§ 52-04-06.1 — Construction project risk protection

North Dakota § 52-04-06.1

• Jurisdiction: North Dakota
• Title 52: Social Security
• Ch. 52-04: Contributions

Text

1. Any project in this state with an estimated construction cost of at least fifty million
dollars which is planned to be completed or discontinued within a period of seven
years is subject to this section. The general or prime contractor, or the owner in those
situations in which there is no general or prime contractor, of a project that meets the
criteria specified under this section shall post the bond or irrevocable letter of credit
required in subsection 2 before commencement of construction work on the project
and shall report annually, within thirty days of the anniversary date the project
becomes subject to this section, to the bureau any change in the construction costs of
projects subject to this section.
2. If the bureau determines that the project is or will be within the criteria stated by this
section, the bureau shall require the general or prime contractor, or the owner in those
situations in which there is no general or prime contractor, for whom the project is
being constructed, on behalf of each employing unit, excluding design and engineering
firms, to post a bond executed by a surety company authorized to do business in the
state or an irrevocable letter of credit from a federal deposit insurance corporation
insured state or nationally chartered bank authorized to do business in the state which
will insure payment for all benefits claimed by employees of all employing units
working on the project. The bureau may adjust the amount of bond or irrevocable letter
of credit required under this subsection to cover any significant increases or decreases
in project construction costs reported by the general or prime contractor or owner. If
any general or prime contractor or owner fails to comply with this subsection, the
bureau may apply to any court of this state within the jurisdiction in which the
contractor or owner is found, located, or transacts business to obtain an order to
compel the general or prime contractor or owner to post the required bond or
irrevocable letter of credit required under this subsection. Any failure to obey an order
of the court may be punished by the court as a contempt of court.
3. The amount of bond or irrevocable letter of credit must be the difference between the
estimated benefits paid and estimated contributions, multiplied by fifty percent. The
estimation of contributions expected must be made as follows: multiply the current

year's positive employer minimum rate times the current year's taxable wage base
times the estimated number of employees on the project using figures from project
plans, times the number of years between the start date and the estimated completion
date of the project. The estimation of benefits paid must be made as follows: multiply
the estimated number of employees, from the project plans, times the current year's
maximum weekly benefit amount times the duration, twelve weeks for the first year
and twelve weeks for subsequent years, times the number of years between the start
date and the completion date rounded up to the next whole number.
4. Thirty months after the completion or discontinuance of the project, the bureau shall
determine the total benefits paid to employees of the employing unit or units. If the
total amount paid to the employees of the unit or units exceeds the total amount of
contributions collected from the units under the North Dakota unemployment
compensation law, the general or prime contractor, or the owner in those situations in
which there is no general or prime contractor, shall pay the total amount of benefits
paid to the employees of the units which exceeded the total amount of contributions
collected from the unit or units. If the general or prime contractor, or the owner in those
situations in which there is no general or prime contractor, does not pay the payment
requirement, job service North Dakota shall collect the payment from the surety
company that executed the surety bond or bank that issued the irrevocable letter of
credit. The general or prime contractor, or the owner in those situations in which there
is no general or prime contractor, shall remain liable for any amount of benefits paid to
the employees working on the project which exceeds the amount of contributions
collected from the employers who worked on the project which is not covered by the
amount of the bond or irrevocable letter of credit.
5. For the purposes of this section, a project includes all entities that employ or contract
for the employment of, or is employing directly or indirectly through agents,
independent contractors, or subcontractors, excluding design and engineering firms.
Each employing unit, whether contractor, subcontractor, or otherwise, involved in the
project is subject to this section, excluding design and engineering firms.
6. Each employing unit having employees working on a project subject to this section,
excluding design and engineering firms, shall maintain separate records for all
employment on the project showing each individual's name, social security number,
wages paid, and the dates the wages were paid. The employers shall submit separate
reports from other employment subject to the North Dakota unemployment
compensation law under a separate reporting account established for the project.
7. This section applies to projects for which bids are let after August 1, 2001.
8. The determination of whether a project is subject to this section must be made in the
same manner as provided for in section 52-04-17.
9. This section does not apply to any project in which the state is the owner or contractor.