(1) (a)
An employing unit, as defined in section 8-70-113 (1)(f), that becomes an employer
because it acquires all of the organization, trade, or business or substantially all of
the assets of one or more employers subject to articles 70 to 82 of this title shall
succeed to the entire experience rating record of the predecessor employer, and
the entire separate account, including the actual premiums, benefits, and payroll
experience of the predecessor employer, shall pass to the successor for the
purpose of determining the premium rate for the successor.
(b) If the successor was not an employer prior to the date of acquisition, the
successor's rate shall be the rate applicable to the predecessor employer in the
period immediately preceding the date of acquisition if there was only one
predecessor or if there were multiple predecessors with identical rates. If there
were multiple predecessor employers with rates that were not identical, the
successor's rate shall be the highest rate applicable to any of the predecessor
employers in the period immediately preceding the date of acquisition.
(c) (I) Repealed.
(II) (A) If, at the time of transfer, a person who is not an employer under this
section acquires the trade or business of an employer and the division finds that the
successor acquired the trade or business solely or primarily for the purpose of
obtaining a lower rate of contributions, the unemployment experience of the
predecessor employer shall not be transferred to the successor and the division
shall assign the successor the applicable new employer rate determined pursuant
to section 8-76-102.5 (4).
(B) This subparagraph (II) is effective December 31, 2012.
(2) (a) Notwithstanding any other provision of sections 8-76-101 to 8-76-104,
if the successor employer was an employer subject to articles 70 to 82 of this title
prior to the date of acquisition and, at the time of the transfer, there is no
substantial common ownership, management, or control of the two employers, the
successor's premium rate for the remainder of the calendar year shall be the same
as the successor's rate in the period immediately preceding the date of acquisition.
(b) If an employer transfers all or a portion of its trade or business to another
employer and, at the time of the transfer, there is substantially common ownership,
management, or control of the two employers, the unemployment experience
attributable to the predecessor employer shall be transferred to the successor
employer. The rates of both employers shall be recalculated and made effective
immediately upon the date of the transfer of the trade or business. If, following a
transfer experience, the division determines that the purpose of the transfer of the
trade or business was solely or primarily to obtain a reduced liability for
contributions, the division shall combine the experience rating accounts of the
employers into a single account and shall assign a single rate to the account.
(c) If an employer transfers all or a portion of its trade or business to another
employer and the division finds that the successor acquired the trade or business
solely or primarily for the purpose of obtaining a lower rate of contributions, the
experience and reserve account attributable to the predecessor employer shall not
be transferred to the successor employer and shall revert to the predecessor
employer.
(3) (a) Whenever an employer in any manner transfers a clearly segregable
unit of the employer's business for which the predecessor employer has
maintained, in such form as to be separable, continuous records of wages,
premiums, and benefits paid on account of the segregable unit, the predecessor
employer and successor employer may jointly request that the division transfer a
proportionate share of premium, benefit, and payroll experience attributable to the
unit based on the ratio of the chargeable payrolls paid during the twelve calendar
quarters immediately preceding the computation date of the segregable unit to the
total employer account prior to the notice to the division of the transfer. A transfer
of experience may not be made under this subsection (3) unless the segregable unit
has fourteen consecutive quarters of payroll immediately preceding the
computation date. If, at the time of the transfer, there is substantially common
ownership, management, or control of the two employers, the unemployment
experience attributable to the predecessor employer shall be transferred to the
successor employer. The rates of both employers shall be recalculated and made
effective immediately upon the date of the transfer of the trade or business.
(b) The division may transfer the experience and perform all other acts
required by this subsection (3). The proportionate share of the predecessor
employer's reserve account attributable to the transferred unit shall pass to the
successor employer.
(c) The experience rate established for the predecessor employer for all
units of the business shall continue in effect for the remainder of the calendar year
in which the transfer is made, and, for succeeding calendar years, it shall be
computed on the experience of those units retained.
(d) If the successor was an employer prior to the effective date of the
transfer, the experience rate for the calendar year in which the transfer is made
shall be the same as that previously established without reference to the acquired
segregable unit, and, for succeeding calendar years, it shall be computed on the
combined experience of all units of the successor's business.
(e) If the successor was not an employer prior to the effective date of
transfer and two or more segregable units are simultaneously transferred to the
successor by a single employer, the successor's premium rate shall be computed
from the combined premium, benefit, and payroll experience of the units.
(f) If the successor was not an employer prior to the effective date of
transfer and two or more segregable units are simultaneously transferred to the
successor by different employers, the successor's premium rate shall be the
highest rate applicable to any of the units unless the rates with respect to the
transferred units are identical.
(g) The transfer of experience with respect to a segregable unit shall be of
no force and effect unless an application for the transfer, signed by both the
predecessor employer and the successor employer, is filed with the division in the
form and manner prescribed by the director by rule. The application shall be filed
within sixty days after the notice of employer liability from the division is mailed or
transmitted by electronic means to the successor employer. The notice shall
contain information pertaining to segregable unit transfers.
(h) Whenever a predecessor employer and a successor employer jointly
request that the division transfer the proportionate share of premium, benefit, and
payroll experience attributable to a clearly segregable unit to the successor
employer, the predecessor employer shall furnish to the division any information
requested by the division for such purpose.
(4) (a) In determining whether the trade or business was acquired solely or
primarily for the purpose of obtaining a lower rate of contributions, the division
shall use objective factors that may include, without limitation, the cost of acquiring
the trade or business, whether and for how long the successor continued the
business enterprise of the acquired trade or business, and whether a substantial
number of new employees were hired for performance of duties unrelated to the
business activity conducted prior to the acquisition.
(b) The division may void a rate determination if it finds that a successor has
no business existence separate and apart from the predecessor and should not
have been established as a separate employer for unemployment compensation
purposes. Under the circumstances described in this paragraph (b), the experience
and reserve account attributable to the predecessor employer shall not be
transferred to the successor employer and shall revert to the predecessor
employer.
(5) When determining whether one or more employers have common
ownership, management, or control, the division may consider factors such as stock
ownership, officers, employees, payroll systems, and common business interests.
(6) The division shall establish procedures to identify the transfer or
acquisition of a business or trade for purposes of this section.
(7) Notwithstanding any provision of section 8-70-113 to the contrary, any
subject employer whose entire reserve account has been transferred to a successor
employer, as provided in subsection (1) of this section, shall immediately cease to be
a subject employer and shall thereafter become a subject employer only upon any
future employment experience.
(8) A transfer of experience shall not occur when a work-site employer's
account is made inactive as a result of entering into a contract with an employee
leasing company, as defined in section 8-70-114 (2)(a)(V), or when a contract
between a work-site employer and an employee leasing company is terminated
unless there is substantial common ownership, management, and control of the
work-site employer and the employee leasing company. The existence of an
employee leasing arrangement, without other evidence of common control, shall
not constitute substantial common ownership, management, and control.
(9) When any part of the predecessor employer's trade or business utilizes
the services of ninety percent or more of the total number of employees in covered
employment on the payroll for each of the four pay periods immediately preceding
the transfer to a successor employer, the entire separate account, including the
actual premium, benefit, and payroll experience of the predecessor employer, shall
pass to the successor employer for the purpose of the rate of computation of the
successor.
(10) (a) If a person knowingly violates or attempts to violate any provision of
this section in order to obtain a lower contribution rate, the person shall pay all
owed premiums with applicable penalties and interest and may be subject to the
penalties set forth in paragraph (c) of this subsection (10).
(b) If a person knowingly advises another person in a way that results in a
violation of paragraph (a) of this subsection (10), the person may be subject to the
penalties set forth in paragraph (c) of this subsection (10).
(c) If the person who violates this section as described in paragraph (a) or (b)
of this subsection (10) is an employer, the division may assign the employer the
highest contribution rate assignable under this article for the rate year during
which the violation or attempted violation occurred and the next three years. If,
during the rate year in which a violation occurs, the subject employer was assigned
the highest contribution rate, or the amount of the rate increase would be less than
two and seven-tenths percent for the rate year, the division may impose a penalty
contribution rate of two and seven-tenths percent of chargeable wages for that
rate year and the next three years. If the person is not an employer, the person may
be subject to a civil fine of not more than five thousand dollars, which shall be
deposited in the unemployment revenue fund created in section 8-77-106.
(d) In addition to any penalty imposed pursuant to subsections (10)(a), (10)(b),
and (10)(c) of this section, any violation of this section may be prosecuted as a class
2 misdemeanor pursuant to section 18-1.3-501.
(11) As used in this section, unless the context otherwise requires:
(a) Knowingly or willfully means being aware that one's conduct is
practically certain to cause the result or having reckless disregard for the
prohibition involved.
(b) Person means any individual, trust, estate, partnership, association,
company, corporation, joint venture, limited liability company, or other legal or
commercial entity.
(c) Trade or business includes an employer's work force.
(d) Violates or attempts to violate includes, but is not limited to, intent to
evade, misrepresentation, or willful nondisclosure.