Bill 3625

                    Current Status

Bill Number:               3625
Ratification Number:       386
Act Number:                361
Introducing Body:          House
Subject:                   Relating to the rate on unemployment
                           compensation contributions for delinquent
                           reports

(A361, R386, H3625)

AN ACT TO AMEND SECTION 41-31-60, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE RATE ON UNEMPLOYMENT COMPENSATION CONTRIBUTIONS FOR DELINQUENT REPORTS, SO AS TO REVISE THIS RATE; TO AMEND SECTION 41-31-110, RELATING TO THE COMPUTATION OF UNEMPLOYMENT COMPENSATION RATES FOR SUCCESSORS OF AN EMPLOYER, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH THESE RATES ARE TO BE COMPUTED; TO AMEND SECTION 41-31-140, RELATING TO THE PROHIBITION AGAINST THE TRANSFER OF EXPERIENCED RATING ACCOUNTS OF TRANSFERRING EMPLOYERS EXCEPT UNDER CERTAIN CONDITIONS, SO AS TO FURTHER PROVIDE FOR THESE CONDITIONS; AND TO AMEND SECTION 41-35-20, AS AMENDED, RELATING TO THE PAYMENT OF CERTAIN UNEMPLOYMENT COMPENSATION BENEFITS, SO AS TO PROVIDE FOR THE DENIAL OF BENEFITS TO EMPLOYEES OF EDUCATIONAL SERVICES AGENCIES DURING ESTABLISHED AND CUSTOMARY VACATION PERIODS OR HOLIDAY RECESSES.

Be it enacted by the General Assembly of the State of South Carolina:

Computation date

SECTION 1. Section 41-31-60 of the 1976 Code, as last amended by Act 154 of 1985, is further 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 five and four-tenths percent must be assigned until the next computation date. The assigned rate is applicable for the entire period for which the computation is made even though the delinquent report is subsequently received.

(2) No employer is 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 is unpaid and outstanding against the employer. If on the computation date upon which an employer's rate is computed as provided in Section 41-31-40 there is an outstanding tax execution, a rate of two and sixty-four hundredths percent must be assigned for the period to which the computation applies. If the rate for the prior year or the computed rate for the computation period is greater than two and sixty-four hundredths percent, the highest rate must be assigned until the next computation date or until such time as any outstanding tax execution has been paid."

Computation of rates

SECTION 2. Section 41-31-110 of the 1976 Code, as last amended by Act 108 of 1981, is further 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 are computed as follows:

(a) If the successor is not already an employer at the time of the acquisition, the rate of contributions applicable to the predecessor employer with respect to the period immediately preceding the date of acquisition, if there is only one predecessor employer, shall apply to the successor employer for the remainder of the calendar year. The rate for the subsequent calendar year is computed based upon the employment benefit experience record of the predecessor or upon the combined employment benefit experience record of the predecessor and the successor, if applicable, as of June thirtieth of the year in which the acquisition occurred.

(b) If the successor is not already an employer at the time of the acquisition and there is more than one transferring employer with a different rate, the successor employer is assigned the rate of that transferring employer who has the highest rate with the rate being applicable until the end of the quarter in which the succession occurs.

(c) If the successor is already an employer at the time of the acquisition, the rate of contributions applicable at the time of the acquisition to the 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) the rate as assigned continues in effect until the first day of the next calendar quarter immediately following the 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 is applicable to the successor from the first day of the quarter for the remainder of the calendar year. If the acquisition occurred prior to July first, the rate for the subsequent calendar year is computed based upon the combined employment benefit experience record as of June thirtieth of the year in which the acquisition occurred; if the acquisition occurred subsequent to June thirtieth, the rate for the subsequent calendar year is computed based upon the combined employment benefit experience record as of December thirty-first. All rates thereafter are computed upon the basis of the combined employment benefit experience record and at such time as provided in Section 41-31-40."

Accounts may not be transferred

SECTION 3. Section 41-31-140 of the 1976 Code is amended to read:

"Section 41-31-140. No transfer of experience rating accounts, in whole or in part, is permitted under the provisions of Sections 41-31-100 to 41-31-130 unless all unemployment compensation taxes based on wages paid by the transferring employer prior to the date of the transfer are paid by the transferring employer when due or assumed by the acquiring employer within sixty days from the date he is notified by the commission that the transfer cannot be allowed because of unpaid unemployment compensation taxes. If the experience rating account of the predecessor employer contains a debit balance (excess of total benefits charged over total contributions paid), the experience rating account of the predecessor employer in any event must be transferred to the successor employer in accordance with the provisions of Sections 41-31-100 and 41-31-120."

Benefits not payable on basis of service

SECTION 4. Item (5) of Section 41-35-20, as added by Act 83 of 1985, is further amended to read:

"(5) With respect to any services described in subsections (1), (2), and (4), benefits are not payable on the basis of services in any such capacities to any individual for any week which commences during an established and customary vacation period or holiday recess if the individual performs these services in the period immediately before the vacation period or holiday recess, and there is a reasonable assurance that the individual will perform these services in the period immediately following the vacation period or holiday recess."

Time effective

SECTION 5. This act shall take effect upon approval by the Governor.