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Bill Number: 2778 Ratification Number: 158 Act Number 108 Introducing Body: House Subject: Unemployment compensation, procedures revised
(A108, R158, H2778)
AN ACT TO AMEND SECTION 41-27-210, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITION OF "EMPLOYER" UNDER THE EMPLOYMENT SECURITY LAW, SO AS TO CORRECT AN IMPROPER REFERENCE TO AN ITEM IN THE SECTION; TO AMEND SECTION 41-27-260, AS AMENDED, RELATING TO EXEMPTED EMPLOYMENT, SO AS TO FURTHER DEFINE "EXEMPTED EMPLOYMENT"; TO AMEND SECTION 41-27-370, AS AMENDED, RELATING TO THE DEFINITION OF "UNEMPLOYMENT", SO AS TO FURTHER DEFINE "UNEMPLOYMENT"; TO AMEND SECTION 41-27-380, AS AMENDED, RELATING TO THE DEFINITION OF "WAGES", SO AS TO FURTHER DEFINE "WAGES"; TO AMEND SECTION 41-31-60, RELATING TO UNPAID EMPLOYMENT SECURITY TAXES, SO AS TO CLARIFY THE PENALTIES FOR EMPLOYERS WHO FAIL TO SUBMIT UNEMPLOYMENT COMPENSATION TAX REPORTS; TO AMEND SECTION 41-31-80, RELATING TO THE STATEWIDE RESERVE RATIO, SO AS TO REMOVE THE WAGES OF REIMBURSABLE EMPLOYERS FROM THE FORMULA AND ELIMINATE THE IMBALANCE IN COMPUTING THE STATEWIDE RESERVE RATIO; TO AMEND SECTION 41-31-110, RELATING TO COMPUTATION OF RATES APPLICABLE TO SUCCESSOR EMPLOYERS, SO AS TO CLARIFY STATE POLICY AS TO THE TRANSFER OF CONTRIBUTION RATES TO SUCH EMPLOYERS AND CARRY OUT THE ADMINISTRATION OF EXPERIENCE RATING POLICIES; TO AMEND SECTION 41-31-620, AS AMENDED, RELATING TO PAYMENTS TO THE UNEMPLOYMENT FUND BY NONPROFIT ORGANIZATIONS, SO AS TO RESTORE CERTAIN PROVISIONS OF THE SECTION INADVERTENTLY DELETED BY A PREVIOUS AMENDMENT TO THE SECTION; TO AMEND SECTION 41-31 660, AS AMENDED, RELATING TO THE AMOUNT OF PAYMENTS TO THE UNEMPLOYMENT FUNDS, SO AS TO PERMIT CHARGEBACKS AGAINST REIMBURSABLE EMPLOYERS TO BE PRORATED; TO AMEND SECTION 41-35-420, RELATING TO ELIGIBILITY FOR EXTENDED BENEFITS, SO AS TO BRING THE STATE UNEMPLOYMENT COMPENSATION LAW INTO CONFORMANCE WITH THE FEDERAL LAW; TO AMEND SECTION 41-35-640, RELATING TO RECONSIDERATION OF DETERMINATION, SO AS TO PROVIDE FOR A TEN-DAY PERIOD TO REQUEST RECONSIDERATION; TO AMEND SECTION 41-35-660, RELATING TO APPEALS, SO AS TO PROVIDE THAT A CLAIMANT WHO HAS BEEN DETERMINED TO BE ELIGIBLE FOR BENEFITS SHALL BE REQUIRED TO REPAY SUCH BENEFITS IF SUCH DETERMINATION OF ELIGIBILITY IS LATER REVERSED; AND TO AMEND SECTION 41-41-40, RELATING TO RECOVERY OF BENEFITS PAID TO PERSONS NOT ENTITLED THERETO, SO AS TO PROVIDE THAT THE CLAIMANT SHALL BE REQUIRED TO REPAY THE COMMISSION PRIOR TO HAVING OVERPAYMENTS DEDUCTED FROM FUTURE PAYMENTS; AND TO REPEAL SECTIONS 41-35-70, 41-35-80 AND 41-35-90, RELATING TO THE DEFINITION OF "SEASONAL INDUSTRY", "SEASONAL WORKER", AND RULES FOR SEASONAL WORKERS.
Be it enacted by the General Assembly of the State of South Carolina:
Employment record to be used
SECTION l. Item (4) of Section 41-27-210 of the 1976 Code is amended to read:
"(4) Any individual or other legal entity which acquired substantially all of the business of another employing unit, if the employment record of such employing unit subsequent to such acquisition, together with the employment record of the acquired business prior to such acquisition, both within the same calendar year, will be sufficient to constitute such employing unit an employer subject to Chapters 27 through 41 of this title under item (2) of this section; provided, however that if only a part of the business of another is acquired by an individual or other legal entity the employment record of such part prior to acquisition shall be considered and not the whole employment record of the business from which such part was acquired as if such part was conducted."
SECTION 2. Item (10) of Section 41-27-260 of the 1976 Code, as last amended by Act 161 of 1977, is further amended to read:
"(10) For the purposes of items (2) and (3) of Section 41-27-230 the term 'employment' shall not include:
(a) Service performed in the direct employ of a church or convention or association of churches or an organization which is operated primarily for religious purposes and which is operated, supervised, controlled or principally supported by a church or convention or association of churches;
(b) Service performed by a duly ordained, commissioned or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order;
(c) Service performed 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 providing remunerative work for individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive labor market by an individual receiving such rehabilitation or remunerative work;
(d) Service performed prior to January 1, 1978, for a hospital in a state prison or other state correctional institution by an inmate of the prison or correctional institution and after December 31, 1977, by an inmate of a custodial or penal institution;
(e) Service performed as a 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, by an individual receiving such work-relief or work-training, unless a federal law, rule or regulation mandates unemployment insurance coverage to individuals in a particular work-relief or work-training program."
Individual deemed unemployed
SECTION 3. Section 41-27-370 of the 1976 Code, as last amended by Section 8, Part II, of Act 519 of 1980, is further amended to read:
"Section 41-27-370. An individual shall be deemed 'unemployed' in any week during which he performs no services and with respect to which no wages are payable to him or in any week of less than full-time work if the wages payable to him with respect to such week are less than his weekly benefit amount. The Commission shall prescribe regulations applicable to unemployed individuals, making such distinctions in the procedures as to total unemployment, part-total unemployment, partial unemployment of individuals attached to their regular jobs, and other forms of short-time work, as the Commission deems necessary.
An individual shall be deemed 'unemployed' in any week during which no governmental or other pension, retirement pay, annuity or other similar periodic payment which is attributable to his employment is payable to him or, if such payment is payable to him with respect to such weeks, the amount thereof is less than his weekly benefit amount. Each eligible individual, who is unemployed in any week and who is receiving a governmental or other pension, retirement pay, annuity or other similar periodic payment which is attributable to his employment shall be paid with respect to such week a benefit in an amount equal to his weekly benefit amount less the pension, retirement pay, annuity or other similar periodic payment payable to him with respect to such week. Such benefit if not a multiple of one dollar shall be computed to the next higher multiple of one dollar. The amount of benefits payable to an individual for any week which begins after the effective date of the applicable provision in the Federal Unemployment Tax Act and which begins in a period with respect to which such individual receiving a governmental or other pension, retirement or retired pay, annuity or other similar periodic payment which is based on the previous work of such individual shall be reduced (but not below zero) by an amount equal to the amount of such pension, retirement or retired pay, annuity or other payment which is reasonably attributable to such week; provided, that if the provisions of the Federal Unemployment Tax Act permit, the requirements of this paragraph shall only apply in the case of a pension, retirement or retired pay, annuity or other similar periodic payment under a plan maintained (or contributed to) by a base period employer.
Provided, further, that in the event the individual has participated in any pension, retirement, annuity or any other similar plan of the employer by having made contributions to such plan, only one-half of the amount of the pension amount paid under such plan shall be applicable in determining the amount of benefits payable for any week claimed; except that in the case where an individual is the sole contributor to a retirement, pension, annuity or other similar plan, no amount of the pension received therefrom shall serve to reduce the amount of benefits payable to an individual for any week claimed.
No individual shall be considered as unemployed in any week (not to exceed two in any benefit year) in which the Commission finds that his unemployment is due to a vacation week with respect to which the individual is receiving or has received his regular wages or which is constituted a vacation period with or without pay by reason of a written contract between the employer and the employees or by reason of the employer's vacation policy and practice to his employees. This provision shall apply only if it is found by the Commission that employment will be available for the claimant with the employer at the end of a vacation period as described in this section. This section shall not be applicable to any claimant whose employer shall fail to comply, in respect to such vacation period, with the requirements of all rules, regulations or procedures of the Commission regarding the filing of notices, reports, information or claims in connection with individual, group or mass separations arising from the vacation."
Payment of tax
SECTION 4. Item (c) of subsection (1) of Section 41-27-380 of the 1976 Code is amended to read:
"(c) The payment by an employing unit (without deduction from the remuneration of the individual in its employ) of the tax imposed upon an individual in its employ, under Section 3101 of the Federal Internal Revenue Code, only if such service is agricultural labor or domestic service;".
SECTION 5. Section 41-31-60 of the 1976 Code is amended to read:
"Section 41-31-60. (1) If on the computation date upon which an employer's rate is to be computed as provided in Section 41-31-40 there is a delinquent report, a rate of .0270 will be assigned for the next calendar year; provided, however, if the rate for the prior year of the employer is greater than .0270, the higher rate will remain in effect until the next computation date. The assigned rate will be applicable for the entire computation period even though the delinquent report is subsequently received.
(2) No employer shall be permitted to pay his unemployment compensation tax at a reduced rate for any quarter when a tax execution issued in accordance with Section 41-31-390 with respect to delinquent unemployment compensation tax for a previous quarter, shall be unpaid and outstanding against such employer. The Commission may waive this provision in those instances in which such an employer shall comply with any agreement entered into providing for installment payments of delinquent unemployment compensation taxes placed in execution."
Statewide reserve ratio
SECTION 6. Section 41-31-80 of the 1976 Code is amended to read:
"Section 41-31-80. A statewide reserve ratio shall be computed once each year by adding to the total unemployment compensation fund on June thirtieth all contributions and interest received on or before July thirty-first and dividing the result so obtained by the sum of the total wages reported by contributing employers on their contribution reports received by the Commission during the twelve-month period ending September thirtieth. Any amount credited to the state's account under Section 903 of the Social Security Act, as amended, which has been appropriated for expenses of administration, whether or not withdrawal from the trust fund, shall be excluded from the unemployment fund balance in computing the statewide reserve ratio. Any amount due and payable as a payment in lieu of contributions by a nonprofit organization as provided in Section 41-31-630, the State of South Carolina or the Federal Government shall be added to the total unemployment compensation fund for the purposes of the computations required by this section. When the statewide reserve ratio computed during any calendar year equals or exceeds three and one-half percent, contribution rates applicable to the following calendar year shall be computed in accordance with Sections 41-31-40 and 41-31-50. When the statewide reserve ratio computed during any calendar year is less than three and one-half percent, all contribution rates applicable to the following calendar year shall be increased over those computed in accordance with Sections 41-31-40 and 41-31-50 as follows:
(1) Thirty-five hundredths of one percent, if the statewide reserve ratio equals or exceeds three percent but is less than three and one-half percent;
(2) Seven-tenths of one percent, if the statewide reserve ratio equals or exceeds two and one-half percent but is less than three percent:
(3) One and five hundredths percent, if the statewide reserve ratio is less than two and one-half percent.
This section shall not apply to any employer whose contribution rate is more than two and seven-tenths percent, and no employer's rate shall exceed two and seven-tenths percent by reason of the application of this section."
Computation of rates of contributions
SECTION 7. Section 41-31-110 of the 1976 Code is amended to read:
"Section 41-31-110. Whenever any person or other legal entity has in any manner succeeded to or has acquired substantially all or a distinct and severable portion of the business of another, as provided in Sections 41-31-100 and 41-31-120, the rates of contributions shall be computed as follows:
(a) If the successor is not already an employer at the time of such acquisition, the rate of contributions applicable to the predecessor employer with respect to the period immediately preceding the date of acquisition, if there be only one predecessor employer, shall apply to the successor employer until the next computation date.
(b) If the successor is not already an employer at the time of such acquisition and there is more than one transferring employer with a different rate, the successor employer shall be assigned the rate of that transferring employer who has the highest rate with such rate being applicable until the end of the quarter in which such succession occurs.
(c) If the successor is already an employer at the time of such acquisition, the rate of contributions applicable at the time of the acquisition to such successor employer shall continue to be applicable until the end of the quarter in which succession occurs.
For the purposes of subsections (b) and (c) such rate as shall be assigned shall continue in effect until the first day of the next calendar quarter immediately following such acquisition, at which time the Commission shall compute a rate based upon the combination of that portion of the employment benefit experience record acquired from the predecessor with the employment benefit experience record of the successor, subject to the provisions of this article, which rate shall be applicable to the successor from the first day of such quarter until the next computation date under Section 41-31-50. All rates thereafter shall be computed upon the basis of such combined employment benefit experience record."
Nonprofit organizations to pay contributions
SECTION 8. Section 41-31-620 of the 1976 Code, as last amended by Act 161 of 1977, is further amended to read:
"Section 41-31-620. Any nonprofit organization which, pursuant to item (6) of Section 41-27-210, is, or becomes, subject to Chapters 27 through 41 of this title on or after January 1, 1972, shall pay contributions under provisions of Section 41-31-10 unless it elects, in accordance with this section, to pay to the Commission for the unemployment fund an amount equal to the amount of regular benefits and one-half the extended benefits paid; provided, however, that after January 1, 1979, the State or any political subdivision or any instrumentality thereof as defined in subitem (b) of item (2) of Section 41-27-230 shall be required to reimburse the amount of regular benefits and all extended benefits attributable to services performed in its employ during the effective period of such elections.
(1) Any nonprofit organization which is, or becomes, subject to Chapters 27 through 41 of this title on January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of not less than two calendar years beginning with January 1, 1972, provided, it files with the Commission a written notice of its election within the thirty-day period immediately following such date.
(2) Any nonprofit organization which becomes subject to Chapters 27 through 41 of this title after January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of not less than two calendar years beginning with the date on which such subjectivity begins by filing a written notice of its election with the Commission not later than thirty days immediately following the date of the determination of such subjectivity.
(3) Any nonprofit organization which makes an election in accordance with item (1) or item (2) of this section will continue to be liable for payments in lieu of contributions until it files with the Commission a written notice terminating its election not later than thirty days prior to the beginning of the calendar year for which such termination shall first be effective.
(4) Any nonprofit organization which has been paying contributions under Chapters 27 through 41 of this title for a period subsequent to January 1, 1972, may change to a reimbursable basis by filing with the Commission not later than thirty days prior to the beginning of any calendar year a written notice of election to become liable for payments in lieu of contributions. Such election shall not be terminable by the organization for that and the next calendar year.
(5) The Commission may for good cause extend the period within which a notice of election, or a notice of termination, must be filed and may permit an election to be retroactive ,but not any earlier than with respect to benefits paid after December 31, 1969.
(6) The Commission, in accordance with such regulations as may be prescribed, shall notify each nonprofit organization of any determination made with respect to its status as an employer and of the effective date of any election which it makes and of any termination of such election. Such determinations shall be subject to reconsideration, appeal and review in accordance with the provisions of item (5) of Section 41-31-630."
Benefits to be based on base period wages
SECTION 9. Item (1) of Section 41-31-660 of the 1976 Code, as last amended by Act 161 of 1977, is further amended to read:
"(1) If the benefits paid to an individual are based both on base period wages paid by one or more employers that are liable for contributions and on base period wages paid by one or more employers that are liable for payments in lieu of contributions, the amount payable by each employer that is liable for payments in lieu of contributions shall bear the same ratio to the sum of the amounts payable by such employers as the total base period wages paid to the individual by each employer that is liable for payments in lieu of contributions bear to the total base period wages paid to the individual by all such employers."
Individuals eligible to receive extended benefits
SECTION 10. Section 41-35-420 of the 1976 Code is amended to read:
"Section 41-35-420. (1) An individual shall be eligible to receive extended benefits with respect to any week of unemployment in his eligibility period only if the commission finds that with respect to such week:
(a) He is an 'exhaustee' as defined in Section 41-35-390.
(b) He has satisfied the requirements of Chapters 27 through 41 of this title for the receipt of regular benefits that are applicable to individuals claiming extended benefits, including not being subject to a disqualification for the receipt of benefits.
Except as provided in item (d), an individual shall not be eligible for extended benefits for any week if:
(i) Extended benefits are payable for such week pursuant to an interstate claim filed in any state under the interstate benefit payment plan;
(ii) No extended benefit period is in effect for such week in such state.
Item (c) of subsection (1) shall not apply with respect to the first two weeks for which extended benefits are payable (determined without regard to this subsection pursuant to an interstate claim filed under the interstate benefit payment plan to the individual with respect to the benefit year.
(2) Notwithstanding the provisions of Sections 41-35-410 and 41-35-420, effective for weeks beginning after March 31, 1981, an individual shall be disqualified for receipt of extended benefits if the Commission finds that during any week of his eligibility period:
(a) He has failed either to apply for, or to accept an offer of suitable work (as defined under item (d) of this subsection), to which he was referred by the Commission;
(b) He has failed to furnish evidence that he has actively engaged in a systematic and sustained effort to find work.
Such disqualification shall begin with the week in which such failure occurred and shall continue until he has been employed in each of four subsequent weeks (whether or not consecutive) and has earned remuneration equal to not less than four times his weekly extended benefit amount.
For the purposes of this subsection, the term 'suitable work' means any work which is within the individual's capabilities to perform if:
(i) The gross average weekly remuneration payable for the work exceeds the sum of the individual's weekly extended benefit amount plus the amount, if any, of supplemental unemployment benefits (as defined in Section 501(c)(17)(D) of the Internal Revenue Code of 1954) payable to such individual for such week;
(ii) The wages payable for the work equal the higher of the minimum wages provided by Section 6(a) (1) of the Fair Labor Standards Act of 1938 (without regard to any exemption) or the state or local minimum wage;
(iii) The position was offered to the individual in writing and was listed with the State Employment Service;
(iv) Such work otherwise meets the definition of 'suitable work' for regular benefits contained in item (3) of Section 41-35-120 to the extent that such criteria of suitability are not inconsistent with the provisions of that item.
(3) Notwithstanding any provisions of item (d) of this subsection to the contrary, no work shall be deemed to be suitable work for an individual which does not accord with item (c) of subsection (3) of Section 41-35-120.
(4) For the purposes of item (b) of subsection (2), an individual shall be treated as actively engaged in seeking work during any week if:
(a) The individual has engaged in a systematic and sustained effort to obtain work during such week;
(b) The individual furnishes tangible evidence that he has engaged in such effort during such week.
(5) The Employment Service shall refer any claimant entitled to extended benefits under this chapter to any suitable work which meets the criteria prescribed in item (d) of subsection (2).
(6) An individual shall not be eligible to receive extended benefits with respect to any week of unemployment in his eligibility period if such individual has been disqualified for regular or extended benefits under this act because he or she voluntarily left work, was discharged for misconduct or failed to accept an offer of or apply for suitable work unless the disqualification imposed for such reasons has been terminated in accordance with specific conditions established under the South Carolina Employment Security Law requiring the individual to perform service for remuneration subsequent to the date of such disqualification.
If the disqualification which was imposed did not require the individual to perform service for remuneration subsequent to the date of such disqualification such individual will be ineligible for extended benefits beginning with the effective date of the request for initiation of an extended benefit claim series and continuing until he has secured employment and shows to the satisfaction of the Commission that he has worked in each of at least four different weeks whether or not such weeks are consecutive, and earned wages equal to at least four times the weekly benefit amount of his claim."
Reconsideration of initial determination
SECTION 11. Subsection (1) of Section 41-35-640 of the 1976 Code is amended to read:
"(1) An initial determination may for good cause be reconsidered. A party entitled to notice of an initial determination may apply for a reconsideration not later than ten days after the determination was mailed to his last known address or otherwise delivered to him. Notice of the redetermination shall be promptly given, in the manner prescribed in this article with respect to notice of an initial determination."
Claimant may file appeal
SECTION 12. Section 41-35-660 of the 1976 Code is amended to read:
"Section 41-35-660. The claimant or any other interested party may file an appeal from an initial determination, redetermination or subsequent determination not later than ten days after the determination was mailed to his last known address, or otherwise delivered to him. The term 'any other interested party' shall mean and include the claimant's last or separating employer, and any employer whose account may be affected by the adjudication of the claim. If an appeal is duly filed with respect to a matter other than the weekly benefit amount or maximum amount of benefits payable, and the appeal tribunal affirms a determination allowing benefits, such benefits paid prior to the decision disallowing benefits shall not be recovered from any claimant regardless of any appeal which may thereafter be taken to the extent that such benefits are not charged to the account of any employer."
Person shall be liable for repayment
SECTION 13. Section 41-41-40 of the 1976 Code is amended to read:
"Section 41-41-40. Any person who has received any sum as benefits under Chapters 27 through 41 of this title which any conditions for the receipt of benefits imposed by such chapters were not fulfilled in his case or while he was disqualified from receiving benefits shall be liable to repay the Commission for the unemployment compensation fund a sum equal to the amount so received by him. In the event full repayment of benefits, to which an individual was determined not entitled, has not been made such sum will be deducted from any future benefits payable to him under Chapters 27 through 41 of this title, and such sum shall be collectible in the manner provided in Sections 41-31-380 to 41-31-400 for the collection of past-due contributions."
SECTION 14. Sections 41-35-70, 41-35-80 and 41-35-90 of the 1976 Code are repealed.
SECTION 15. This act shall take effect upon approval by the Governor.