- Definitions - Civil and criminal penalties.
Notwithstanding any other provision of law, the following applies regarding assignment of
penalty tax rates and transfers and acquisitions of businesses:
1.
a.If an employer transfers all or a part 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 transferred trade or business is transferred to the employer to
which the business is transferred. The rates of both employers must be
recalculated and made effective on the first day of the quarter in which the
transfer took effect. The transfer of any of the employer's workforce to another
employer is considered a transfer of trade or busin
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- Definitions - Civil and criminal penalties.
Notwithstanding any other provision of law, the following applies regarding assignment of
penalty tax rates and transfers and acquisitions of businesses:
1. a. If an employer transfers all or a part 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 transferred trade or business is transferred to the employer to
which the business is transferred. The rates of both employers must be
recalculated and made effective on the first day of the quarter in which the
transfer took effect. The transfer of any of the employer's workforce to another
employer is considered a transfer of trade or business under this subsection if, as
a result of the transfer, the transferring employer no longer performs the trade or
business in which the transferred workforce was engaged, and the trade or
business is performed by the employer to which the workforce was transferred.
b. If, following a transfer of experience under subdivision a, the agency determines
that a substantial purpose of the transfer of trade or business was to obtain a
reduced unemployment insurance tax rate, the experience ratings of the
employers involved must be combined into a single account and a single
unemployment insurance tax rate must be assigned to that account.
2. If a person, who at the time of acquisition is not an employer under this title, acquires
the trade or business of an employer, the unemployment experience of the acquired
business may not be transferred to that person if the agency finds that the person
acquired the business solely or primarily for the purpose of obtaining a lower
unemployment insurance tax rate. Instead, the person must be assigned the
applicable new employer rate calculated under section 52-04-05. In determining
whether the business was acquired solely or primarily for the purpose of obtaining a
lower unemployment insurance tax rate, the agency shall use objective factors that
may include the cost of acquiring the business, whether the person continued the
business enterprise of the acquired business, how long the business enterprise was
continued, and whether a substantial number of new employees were hired for
performance of duties unrelated to the business activity conducted before acquisition.
3. If a person knowingly acts or attempts to transfer or acquire a trade or business solely
or primarily for the purpose of obtaining a lower unemployment insurance tax rate or
knowingly violates any other provision of this chapter related to determining the
assignment of an unemployment insurance tax rate, or if a person knowingly advises
another person in a way that results in a violation of those provisions, the person is
subject to the civil penalties provided in this subsection.
a. If the person is an employer, the employer must be assigned, in lieu of that
employer's experience rate, the highest rate assignable under this chapter for the
rate year during which the violation or attempted violation occurred and the three
rate years immediately following that rate year. However, if the employer's
experience rate is already at the highest rate for any year of that four-year period
or if the amount of increase in the person's experience rate imposed under this
subdivision would be less than two percent for any year of the four-year period,
the penalty unemployment insurance tax rate for the year must be determined by
adding a rate increment of two percent of taxable wages to the calculated
experience rate.
b. If the person is not an employer, the person is subject to a civil penalty of not
more than twenty-five thousand dollars. Any civil penalty collected must be
deposited in the penalty and interest account established under section 52-04-22.
4. In addition to the civil penalty imposed under subsection 3, any person that knowingly
violates this section or knowingly attempts to violate this section is guilty of a class C
felony.