Current Status Bill Number:View additional legislative information at the LPITS web site.3626 Ratification Number:387 Act Number:362 Introducing Body:House Subject:Relating to the South Carolina Employment Security Law
(A362, R387, H3626)
AN ACT TO AMEND ARTICLE 3, CHAPTER 27 OF TITLE 41, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA EMPLOYMENT SECURITY LAW, BY ADDING SECTION 41-27-410 SO AS TO PROVIDE FOR A DEFINITION OF EMPLOYMENT SECURITY ADMINISTRATIVE CONTINGENCY ASSESSMENTS; TO AMEND SECTIONS 41-31-10, 41-31-40, 41-31-50, AS AMENDED, 41-31-60, AS AMENDED, 41-31-80, AS AMENDED, AND 41-31-670, RELATING TO CERTAIN EMPLOYER CONTRIBUTIONS OR CONTRIBUTION RATES UNDER THE EMPLOYMENT SECURITY LAW, SO AS TO REVISE THESE RATES; TO AMEND SECTION 41-31-150, RELATING TO THE TREATMENT OF FRACTIONS OF A CENT UNDER THE EMPLOYMENT SECURITY LAW; TO AMEND SECTION 41-31-360, RELATING TO ADJUSTMENTS AND REFUNDS; TO AMEND SECTION 41-31-380, RELATING TO A LIEN FOR CONTRIBUTIONS, INTEREST, PENALTIES, AND COSTS; TO AMEND SECTION 41-31-390, RELATING TO THE ISSUANCE OF WARRANTS OF EXECUTION FOR COLLECTION OF CONTRIBUTIONS; AND TO AMEND SECTION 41-31-400, RELATING TO THE PROCEDURES UNDER EXECUTION, SO AS TO INCLUDE CERTAIN REFERENCES TO EMPLOYMENT SECURITY ADMINISTRATIVE CONTINGENCY ASSESSMENTS WITHIN THESE SECTIONS; TO AMEND CHAPTER 31 OF TITLE 41 OF THE 1976 CODE, RELATING TO CONTRIBUTIONS AND PAYMENTS UNDER THE EMPLOYMENT SECURITY LAW BY ADDING ARTICLE 9 SO AS TO PROVIDE FOR THE PAYMENT AND COLLECTION OF EMPLOYMENT SECURITY ADMINISTRATIVE CONTINGENCY ASSESSMENTS; AND TO AMEND ARTICLE 5, CHAPTER 33 OF TITLE 41 OF THE 1976 CODE, RELATING TO THE EMPLOYMENT SECURITY SPECIAL ADMINISTRATION FUND BY ADDING SECTION 41-33-710 SO AS TO ESTABLISH THE EMPLOYMENT SECURITY ADMINISTRATIVE CONTINGENCY FUND AND PROVIDE FOR THE MANNER IN WHICH THE MONEY IN THIS FUND MUST BE DEPOSITED, ADMINISTERED, AND DISBURSED.
Be it enacted by the General Assembly of the State of South Carolina:
Assessment
SECTION 1. Article 3, Chapter 27 of Title 41 is amended by adding:
"Section 41-27-410. Effective January 1, 1986, the employment security administrative contingency assessment is an assessment of six one-hundredths of one percent to be assessed upon the wages as defined in Section 41-27-380(2) of all employers except those who have either elected to make payments in lieu of contributions as defined in Section 41-31-620 or are liable for the payment of contributions as defined in Section 41-31-620 or are liable for the payment of contributions and are classified as a state agency or any political subdivision or any instrumentality of the political subdivision as defined in Section 41-27-230(2) or have been assigned a contribution rate of five and four-tenths percent."
Contributions
SECTION 2. Section 41-31-10 of the 1976 Code is amended to read:
"Section 41-31-10. Each employer shall pay contributions equal to five and four-tenths percent of wages paid by him during each year except as may be otherwise provided in Chapters 27 through 41 of this title."
Rate
SECTION 3. Section 41-31-40 of the 1976 Code is amended to read:
"Section 41-31-40. Each employer's rate for the twelve months commencing January first of any calendar year is determined in accordance with Section 41-31-50 on the basis of his record up to July first of the preceding calendar year, but no employer's rate is less than two and sixty-four hundredths percent until there have been twenty-four consecutive months of coverage after first becoming liable for contributions under Chapters 27 through 41 of this title. Each employer who completes twenty-four consecutive calendar months of coverage after first becoming liable for contributions under the chapters during the current calendar year shall have a rate computed at the beginning of the calendar quarter following the calendar quarter during which twenty-four consecutive months of coverage are completed based on the employer's experience through the preceding quarter. The rate computed in accordance with Section 41-31-50 is applicable for the remainder of the current calendar year. For those employers completing the twenty-four months of coverage during the current calendar year, a new rate for the succeeding calendar year is determined on the basis of their records through December thirty-first of the current year."
Rate computation
SECTION 4. Section 41-31-50 of the 1976 Code, as last amended by Act 154 of 1985, is further amended to read:
"Section 41-31-50. Each employer eligible for a rate computation shall have his rate determined in the following manner:
(1) If, on the computation date as of which an employer's rate is to be computed, as provided in Section 41-31-40, the total of all his contributions paid on his own behalf for all past periods exceeds the total benefits charged to his account for all the periods his contribution rate for the period specified in Section 41-31-40 is, except for the provisions of Section 41-31-80, as follows:
(a) With respect to the calendar year 1973:
(i) Two and thirty-five hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(ii) Two percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(iii) One and sixty-five hundredths percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(iv) One and thirty hundredths percent, if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(v) Ninety-five hundredths of one percent, if the excess equals or exceeds nine percent but is less than ten percent of his most recent annual payroll;
(vi) Six tenths of one percent, if the excess equals or exceeds ten percent but is less than eleven percent of his most recent annual payroll;
(vii) Twenty-five hundredths of one percent, if the excess equals or exceeds eleven percent of his most recent annual payroll.
(b) With respect to calendar years 1974 through 1985:
(i) Two and thirty-five hundredths percent, if the excess equals or exceeds three percent but is less than four percent of his most recent annual payroll;
(ii) Two percent, if the excess equals or exceeds four percent but is less than five percent of his most recent annual payroll;
(iii) One and sixty-five hundredths
percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(iv) One and thirty hundredths percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(v) Ninety-five hundredths of one percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(vi) Six tenths of one percent, if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(vii) Twenty-five hundredths of one percent, if the excess equals or exceeds nine percent of his most recent annual payroll.
(c) With respect to any calendar year commencing with the calendar year 1986:
(i) Two and twenty-nine hundredths percent, if the excess equals or exceeds three percent but is less than four percent of his most recent annual payroll;
(ii) One and ninety-four hundredths percent, if the excess equals or exceeds four percent but is less than five percent of his most recent annual payroll;
(iii) One and fifty-nine hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(iv) One and twenty-four hundredths percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(v) Eighty-nine hundredths of one percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(vi) Fifty-four hundredths of one percent if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(vii) Nineteen hundredths of one percent, if the excess equals or exceeds nine percent of his most recent annual payroll.
(2) If, on the computation date as of which an employer's rate is to be computed, as provided in Section 41-31-40, the total of all his contributions paid on his own behalf for all past periods is less than the total benefits charged to his account for all the periods his contribution rate for the period specified in Section 41-31-40 is as follows:
(a) With respect to any calendar year prior to the calendar year 1985:
(i) Three and five hundredths percent, if the deficit equals five percent but is less than ten percent of his most recent annual payroll;
(ii) Three and forty hundredths percent, if the deficit equals ten percent but is less than fifteen percent of his most recent annual payroll;
(iii) Three and seventy-five hundredths percent, if the deficit equals fifteen percent but is less than twenty percent of his most recent annual payroll;
(iv) Four and ten hundredths percent, if the deficit equals or exceeds twenty percent of his most recent annual payroll;
(b) With respect to the calendar year 1985:
(i) Three and five hundredths percent, if the deficit equals five percent but is less than ten percent of his most recent annual payroll;
(ii) Three and forty hundredths percent, if the deficit equals ten percent but is less than fifteen percent of his most recent annual payroll;
(iii) Three and seventy-five hundredths percent, if the deficit equals fifteen percent but is less than twenty percent of his most recent annual payroll;
(iv) Four and ten hundredths percent, if the deficit equals twenty percent but is less than twenty-five percent of his most recent annual payroll;
(v) Four and forty-five hundredths percent, if the deficit equals twenty-five percent but is less than thirty percent of his most recent annual payroll;
(vi) Four and eighty hundredths percent, if the deficit equals thirty percent but is less than thirty-five percent of his most recent annual payroll;
(vii) Five and fifteen hundredths percent, if the deficit equals thirty-five percent but is less than forty percent of his most recent annual payroll;
(viii) Five and forty hundredths percent, if the deficit equals or exceeds forty percent of his most recent annual payroll.
(c) With respect to any calendar year commencing with the calendar year 1986:
(i) Two and ninety-nine hundredths percent if the deficit equals or exceeds five percent but is less than ten percent of his most recent annual payroll;
(ii) Three and thirty-four hundredths percent if the deficit equals or exceeds ten percent but is less than fifteen percent of his most recent annual payroll;
(iii) Three and sixty-nine hundredths percent if the deficit equals or exceeds fifteen percent but is less than twenty percent of his most recent annual payroll;
(iv) Four and four hundredths percent if the deficit equals or exceeds twenty percent but is less than twenty-five percent of his most recent annual payroll;
(v) Four and thirty-nine hundredths percent if the deficit equals or exceeds twenty-five percent but is less than thirty percent of his most recent annual payroll;
(vi) Four and seventy-four hundredths percent if the deficit equals or exceeds thirty percent but is less than thirty-five percent of his most recent annual payroll;
(vii) Five and nine hundredths percent if the deficit equals or exceeds thirty-five percent but is less than forty percent of his most recent annual payroll;
(viii) Five and forty hundredths percent, if the deficit equals or exceeds forty percent of his most recent annual payroll.
(3) In determining an employer's contribution rate, contributions for the quarter immediately preceding the computation date are considered as paid before the computation date if they are paid by the employer on or before the end of the month following the quarter or within any period of grace allowed by the Commission for payment of the quarter's contribution.
(4) For calendar year 1986 and any subsequent calendar year, voluntary payments are not permitted for the purpose of obtaining a lower rate of required contributions."
Computation date
SECTION 5. Section 41-31-60 of the 1976 Code, as 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."
Statewide reserve ratio
SECTION 6. Section 41-31-80 of the 1976 Code, as last amended by Act 108 of 1981, is further amended to read:
"Section 41-31-80. A statewide reserve ratio must 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 of the current year. 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 withdrawn from the trust fund, is 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 must 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 are 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 are 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; and
(3) One and five hundredths percent, if the statewide reserve ratio is less than two and one-half percent.
This section does not apply to any employer whose contribution rate is more than two and sixty-four hundredths percent, and no employer's rate shall exceed two and sixty-four hundredths percent by reason of the application of this section."
Payment of contribution or assessment
SECTION 7. Section 41-31-150 of the 1976 Code is amended to read:
"Section 41-31-150. In the payment of any contributions or employment security administrative contingency assessment a fractional part of a cent must be disregarded unless it amounts to one-half cent or more, in which case it must be increased to one cent."
Application for adjustment
SECTION 8. Section 41-31-360 of the 1976 Code is amended to read:
"Section 41-31-360. If, not later than four years after the date on which any contributions or interest or employment security administrative contingency assessments became due, an employer who has paid the contributions or interest or employment security administrative contingency assessments shall make application for an adjustment in connection with subsequent contribution or employment security administrative contingency assessments payments or for a refund because the adjustment cannot be made and the commission shall determine that the contributions or interest or employment security administrative contingency
assessments or any portion was erroneously collected, the commission shall make an adjustment, without interest, in connection with subsequent contribution or employment security administrative contingency assessments payments by him or, if the adjustment cannot be made, shall refund the amount from the fund. For like cause and within the same period an adjustment or refund may be made on the commission's own initiative.
A refund or adjustment must be made in any case where the commission finds that contributions or interest or employment security administrative contingency assessments were erroneously paid by an employing unit to this State upon wages earned by individuals in employment in another state. The refund or adjustment must be made upon satisfactory proof to the commission that the payment of the contributions or interest or employment security administrative contingency assessments has been made to the other state."
Contributions, interest, etc. considered taxes
SECTION 9. Section 41-31-380 of the 1976 Code is amended to read:
"Section 41-31-380. The contributions, interest, penalties, employment security administrative contingency assessments, and costs prescribed in this chapter are considered taxes owing the State by the persons against whom they are charged, and are a lien upon the real property or chattels of the person by whom the contributions are due, only after the warrant described in Section 41-31-390 is indexed as prescribed in Section 41-31-400."
Defaulting employer
SECTION 10. Section 41-31-390 of the 1976 Code is amended to read:
"Section 41-31-390. If any employer defaults in any payment of contributions, interest, penalties, or employment security administrative contingency assessments the commission shall
notify the employer of the amount of contributions, interest, penalties, or employment security administrative contingency assessments due. If the amount is not paid within ten days thereafter the commission shall issue a warrant of execution, directed to the sheriff or tax collector of any county of the State, commanding him to levy upon and sell the real and personal property of the employer found within his county for the payment of the amount, with interest, and the cost of executing the warrant, to return the warrant to the commission and to pay it the money collected."
Copy and execution to be filed
SECTION 11. Section 41-31-400 of the 1976 Code is amended to read:
"Section 41-31-400. Upon receipt of the execution the sheriff or tax collector shall file with the clerk of court of his county a copy and thereupon the clerk of court shall enter in his abstract of judgments the name of the employer mentioned in the warrant and in the proper columns the amount of the contributions, interest, penalties, and employment security administrative contingency assessments and costs for which the warrant is issued and the date and hour when the copy is filed and shall index the warrant upon the index of judgments. The sheriff or tax collector shall proceed upon the warrant in all respects and with like effect and in the same manner prescribed by law in respect to executions issued against property upon judgments of a court of record and is entitled to the same fees for service in executing the warrant to be collected in the same manner."
Payment by nonprofit corporation
SECTION 12. Section 41-31-670 of the 1976 Code is amended to read:
"Section 41-31-670. (1) Any nonprofit organizations that prior to January 1, 1969, paid contributions required by Section 41-31-10 and, pursuant to Section 41-31-620, elects within thirty days after January 1, 1972, to make payments in lieu of contributions, is not required to make any such payment on account of any regular or extended benefits paid, on the basis of wages paid by the organization to individuals for weeks of unemployment which begin on or after the effective date of the election until the total amount of the benefits equals the amount of the positive balance in the experience rating account of the organization.
(2) Any nonprofit organization which has elected to become liable for payments in lieu of contributions under the provisions of Sections 41-31-620 and 41-31-630 and thereafter terminates the election shall become an employer liable for the payments of contributions upon the effective date of the termination but no such employer's rate thereafter may be less than two and sixty-four hundredths percent until there have been twenty-four consecutive calendar months of coverage after so becoming liable for the payment of contributions. If the employer has been an employer liable for the payment of contributions prior to election to become liable for payments in lieu of contributions the balance in the experience rating account of the employer as of the termination date of the election to become liable for payments in lieu of contributions is transferred to the new experience rating account then established for the employer."
Payment and collection of assessments
SECTION 13. Chapter 31 of Title 41 of the 1976 Code is amended by adding:
"Article 9
Payment and Collection of Employment Security
Administrative Contingency Assessments
Section 41-31-910. Employment security administrative contingency assessments must accrue and become payable by each employer who is subject to the assessments as defined in Section 41-27-410 for each calendar year in which he is subject to Chapters 27 through 41 of this title with respect to wages for employment. The assessments are due and payable by each subject employer to the commission for the employment security administrative contingency fund and are not deductible, in whole or in part, from the wages of individuals in the employer's employ. No determination and assessments may be instituted more than four years after the last day of the month immediately following the calendar quarter for which the assessments were payable. This proviso does not apply to any employer if the commission finds that the employer wilfully failed to report when required to do so by the provisions of this section or the rules of the commission, or has knowingly made a false statement or has intentionally failed to disclose a material fact.
Section 41-31-920. Employment security administrative contingency assessments must be reported on the employer's quarterly contribution report according to the same rules as the commission may prescribe for contributions.
Section 41-31-930. If any employer's amount of employment security administrative contingency assessment which is due and payable, as prescribed by the commission, is unpaid ten days following the date on which an assessment or debit memorandum has been issued therefor, a penalty of ten dollars may be assessed."
Special fund created
SECTION 14. Article 5, Chapter 33 of Title 41 of the 1976 Code is amended by adding:
"Section 41-33-710. (a) There is created in the state treasury a special fund to be known as the employment security administrative contingency fund, which consists of all assessments collected pursuant to Section 41-27-410. All money in the employment security administrative contingency fund must be deposited, administered, and disbursed in accordance with the provisions of Section 41-33-420 applicable to the employment security administration fund.
(b) All monies which are deposited in the employment security administrative contingency fund are appropriate and made available to the commission. All monies in the fund must be expended to:
(1) assist with the reemployment of unemployed workers using the most efficient and effective means of service delivery;
(2) undertake any program or activity which furthers the goal of the Employment Security Commission as provided for in Chapter 42 of this title;
(3) supplement basic employment security services, with special job search and claimant placement assistance designed to assist unemployment insurance claimants to obtain employment;
(4) provide employment services, such as recruitment, screening, and referral of qualified workers, to agricultural areas where those services have in the past contributed to positive economic conditions for the agricultural industry;
(5) provide otherwise unobtainable information and analysis to the legislature and program managers about issues related to employment and unemployment.
Any balances in the fund do not lapse at any time, but are continuously available to the commission for expenditure consistent with Chapter 42 of this title. The commission shall issue its requisition approved by the chairman or any designated member, officer, or agent for the purpose set forth herein to the comptroller general who shall draw his warrant in the usual form provided by law on the State Treasurer, who shall pay it by check on the employment security administrative contingency fund."
Time effective
SECTION 15. This act shall take effect upon approval by the Governor.