PRIOR PRINTER'S NO. 2463 PRINTER'S NO. 3201
No. 1898 Session of 2001
INTRODUCED BY METCALFE, HERSHEY, STERN, DALLY, CREIGHTON, LEH, TRICH, WASHINGTON AND WILT, SEPTEMBER 18, 2001
AS REPORTED FROM COMMITTEE ON LABOR RELATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JANUARY 29, 2002
AN ACT 1 Amending the act of December 5, 1936 (2nd Sp.Sess., 1937 2 P.L.2897, No.1), entitled "An act establishing a system of 3 unemployment compensation to be administered by the 4 Department of Labor and Industry and its existing and newly 5 created agencies with personnel (with certain exceptions) 6 selected on a civil service basis; requiring employers to 7 keep records and make reports, and certain employers to pay 8 contributions based on payrolls to provide moneys for the 9 payment of compensation to certain unemployed persons; 10 providing procedure and administrative details for the 11 determination, payment and collection of such contributions 12 and the payment of such compensation; providing for 13 cooperation with the Federal Government and its agencies; 14 creating certain special funds in the custody of the State 15 Treasurer; and prescribing penalties," further providing for <-- 16 contributions and for election of reimbursement. PROVIDING <-- 17 FOR RELIEF FROM CERTAIN EMPLOYER CHARGES. 18 The General Assembly of the Commonwealth of Pennsylvania 19 hereby enacts as follows: 20 Section 1. Section 1003 of the act of December 5, 1936 (2nd <-- 21 Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment 22 Compensation Law, amended July 21, 1983 (P.L.68, No.30), is 23 amended to read: 24 Section 1003. Contributions.--(a) In lieu of contributions 25 required to be paid by employers under this act, the
1 Commonwealth of Pennsylvania shall pay into the Unemployment 2 Compensation Fund an amount equal to the amount of regular 3 benefits and of one-half of the extended benefits paid, (after 4 December 31, 1978 the full amount of extended benefits paid) 5 that is attributable to service in the employ of the 6 Commonwealth and all its departments, bureaus, boards, agencies, 7 commissions and authorities[.]: Provided, that, if an individual 8 is receiving benefits pursuant to an eligibility determination 9 based on a separation from another employer, the Commonwealth 10 shall not be liable to the Unemployment Compensation Fund for 11 any benefits paid to the individual if the individual's most 12 recent separation from the Commonwealth was due to being 13 discharged for willful misconduct connected with the service, or 14 due to the individual's leaving the service without good cause 15 attributable to employment, if the Commonwealth has filed notice 16 with the department in accordance with its rules and regulations 17 and within the time limits prescribed. 18 (b) The amount which the Commonwealth shall pay into the 19 Unemployment Compensation Fund, as hereinabove set forth, shall 20 be computed by the department and reported quarterly to the 21 State Treasurer who shall thereupon pay such amount from the 22 General Fund of the Commonwealth, upon approval thereof in 23 accordance with the law then in effect, except that to the 24 extent that compensation is paid on the basis of wages paid by 25 an authority of the Commonwealth from its funds such authority 26 shall pay such amount into the Unemployment Compensation Fund 27 from its own funds. 28 (c) Past due payments of amounts in lieu of contributions, 29 or reports with respect thereto, shall be subject to the same 30 interest and penalties that, pursuant to section 308 apply to 20010H1898B3201 - 2 -
1 past due contributions and section 206 apply to past due 2 reports. 3 Section 2. Sections 1104 and 1202.2 of the act, amended or 4 added July 6, 1977 (P.L.41, No.22), are amended to read: 5 Section 1104. Election of Reimbursement.--(a) Any nonprofit 6 organization which, on or after January 1, 1972, is or becomes 7 liable to the contribution provisions of this act may, in lieu 8 of payment of such contributions, elect to pay to the department 9 for the Unemployment Compensation Fund an amount equal to the 10 amount of regular benefits and of one-half of the extended 11 benefits paid, that is attributable to service in the employ of 12 such nonprofit organization[.]: Provided, that if an individual 13 is receiving benefits pursuant to an eligibility determination 14 based on a separation from another employer, the nonprofit 15 organization shall not be liable to the Unemployment 16 Compensation Fund for any benefits paid to the individual if the 17 individual's most recent separation from the nonprofit 18 organization was due to being discharged for willful misconduct 19 connected with the service, or due to the individual's leaving 20 the service without good cause attributable to employment, if 21 the nonprofit organization has filed notice with the department 22 in accordance with its rules and regulations and within the time 23 limits prescribed. Such employer shall continue to be liable for 24 reimbursement of benefit payments based on wages paid prior to 25 the termination date of such election. 26 (b) Such election shall be for a period of not less than two 27 taxable years unless sooner terminated by the department as 28 hereinafter provided. 29 Section 1202.2. Election of Reimbursement.--(a) Any 30 political subdivision of the Commonwealth or any instrumentality 20010H1898B3201 - 3 -
1 of one or more thereof, which on or after January 1, 1978 and 2 prior to January 1, 1979 is or becomes liable to the 3 contribution provisions of the act may, in lieu of payment of 4 such contributions, elect to pay to the department for the 5 Unemployment Compensation Fund, an amount equal to the amount of 6 regular benefits and of one-half of the extended benefits paid, 7 (after December 31, 1978 the full amount of extended benefits 8 paid) that is attributable to service in the employ of such 9 political subdivision of the Commonwealth or any instrumentality 10 of one or more thereof[.]: Provided, that, if an individual is 11 receiving benefits pursuant to an eligibility determination 12 based on a separation from another employer, the political 13 subdivision or instrumentality shall not be liable to the 14 Unemployment Compensation Fund for any benefits paid to the 15 individual if the individual's most recent separation from the 16 political subdivision or instrumentality was due to being 17 discharged for willful misconduct connected with the service, or 18 due to the individual's leaving the service without good cause 19 attributable to employment, if the political subdivision or 20 instrumentality has filed notice with the department in 21 accordance with its rules and regulations and within the time 22 limits prescribed. Such employer shall continue to be liable for 23 reimbursement of benefit payments based on wages paid prior to 24 the termination date of such election. 25 (b) Such election shall be for a period of not less than two 26 taxable years unless sooner terminated by the department as 27 hereinafter provided. 28 Section 3. This act shall take effect in 60 days. 29 SECTION 1. THE ACT OF DECEMBER 5, 1936 (2ND SP.SESS., 1937 <-- 30 P.L.2897, NO.1), KNOWN AS THE UNEMPLOYMENT COMPENSATION LAW, IS 20010H1898B3201 - 4 -
1 AMENDED BY ADDING A SECTION TO READ: 2 SECTION 212. RELIEF FROM CHARGES FOR CERTAIN EMPLOYERS.--(A) 3 AN EMPLOYER THAT MAKES PAYMENTS IN LIEU OF CONTRIBUTIONS 4 PURSUANT TO ARTICLE X, XI OR XII SHALL BE RELIEVED OF CHARGES IN 5 ACCORDANCE WITH SECTION 302(A) AND REGULATIONS OF THE 6 DEPARTMENT, FOR COMPENSATION PAID ON APPLICATIONS FOR BENEFITS 7 EFFECTIVE DURING A CALENDAR YEAR, IF THE EMPLOYER SATISFIES THE 8 FOLLOWING REQUIREMENTS: 9 (1) THE EMPLOYER PAYS A NONREFUNDABLE SOLVENCY FEE UNDER 10 SUBSECTION (B) FOR THE CALENDAR YEAR WITHIN THIRTY (30) DAYS 11 AFTER NOTICE OF THE FEE IS SENT TO THE EMPLOYER'S LAST KNOWN 12 ADDRESS. THE DEPARTMENT MAY FOR GOOD CAUSE EXTEND THE PERIOD 13 WITHIN WHICH THE FEE MUST BE PAID. 14 (2) ALL REPORTS REQUIRED BY THIS ACT AND REGULATIONS OF THE 15 DEPARTMENT FOR CALENDAR QUARTERS THROUGH THE SECOND CALENDAR 16 QUARTER OF THE PRECEDING CALENDAR YEAR ARE FILED. 17 (B) AN EMPLOYER'S SOLVENCY FEE FOR A CALENDAR YEAR SHALL BE 18 THE MONETARY AMOUNT DETERMINED BY MULTIPLYING THE SOLVENCY FEE 19 RATE FOR THE YEAR BY THE AMOUNT OF WAGES PAID, WITHOUT REGARD TO 20 THE EXCLUSION IN SECTION 4(X)(1), BY THE EMPLOYER IN THE FOUR 21 CONSECUTIVE CALENDAR QUARTERS ENDING ON JUNE 30 OF THE PRECEDING 22 CALENDAR YEAR: PROVIDED, THAT AN EMPLOYER'S SOLVENCY FEE FOR A 23 YEAR SHALL NOT BE LESS THAN TWENTY-FIVE DOLLARS ($25). 24 (1) FOR CALENDAR YEARS 2003, 2004 AND 2005, THE SOLVENCY FEE 25 RATE SHALL BE THREE TEN THOUSANDTHS (.0003). 26 (2) IN 2005 THE SECRETARY SHALL REDETERMINE THE SOLVENCY FEE 27 RATE. THE SECRETARY SHALL REDETERMINE THE RATE SO THAT THE 28 UNROUNDED RATE YIELDS SOLVENCY FEES APPROXIMATELY EQUAL TO THE 29 AMOUNT OF COMPENSATION FOR WHICH CHARGES ARE RELIEVED UNDER THIS 30 SECTION. FOR PURPOSES OF REDETERMINING THE RATE, THE SECRETARY 20010H1898B3201 - 5 -
1 SHALL USE THE AMOUNT OF COMPENSATION FOR WHICH CHARGES ARE 2 RELIEVED UNDER THIS SECTION PAID DURING 2003 AND 2004 AND THE 3 AMOUNT OF WAGES PAID, WITHOUT REGARD TO THE EXCLUSION IN SECTION 4 4(X)(1), DURING THE SAME TIME PERIOD BY EMPLOYERS WHO PAID A 5 SOLVENCY FEE UNDER THIS SECTION. THE RATE AS REDETERMINED SHALL 6 TAKE EFFECT FOR THE NEXT CALENDAR YEAR AND SHALL REMAIN IN 7 EFFECT FOR THREE YEARS. 8 (3) BEGINNING IN 2008 AND EACH FIFTH YEAR THEREAFTER, THE 9 SECRETARY SHALL REDETERMINE THE SOLVENCY FEE RATE. THE SECRETARY 10 SHALL REDETERMINE THE RATE SO THAT THE UNROUNDED RATE YIELDS 11 SOLVENCY FEES APPROXIMATELY EQUAL TO THE AMOUNT OF COMPENSATION 12 FOR WHICH CHARGES ARE RELIEVED UNDER THIS SECTION. FOR PURPOSES 13 OF REDETERMINING THE RATE, THE SECRETARY SHALL USE THE AMOUNT OF 14 COMPENSATION FOR WHICH CHARGES ARE RELIEVED UNDER THIS SECTION 15 PAID DURING THE FIVE CALENDAR YEARS IMMEDIATELY PRECEDING THE 16 YEAR IN WHICH THE REDETERMINATION OCCURS AND THE AMOUNT OF WAGES 17 PAID, WITHOUT REGARD TO THE EXCLUSION IN SECTION 4(X)(1), DURING 18 THE SAME TIME PERIOD BY EMPLOYERS WHO PAID A SOLVENCY FEE UNDER 19 THIS SECTION. THE RATE AS REDETERMINED SHALL TAKE EFFECT FOR THE 20 NEXT CALENDAR YEAR AND SHALL REMAIN IN EFFECT FOR FIVE YEARS. 21 (4) IF THE SOLVENCY FEE RATE REDETERMINED UNDER PARAGRAPHS 22 (2) AND (3) IS NOT A MULTIPLE OF ONE-HUNDREDTH OF ONE PER CENT 23 IT SHALL BE ROUNDED TO THE NEXT HIGHER MULTIPLE OF ONE-HUNDREDTH 24 OF ONE PER CENT. 25 (C) SOLVENCY FEES PAID BY EMPLOYERS UNDER THIS SECTION SHALL 26 BE DEPOSITED IN THE UNEMPLOYMENT COMPENSATION FUND. COMPENSATION 27 FOR WHICH CHARGES ARE RELIEVED UNDER THIS SECTION SHALL NOT BE 28 USED IN THE CALCULATION OF THE STATE ADJUSTMENT FACTOR UNDER 29 SECTION 301.1(E). 30 (D) THE PROVISIONS OF THIS SECTION SHALL CONSTITUTE THE 20010H1898B3201 - 6 -
1 EXCLUSIVE MEANS BY WHICH AN EMPLOYER WHO MAKES PAYMENTS IN LIEU 2 OF CONTRIBUTIONS PURSUANT TO ARTICLE X, XI OR XII MAY BE EXCUSED 3 FROM REIMBURSING THE UNEMPLOYMENT COMPENSATION FUND FOR 4 COMPENSATION PAID TO AN INDIVIDUAL THAT IS BASED ON WAGES PAID 5 BY THE EMPLOYER OR THAT PORTION OF THE INDIVIDUAL'S COMPENSATION 6 DETERMINED IN ACCORDANCE WITH SECTION 1108. 7 (E) A GROUP ACCOUNT UNDER SECTION 1109 SHALL CONSTITUTE AN 8 EMPLOYER FOR PURPOSES OF THIS SECTION. 9 SECTION 2. THE ADDITION OF SECTION 212 OF THE ACT SHALL BE 10 APPLICABLE TO CALENDAR YEARS BEGINNING AFTER DECEMBER 31, 2002, 11 AND TO COMPENSATION PAID ON APPLICATIONS FOR BENEFITS EFFECTIVE 12 AFTER DECEMBER 31, 2002. 13 SECTION 3. THIS ACT SHALL TAKE EFFECT IMMEDIATELY. F1L43MRD/20010H1898B3201 - 7 -