week, that is less than
the applicant's weekly unemployment benefit amount, from employment, covered
employment, noncovered employment, self-employment, or volunteer work, 55 50 percent
of the earnings are deducted from the weekly unemployment benefit amount.
    (c) No deduction is made from an applicant's weekly unemployment benefit amount
for earnings from service in the National Guard or a United States military reserve unit or
from direct service as a volunteer firefighter or volunteer ambulance service personnel.
This exception to paragraphs (a) and (b) does not apply to on-call or standby pay provided
to a volunteer firefighter or volunteer ambulance service personnel. No deduction is made
for jury duty pay or for pay as an election judge.
    (d) The applicant may report deductible earnings on continued requests for
unemployment benefits at the next lower whole dollar amount.
    (e) Deductible earnings does not include any money considered a deductible
payment under subdivision 3, but includes all compensation considered wages under
section 268.035, subdivision 29, and any other compensation considered earned income
under state and federal law for income tax purposes.
EFFECTIVE DATE.This section is effective for deductions occurring on or after
July 1, 2013.

    Sec. 5. Minnesota Statutes 2010, section 268.18, subdivision 2b, is amended to read:
    Subd. 2b. Interest. (a) On any unemployment benefits fraudulently obtained, and
any penalty amounts assessed under subdivision 2, the commissioner must assess interest
at the rate of 1-1/2 percent per month on any amount that remains unpaid beginning
30 calendar days after the date of the determination of overpayment by fraud. A
determination of overpayment by fraud must state that interest will be assessed.
    (b) If the determination did not state that interest will be assessed, interest is assessed
beginning 30 calendar days after notification, by mail or electronic transmission, to the
applicant that interest is now assessed.
    (c) Interest payments under this section are credited to the administration account
trust fund.
EFFECTIVE DATE.This section is effective for payments received on or after
July 1, 2013.

    Sec. 6. Minnesota Statutes 2010, section 268.18, subdivision 4, is amended to read:
    Subd. 4. Cancellation of overpayments. (a) If unemployment benefits overpaid
under subdivision 1 are not repaid or offset from subsequent unemployment benefits
as provided for in subdivision 1 within six years after the date of the determination or
decision holding the applicant overpaid, the commissioner must cancel the overpayment
balance, and no administrative or legal proceedings may be used to enforce collection
of those amounts.
    (b) If unemployment benefits determined overpaid under subdivision 2 including
penalties and interest are not repaid within 15 ten years after the date of the determination
of overpayment by fraud, the commissioner must cancel the overpayment balance and
any penalties and interest due, and no administrative or legal proceeding may be used to
enforce collection of those amounts.
    (c) The commissioner may cancel at any time any overpayment, including penalties
and interest, that the commissioner determines is uncollectible because of death or
bankruptcy.
EFFECTIVE DATE.This section is effective July 1, 2012, and applies retroactively
to all existing overpayments.

    Sec. 7. Minnesota Statutes 2010, section 268.192, is amended by adding a subdivision
to read:
    Subd. 1a. Agreements not allowed. An employer may not make an agreement that
in exchange for the employer agreeing not to contest the payment of unemployment
benefits, including agreeing not to provide information to the department, an employee
will:
(1) quit the employment;
(2) take a leave of absence;
(3) leave the employment temporarily or permanently; or
(4) withdraw a grievance or appeal of a termination.
An agreement that violates this subdivision has no effect under this chapter.
EFFECTIVE DATE.This section is effective July 1, 2012.

ARTICLE 3

HOUSEKEEPING

    Section 1. Minnesota Statutes 2010, section 268.035, subdivision 12d, is amended to
read:
    Subd. 12d. Electronic transmission. "Electronic transmission" means
a communication that is sent by electronic, digital, magnetic, wireless, optical,
electromagnetic or similar capabilities, and, when permitted by the commissioner, a
telephone communication online, by telephone, or by facsimile transmission.

    Sec. 2. Minnesota Statutes 2011 Supplement, section 268.035, subdivision 20, is
amended to read:
    Subd. 20. Noncovered employment. "Noncovered employment" means:
    (1) employment for the United States government or an instrumentality thereof,
including military service;
    (2) employment for a state, other than Minnesota, or a political subdivision or
instrumentality thereof;
    (3) employment for a foreign government;
    (4) employment for an instrumentality wholly owned by a foreign government,
if the employment is of a character similar to that performed in foreign countries by
employees of the United States government or an instrumentality thereof and the United
States Secretary of State has certified that the foreign government grants an equivalent
exemption to similar employment performed in the foreign country by employees of the
United States government and instrumentalities thereof;
    (5) employment covered under United States Code, title 45, section 351, the
Railroad Unemployment Insurance Act;
    (6) employment covered by a reciprocal arrangement between the commissioner and
another state or the federal government that provides that all employment performed by an
individual for an employer during the period covered by the reciprocal arrangement is
considered performed entirely within another state;
    (7) employment for a church or convention or association of churches, or an
organization operated primarily for religious purposes that is operated, supervised,
controlled, or principally supported by a church or convention or association of churches
described in United States Code, title 26, section 501(c)(3) of the federal Internal Revenue
Code and exempt from income tax under section 501(a);
    (8) employment of a duly ordained or licensed minister of a church in the exercise of
a ministry or by a member of a religious order in the exercise of duties required by the
order, for Minnesota or a political subdivision or an organization described in United
States Code, title 26, section 501(c)(3) of the federal Internal Revenue Code and exempt
from income tax under section 501(a);
    (9) employment of an individual receiving rehabilitation of "sheltered" work in
a facility conducted for the purpose of carrying out a program of rehabilitation for
individuals whose earning capacity is impaired by age or physical or mental deficiency
or injury or a program providing "sheltered" work for individuals who because of an
impaired physical or mental capacity cannot be readily absorbed in the competitive labor
market. This clause applies only to services performed for Minnesota or a political
subdivision or an organization described in United States Code, title 26, section 501(c)(3)
of the federal Internal Revenue Code and exempt from income tax under section 501(a)
in a facility certified by the Rehabilitation Services Branch of the department or in a day
training or habilitation program licensed by the Department of Human Services;
    (10) employment of an individual receiving work relief or work training as part of
an unemployment work relief or work training program assisted or financed in whole or
in part by any federal agency or an agency of a state or political subdivision thereof.
This clause applies only to employment for Minnesota or a political subdivision or an
organization described in United States Code, title 26, section 501(c)(3) of the federal
Internal Revenue Code and exempt from income tax under section 501(a). This clause does
not apply to programs that require unemployment benefit coverage for the participants;
    (11) employment for Minnesota or a political subdivision as an elected official, a
member of a legislative body, or a member of the judiciary;
    (12) employment as a member of the Minnesota National Guard or Air National
Guard;
    (13) employment for Minnesota, a political subdivision, or instrumentality thereof,
as an employee serving only on a temporary basis in case of fire, flood, tornado, or
similar emergency;
    (14) employment as an election official or election worker for Minnesota or a
political subdivision, but only if the compensation for that employment was less than
$1,000 in a calendar year;
    (15) employment for Minnesota that is a major policy-making or advisory position
in the unclassified service, including those positions established under section 43A.08,
subdivision 1a ;
(16) employment for Minnesota in an unclassified position established under section
43A.08, subdivision 1a;
    (16) (17) employment for a political subdivision of Minnesota that is a nontenured
major policy making or advisory position;
    (17) (18) domestic employment in a private household, local college club, or local
chapter of a college fraternity or sorority performed for a person, only if the wages paid
in any calendar quarter in either the current or prior calendar year to all individuals in
domestic employment totaled less than $1,000.
    "Domestic employment" includes all service in the operation and maintenance of a
private household, for a local college club, or local chapter of a college fraternity or
sorority as distinguished from service as an employee in the pursuit of an employer's
trade or business;
    (18) (19) employment of an individual by a son, daughter, or spouse, and
employment of a child under the age of 18 by the child's father or mother;
    (19) (20) employment for a personal care assistance provider agency by of an
individual who provides direct care to an immediate family member of a recipient who
provides the direct care to the recipient funded through the personal care assistance
program under section 256B.0659;
(20) (21) employment of an inmate of a custodial or penal institution;
    (21) (22) employment for a school, college, or university by a student who is
enrolled and whose primary relation to the school, college, or university is as a student.
This does not include an individual whose primary relation to the school, college, or
university is as an employee who also takes courses;
    (22) (23) employment of an individual who is enrolled as a student in a full-time
program at a nonprofit or public educational institution that maintains a regular faculty
and curriculum and has a regularly organized body of students in attendance at the place
where its educational activities are carried on, taken for credit at the institution, that
combines academic instruction with work experience, if the employment is an integral
part of the program, and the institution has so certified to the employer, except that this
clause does not apply to employment in a program established for or on behalf of an
employer or group of employers;
    (23) (24) employment of university, college, or professional school students in an
internship or other training program with the city of St. Paul or the city of Minneapolis
under Laws 1990, chapter 570, article 6, section 3;
    (24) (25) employment for a hospital by a patient of the hospital. "Hospital" means
an institution that has been licensed by the Department of Health as a hospital;
    (25) (26) employment as a student nurse for a hospital or a nurses' training school by
an individual who is enrolled and is regularly attending classes in an accredited nurses'
training school;
    (26) (27) employment as an intern for a hospital by an individual who has completed
a four-year course in an accredited medical school;
    (27) (28) employment as an insurance salesperson, by other than a corporate
officer, if all the wages from the employment is solely by way of commission. The word
"insurance" includes an annuity and an optional annuity;
    (28) (29) employment as an officer of a township mutual insurance company or
farmer's mutual insurance company operating under chapter 67A;
    (29) (30) employment of a corporate officer, if the officer directly or indirectly,
including through a subsidiary or holding company, owns 25 percent or more of the
employer corporation, and employment of a member of a limited liability company, if the
member directly or indirectly, including through a subsidiary or holding company, owns
25 percent or more of the employer limited liability company;
    (30) (31) employment as a real estate salesperson, by other than a corporate officer,
if all the wages from the employment is solely by way of commission;
    (31) (32) employment as a direct seller as defined in United States Code, title 26,
section 3508;
    (32) (33) employment of an individual under the age of 18 in the delivery or
distribution of newspapers or shopping news, not including delivery or distribution to any
point for subsequent delivery or distribution;
    (33) (34) casual employment performed for an individual, other than domestic
employment under clause (17) (18), that does not promote or advance that employer's
trade or business;
    (34) (35) employment in "agricultural employment" unless considered "covered
agricultural employment" under subdivision 11; or
    (35) (36) if employment during one-half or more of any pay period was covered
employment, all the employment for the pay period is considered covered employment;
but if during more than one-half of any pay period the employment was noncovered
employment, then all of the employment for the pay period is considered noncovered
employment. "Pay period" means a period of not more than a calendar month for which a
payment or compensation is ordinarily made to the employee by the employer.

    Sec. 3. Minnesota Statutes 2010, section 268.042, subdivision 1, is amended to read:
    Subdivision 1. Employer registration. (a) Each employer must, upon or before
the submission of its first wage detail report under section 268.044, register with the
commissioner for a tax account or a reimbursable account, by electronic transmission
in a format prescribed by the commissioner. The employer must provide all required
information for registration, including the actual physical street and city address of the
employer.
    (b) Within 30 calendar days, each employer must notify the commissioner by
electronic transmission, in a format prescribed, of a change in legal entity, of the
transfer, sale, or acquisition of a business conducted in Minnesota, in whole or in part,
if the transaction results in the creation of a new or different employer or affects the
establishment of employer accounts, the assignment of tax rates, or the transfer of
experience rating history.
    (c) Except as provided in subdivision 3, any person that is or becomes an employer
subject to the Minnesota Unemployment Insurance Law because of the application of
section 268.035, subdivision 20, clause (14), (17), or (34), within any calendar year is
considered to be subject to this chapter the entire calendar year.
    (d) Within 30 calendar days of the termination of business, an employer that has
been assigned a tax account or reimbursable account must notify the commissioner by
electronic transmission, in a format prescribed by the commissioner, if that the employer
no longer has employees and does not intend or expect to pay wages to any employees in
covered employment during the current or the next calendar year and into the foreseeable
future. Upon notification, the employer is no longer required to file wage detail reports
under section 268.044, subdivision 1, paragraph (d), and the employer's account must
be terminated.
    (e) An employer that has its account terminated business regains its previous tax
account under section 268.045, with the experience rating history of that account, if the
employer again commences business and again pays wages in covered employment if:
    (1) less than 14 calendar quarters have elapsed in which no wages were paid for
covered employment;
    (2) the experience rating history regained contains taxable wages; and
    (3) the experience rating history has not been transferred to a successor under
section 268.051, subdivision 4.

    Sec. 4. Minnesota Statutes 2010, section 268.044, subdivision 1, is amended to read:
    Subdivision 1. Wage detail report. (a) Each employer must submit, under the
account provided for in section 268.045 or 268.046, a quarterly wage detail report
by electronic transmission, in a format prescribed by the commissioner. The report
must include for each employee in covered employment during the calendar quarter,
the employee's name, Social Security number, the total wages paid to the employee,
and total number of paid hours worked. For employees exempt from the definition of
employee in section 177.23, subdivision 7, clause (6), the employer must report 40 hours
worked for each week any duties were performed by a full-time employee and must
report a reasonable estimate of the hours worked for each week duties were performed
by a part-time employee. In addition, the wage detail report must include the number of
employees employed during the payroll period that includes the 12th day of each calendar
month and, if required by the commissioner, the report must be broken down by business
location and, if section 268.046, subdivision 1, paragraph (b), or subdivision 2, paragraph
(b), applies, by separate unit. The report is due and must be received by the commissioner
on or before the last day of the month following the end of the calendar quarter. The
commissioner may delay the due date on a specific calendar quarter in the event the
department is unable to accept wage detail reports electronically.
    (b) The employer may report the wages paid to the next lower whole dollar amount.
    (c) An employer need not include the name of the employee or other required
information on the wage detail report if disclosure is specifically exempted from being
reported by federal law.
    (d) A wage detail report must be submitted for each calendar quarter even though
no wages were paid, unless the employer has notified the commissioner, under section
268.042, subdivision 1 , paragraph (c), of termination of business.

    Sec. 5. Minnesota Statutes 2010, section 268.069, subdivision 2, is amended to read:
    Subd. 2. Unemployment benefits paid from state funds. Unemployment benefits
are paid from state funds and are not considered paid from any special insurance plan,
nor as paid by an employer. An application for unemployment benefits is not considered
a claim against an employer but is considered a request for unemployment benefits
from the trust fund. The commissioner has the responsibility for the proper payment of
unemployment benefits regardless of the level of interest or participation by an applicant or
an employer in any determination or appeal. An applicant's entitlement to unemployment
benefits must be determined based upon that information available and without regard to a
burden of proof. Any agreement between an applicant and an employer is not binding on
the commissioner in determining an applicant's entitlement. There is no presumption of
entitlement or nonentitlement to unemployment benefits.

    Sec. 6. Minnesota Statutes 2011 Supplement, section 268.07, subdivision 2, is
amended to read:
    Subd. 2. Benefit account requirements. (a) Unless paragraph (b) applies, to
establish a benefit account an applicant must have total wage credits in the applicant's four
quarter base period of at least: (1) $2,400; or (2) 5.3 percent of the state's average annual
wage rounded down to the next lower $100, whichever is higher.
(b) To establish a new benefit account within 52 calendar weeks following the
expiration of the benefit year on a prior benefit account, an applicant must have performed
services in covered employment and have been paid wages in a one or more completed
calendar quarter quarters that started after the effective date of the prior benefit account.
The wages paid for those services must be at least enough to meet the requirements of
paragraph (a), and have been reported on wage detail under section 268.044. A benefit
account under this paragraph may not be established effective earlier than the Sunday
following the end of the most recent completed calendar quarter in which the requirements
of paragraph (a) were met. One of the reasons for this paragraph is to prevent an applicant
from establishing a second benefit account as a result of one loss of employment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2010, section 268.085, subdivision 11, is amended to read:
    Subd. 11. Athletes and coaches. (a) Unemployment benefits must not be paid to
an applicant on the basis of any wage credits from employment that consists of coaching
or participating in sports or athletic events or training or preparing to participate for any
week during the period between two successive sport seasons, or similar periods, if:
    (1) the applicant was so employed in the prior season or similar period, and
    (2) there is a reasonable assurance that the applicant will be so employed in the
following season or similar period.
(b) This subdivision applies to a coach employed by an educational institution whose
only employment with the educational institution is as a coach. Subdivision 7 applies to a
coach who has other employment with an educational institution in addition to coaching
at the educational institution. Employment with multiple educational institutions, or
employment coaching multiple sports, must be aggregated for purposes of application
of this subdivision.

    Sec. 8. Minnesota Statutes 2010, section 268.085, subdivision 15, is amended to read:
    Subd. 15. Available for suitable employment defined. (a) "Available for suitable
employment" means an applicant is ready and, willing, and able to accept suitable
employment. The attachment to the work force must be genuine. An applicant may
restrict availability to suitable employment, but there must be no other restrictions,
either self-imposed or created by circumstances, temporary or permanent, that prevent
accepting suitable employment.
(b) Unless the applicant is in reemployment assistance training, to be considered
"available for suitable employment," a student who has regularly scheduled classes must
be willing to discontinue classes to accept suitable employment when:
(1) class attendance restricts the applicant from accepting suitable employment; and
(2) the applicant is unable to change the scheduled class or make other arrangements
that excuse the applicant from attending class.
(c) An applicant who is absent from the labor market area for personal reasons, other
than to search for work, is not "available for suitable employment."
(d) An applicant who has restrictions on the hours of the day or days of the week
that the applicant can or will work, that are not normal for the applicant's usual occupation
or other suitable employment, is not "available for suitable employment." An applicant
must be available for daytime employment, if suitable employment is performed during
the daytime, even though the applicant previously worked the night shift.

    Sec. 9. Minnesota Statutes 2010, section 268.095, subdivision 6, is amended to read:
    Subd. 6. Employment misconduct defined. (a) Employment misconduct means
any intentional, negligent, or indifferent conduct, on the job or off the job that displays
clearly:
(1) a serious violation of the standards of behavior the employer has the right to
reasonably expect of the employee; or
(2) a substantial lack of concern for the employment.
(b) Regardless of paragraph (a), the following is not employment misconduct:
(1) conduct that was a consequence of the applicant's mental illness or impairment;
    (2) conduct that was a consequence of the applicant's inefficiency or inadvertence;
(3) simple unsatisfactory conduct;
(4) conduct an average reasonable employee would have engaged in under the
circumstances;
(5) conduct that was a consequence of the applicant's inability or incapacity;
(6) good faith errors in judgment if judgment was required;
(7) absence because of illness or injury of the applicant, with proper notice to the
employer;
(8) absence, with proper notice to the employer, in order to provide necessary care
because of the illness, injury, or disability of an immediate family member of the applicant;
    (9) conduct that was a consequence of the applicant's chemical dependency, unless
the applicant was previously diagnosed chemically dependent or had treatment for
chemical dependency, and since that diagnosis or treatment has failed to make consistent
efforts to control the chemical dependency; or
    (10) conduct that was a consequence of the applicant, or an immediate family
member of the applicant, being a victim of domestic abuse as defined under section
518B.01 . Domestic abuse must be shown as provided for in subdivision 1, clause (9).
    (c) Regardless of paragraph (b), clause (9), conduct in violation of sections 169A.20,
169A.31 , or 169A.50 to 169A.53 that interferes with or adversely affects the employment
is employment misconduct.
(d) If the conduct for which the applicant was discharged involved only a single
incident, that is an important fact that must be considered in deciding whether the conduct
rises to the level of employment misconduct under paragraph (a). This paragraph does
not require that a determination under section 268.101 or decision under section 268.105
contain a specific acknowledgment or explanation that this paragraph was considered.
    (e) The definition of employment misconduct provided by this subdivision is
exclusive and no other definition applies.

    Sec. 10. Minnesota Statutes 2010, section 268.103, subdivision 1, is amended to read:
    Subdivision 1. In commissioner's discretion. (a) The commissioner may allow
an appeal to be filed by electronic transmission. If the commissioner allows an appeal to
be filed by electronic transmission, that must be clearly set out on the determination or
decision subject to appeal.
    (b) The commissioner may restrict the manner and format under which an appeal
by electronic transmission may be filed. Restrictions to a specific telephone facsimile
transmission number or electronic address must be clearly set out on the determination or
decision subject to appeal.
    (c) All information requested by the commissioner when an appeal is filed by
electronic transmission must be supplied or the communication does not constitute an
appeal.
(d) Subject to subdivision 2, this section applies to requests for reconsideration
under section 268.105, subdivision 2.

    Sec. 11. Minnesota Statutes 2011 Supplement, section 268.115, subdivision 1, is
amended to read:
    Subdivision 1. Definitions. The terms used in this section subdivision have, for
purposes of the Minnesota Unemployment Insurance Law, the following meaning:
    (1) "Extended unemployment benefit period" means a period that lasts for a
minimum of 13 weeks and that:
    (i) begins with the third week after there is a state "on" indicator; and
    (ii) ends with the third week after there is a state "off" indicator.
    No extended unemployment benefit period may begin before the 14th week
following the end of a prior extended unemployment benefit period.
    (2) There is a "state 'on' indicator" for a week if:
    (i) for that week and the prior 12 weeks, the rate of insured unemployment:
    (a) equaled or exceeded 120 percent of the average of the rates for the corresponding
13-week period ending in each of the prior two calendar years, and was five percent or
more; or
    (b) equaled or exceeded six percent; or
    (ii) The United States Secretary of Labor determines that the average rate of
seasonally adjusted total unemployment in Minnesota for the most recent three months
for which data is published equals or exceeds 6.5 percent and this rate equals or exceeds
110 percent of the rate of the corresponding three-month period in either of the prior
two calendar years.
    (3) There is a "state 'off' indicator" for a week if:
    (i) under clause (2)(i), for that week and the prior 12 weeks, the requirements for a
"state 'on' indicator" are not satisfied; or
    (ii) under clause (2)(ii) the requirements for a "state 'on' indicator" are not satisfied.
    (4) "Rate of insured unemployment," means the percentage derived by dividing the
average weekly number of applicants filing continued requests for regular unemployment
benefits in the most recent 13-week period by the average monthly covered employment
for the first four of the most recent six completed calendar quarters before the end of
that 13-week period.
    (5) "Regular unemployment benefits" means unemployment benefits available to
an applicant other than extended unemployment benefits and additional unemployment
benefits.
    (6) "Eligibility period" for an applicant means the period consisting of the weeks
remaining in the applicant's benefit year within the extended unemployment benefit period
and, if the benefit year ends within the extended unemployment benefit period, any weeks
in the extended unemployment benefit period.
    (7) "Exhaustee" means an applicant who, in the eligibility period:
    (i) the benefit year having not expired has received the maximum amount of regular
unemployment benefits that were available under section 268.07; or
    (ii) the benefit year having expired, has insufficient wage credits to establish a new
benefit account; and or
    (iii) has no right to any type of unemployment benefits under any other state or
federal laws and is not receiving unemployment benefits under the law of Canada.

    Sec. 12. Minnesota Statutes 2010, section 268.18, subdivision 4a, is amended to read:
    Subd. 4a. Court fees; collection fees. (a) If the commissioner is required to pay any
court fees in an attempt to enforce collection of overpaid unemployment benefits, penalties,
or interest, the commissioner may add the amount of the court fees to the total amount due.
(b) If an applicant who has been determined overpaid unemployment benefits
because of fraud seeks to have any portion of the debt discharged under the federal
bankruptcy code, and the commissioner files an objection in bankruptcy court to the
discharge, the commissioner may add the commissioner's cost of any court fees to the debt
if the bankruptcy court does not discharge the debt.
(c) If the Internal Revenue Service assesses the commissioner a fee for offsetting
from a federal tax refund the amount of any fraud overpayment, including penalties and
interest, the amount of the fee may be added to the total amount due. The offset amount
must be put in the trust fund and that amount credited to the total amount due from the
applicant.

    Sec. 13. Minnesota Statutes 2011 Supplement, section 268.184, subdivision 1a,
is amended to read:
    Subd. 1a. Notification and misreporting penalties. (a) If the commissioner finds
that any employer or agent of an employer failed to meet the notification requirements of
section 268.051, subdivision 4, the employer must be assessed a penalty of $5,000 or two
percent of the first full quarterly payroll acquired, whichever is higher. Payroll is wages
paid as defined in section 268.035, subdivision 30. The penalty under this paragraph
must be canceled if the commissioner determines that the failure occurred because of
ignorance or inadvertence.
    (b) If the commissioner finds that any individual advised an employer to violate the
employer's notification requirements under section 268.051, subdivision 4, the individual,
and that individual's employer, must each be assessed the penalty in paragraph (a).
    (c) If the commissioner finds that any person or agent of a person violated the
reporting requirements of section 268.0435 or 268.046, the person must be assessed a
penalty of $5,000 or two percent of the quarterly payroll reported in violation of section
268.0435 or 268.046, whichever is higher. Payroll is wages paid as defined in section
268.035, subdivision 30 .
    (d) Penalties under this subdivision are in addition to any other penalties and subject
to the same collection procedures that apply to past due amounts from an employer.
Penalties must be paid within 30 calendar days after sending of the determination of
penalty.
    (e) The determination of a penalty is final unless the person assessed files an appeal
within 20 calendar days after sending of the determination of the penalty by mail or
electronic transmission. Proceedings on the appeal are conducted in accordance with
section 268.105.

    Sec. 14. Minnesota Statutes 2010, section 268.194, subdivision 1, is amended to read:
    Subdivision 1. Establishment. There is established as a special state trust fund,
separate and apart from all other public money or funds of this state, an unemployment
insurance trust fund, that is administered by the commissioner exclusively for the payment
of unemployment benefits. This trust fund consists of:
    (1) all taxes collected;
    (2) interest earned upon any money in the trust fund;
    (3) reimbursements paid by nonprofit organizations and the state and political
subdivisions;
    (4) tax rate buydown payments under section 268.051, subdivision 7;
    (5) any money received as a loan from the federal unemployment trust fund in
accordance with United States Code, title 42, section 1321, of the Social Security Act;
    (6) any other money received under a reciprocal unemployment benefit arrangement
with the federal government or any other state;
    (7) money recovered on overpaid unemployment benefits except, if allowed by
federal law, five percent of any recovered amount is credited to the administration account;
    (8) all money recovered on losses sustained by the trust fund credited to the account
under this chapter;
    (9) all money received from the contingent account under section 268.199;
    (10) (9) all money credited to the account of Minnesota in the federal unemployment
trust fund under United States Code, title 42, section 1103, of the Social Security Act,
also known as the Reed Act; and
    (11) (10) all money received for the trust fund from any other source.

    Sec. 15. REVISOR'S INSTRUCTION.
The revisor of statutes shall:
(1) change "determination of a penalty" and "determination of the penalty" to
"determination of penalty" wherever it appears in Minnesota Statutes, chapter 268;
(2) change "the United States Citizenship and Immigration Services" to "the United
States Immigration and Customs Enforcement" wherever it appears in Minnesota Statutes,
chapter 268;
(3) make any cross-reference changes needed resulting from the renumbering in
section 2.

    Sec. 16. REPEALER.
Minnesota Rules, part 3315.0555, subparts 2, 3, and 4, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies retroactively to all pending cases.

    Sec. 17. EFFECTIVE DATE.
Unless otherwise specified, this article is effective July 1, 2012.